Are we on the cusp of the biggest bull market in rare US coins ever?

[mumu]

No, you're not; you have a reputation with me of being one of the thinkers not the blurters and slingers.

 

(By the way, those peace dollars are awesome; I especially like that red one on the end. Incredible. You're favorite?)

 

The red 1924 is my favorite. It was the first coin I ever lost sleep over. Kinda like the first girl you sleep over. The 21 on the left is a close 2nd. Thanks.

 

I need to update that collage with Todd's better pics.

[therealanaconda-migration]

The coin market tanked in the early 90's, and remained in the doldrums for much of them.

 

Lots of wealth was created in the late 90's. It didn't translate into higher coin prices.

 

Fast forward to the 2000s, we start off with a recession, but by mid-2002, we're recovered and chugging along. The coin market exploded in the early to mid 2000's in a way that quite literally hadn't been seen since the 60's.

 

Why? The economy?

 

Probably not. Many researchers claim it as very simply a result of the 50 state quarter program, and I'm inclined to agree.

 

..... and Bullion in coin form is the catalyst for today's market vitality.....that and the internet bringing everything to our fingertips.Let's face it.... a nicely designed coin is very compelling. They are objects of desire. I've said it in the Comic Forum and will say it here..... Investment as a motivator is most often a form of denial used to justify the pursuit of a luxury item..... nothing more. That being said, I can still recoup a lot more of my outlay from a coin than I can a night of drinking GOD BLESS...

 

-jimbo(a friend of jesus) (thumbs u

 

I hear ya'. I started buying a lot of coins years ago because stocks and cash didn't turn me on and I knew that if I didn't spend my money on rare books and coins and art, I'd blow it on cars and other depreciating stuff.

[Kurtdog]

Factor in their marketing. Factor in their dealer connections who are making money hand over foot for that marketing. Factor in they know our psychology better than we do. Then tell us how you make out.

[lloyd cowle]

The Snake may very well be right:)

[RockMyAmadeus]

The coin market tanked in the early 90's, and remained in the doldrums for much of them.

 

Lots of wealth was created in the late 90's. It didn't translate into higher coin prices.

 

Fast forward to the 2000s, we start off with a recession, but by mid-2002, we're recovered and chugging along. The coin market exploded in the early to mid 2000's in a way that quite literally hadn't been seen since the 60's.

 

Why? The economy?

 

Probably not. Many researchers claim it as very simply a result of the 50 state quarter program, and I'm inclined to agree.

 

..... and Bullion in coin form is the catalyst for today's market vitality.....that and the internet bringing everything to our fingertips.Let's face it.... a nicely designed coin is very compelling. They are objects of desire. I've said it in the Comic Forum and will say it here..... Investment as a motivator is most often a form of denial used to justify the pursuit of a luxury item..... nothing more. That being said, I can still recoup a lot more of my outlay from a coin than I can a night of drinking GOD BLESS...

 

-jimbo(a friend of jesus) (thumbs u

 

There is much to be said for choosing a hobby that can theoretically maintain value, rather than blowing one's money on music, movies, etc, that have very little ROI.

 

That said, there is also much to be said for spending one's money in a way that brings one the most joy, so expendable income spent doing what one loves is not money wasted.

[e1cnr]

There was a fairly large spike near 1989-1990

 

If the prices go up now, how can you tell if coins are going up or hyperinflation is making US dollars worth less?

 

[therealanaconda-migration]

To tell if rare coins are rising or have risen in a hyperinflation scenario, you basically make a comparison of the cost to buy items:

 

If now a gallon of gas costs $4 and it costs $100 to buy a MS 65 Morgan (1 to 25)

 

and then in three years

 

a gallon of gas costs $1,000 and it costs $100,000 to a MS 65 Morgan (1 to 100)

 

then coins have risen faster than gasoline.

 

 

[James_OldeTowne]

To tell if rare coins are rising or have risen in a hyperinflation scenario, you basically make a comparison of the cost to buy items:

 

If now a gallon of gas costs $4 and it costs $100 to buy a MS 65 Morgan (1 to 25)

 

and then in three years

 

a gallon of gas costs $1,000 and it costs $100,000 to a MS 65 Morgan (1 to 100)

 

then coins have risen faster than gasoline.

I wouldn't use gas (and I assume you mean gasoline) as a comparison, though. People are going to put gas in their cars no matter what. But the same cannot be said for putting Morgan dollars into their collections.

 

If there is some kind of economic collapse, rare coins will be a horrible store for "wealth". In the throes of such a collapse, a thousand gallon tank filled with gasoline would be a more valuable and salable asset for $10,000 than a shiny key-date Morgan.

[therealanaconda-migration]

To tell if rare coins are rising or have risen in a hyperinflation scenario, you basically make a comparison of the cost to buy items:

 

If now a gallon of gas costs $4 and it costs $100 to buy a MS 65 Morgan (1 to 25)

 

and then in three years

 

a gallon of gas costs $1,000 and it costs $100,000 to a MS 65 Morgan (1 to 100)

 

then coins have risen faster than gasoline.

I wouldn't use gas (and I assume you mean gasoline) as a comparison, though. People are going to put gas in their cars no matter what. But the same cannot be said for putting Morgan dollars into their collections.

 

If there is some kind of economic collapse, rare coins will be a horrible store for "wealth". In the throes of such a collapse, a thousand gallon tank filled with gasoline would be a more valuable and salable asset for $10,000 than a shiny key-date Morgan.

 

I see your point on comparing gas to Morgans but hopefully you also see the point I was making was just a method for determining whether your coins have outpaced hyperinflation.

 

You are also correct in saying that during the middle of an economic collapse gas would be better than MS65 Morgans (unless you have no where to store it or if the gas can't economically be prevented from going stale)

 

(The point of my original post isn't what should someone buy which will be valuable for them DURING a crisis but rather what are wealthy people likely to buy now as protection against a collapse which they can sell later on.)

[MarkFeld]

"Are we on the cusp of the biggest bull market in rare US coins ever?"

 

The answer to that question wont be known until the end of time.

 

On a more serious note, however, while very rare and/or high quality coins often garner big dollars and considerable publicity, the very large percentage of coins which comprise the "market", aren't doing much of anything. Nor have they, for years.

 

[therealanaconda-migration]

That's what it looks like.

 

Too bad Salomon Brothers hasn't kept up with their analysis of investment performances which included rare coins. (They probably don't even exist anymore.)

 

That's actually what brought me into rare coins back in 1984 or so.

[therealanaconda-migration]

[therealanaconda-migration]

Salomon Brothers and the rare coin market.

[TonerGuy]

"Are we on the cusp of the biggest bull market in rare US coins ever?"

 

The answer to that question wont be known until the end of time.

 

On a more serious note, however, while very rare and/or high quality coins often garner big dollars and considerable publicity, the very large percentage of coins which comprise the "market", aren't doing much of anything. Nor have they, for years.

 

Thank you for your honesty...

 

IMHO - Unless there's going to be a mass immigration of rich 50-70 year old white guys into the US in the next few months I dont see a bull market anytime soon...

 

Actually quite the opposite I see it only declining unless we as collectors and dealers can bring in new blood to buy the millions of coins already in TPG plastic.

 

[$ilverHawk]

The coin market tanked in the early 90's, and remained in the doldrums for much of them.

 

Lots of wealth was created in the late 90's. It didn't translate into higher coin prices.

 

Fast forward to the 2000s, we start off with a recession, but by mid-2002, we're recovered and chugging along. The coin market exploded in the early to mid 2000's in a way that quite literally hadn't been seen since the 60's.

 

Why? The economy?

 

Probably not. Many researchers claim it as very simply a result of the 50 state quarter program, and I'm inclined to agree.

 

..... and Bullion in coin form is the catalyst for today's market vitality.....that and the internet bringing everything to our fingertips.Let's face it.... a nicely designed coin is very compelling. They are objects of desire. I've said it in the Comic Forum and will say it here..... Investment as a motivator is most often a form of denial used to justify the pursuit of a luxury item..... nothing more. That being said, I can still recoup a lot more of my outlay from a coin than I can a night of drinking GOD BLESS...

 

-jimbo(a friend of jesus) (thumbs u

 

I hear ya'. I started buying a lot of coins years ago because stocks and cash didn't turn me on and I knew that if I didn't spend my money on rare books and coins and art, I'd blow it on cars and other depreciating stuff.

 

In an earlier post (page 1) you stated "I have no vested interest in this argument. I essentially own no rare coins and am not currently in the rare coin biz." Yet in the above post you state that you "started buying a lot of coins years ago".

 

It is clear your intent is to stimulate conversation on your hypothesis regarding the value of collectible and rare coins in a declining economy.

 

So why the contradictory statements regarding your ownership of rare coins?

 

Carl

 

 

 

 

 

 

[MarkFeld]

The coin market tanked in the early 90's, and remained in the doldrums for much of them.

 

Lots of wealth was created in the late 90's. It didn't translate into higher coin prices.

 

Fast forward to the 2000s, we start off with a recession, but by mid-2002, we're recovered and chugging along. The coin market exploded in the early to mid 2000's in a way that quite literally hadn't been seen since the 60's.

 

Why? The economy?

 

Probably not. Many researchers claim it as very simply a result of the 50 state quarter program, and I'm inclined to agree.

 

..... and Bullion in coin form is the catalyst for today's market vitality.....that and the internet bringing everything to our fingertips.Let's face it.... a nicely designed coin is very compelling. They are objects of desire. I've said it in the Comic Forum and will say it here..... Investment as a motivator is most often a form of denial used to justify the pursuit of a luxury item..... nothing more. That being said, I can still recoup a lot more of my outlay from a coin than I can a night of drinking GOD BLESS...

 

-jimbo(a friend of jesus) (thumbs u

 

I hear ya'. I started buying a lot of coins years ago because stocks and cash didn't turn me on and I knew that if I didn't spend my money on rare books and coins and art, I'd blow it on cars and other depreciating stuff.

 

In an earlier post (page 1) you stated "I have no vested interest in this argument. I essentially own no rare coins and am not currently in the rare coin biz." Yet in the above post you state that you "started buying a lot of coins years ago".

 

It is clear your intent is to stimulate conversation on your hypothesis regarding the value of collectible and rare coins in a declining economy.

 

So why the contradictory statements regarding your ownership of rare coins?

 

Carl

 

 

 

 

 

 

Perhaps he sold the coins that he "started buying a lot of coins years ago".

[therealanaconda-migration]

The coin market tanked in the early 90's, and remained in the doldrums for much of them.

 

Lots of wealth was created in the late 90's. It didn't translate into higher coin prices.

 

Fast forward to the 2000s, we start off with a recession, but by mid-2002, we're recovered and chugging along. The coin market exploded in the early to mid 2000's in a way that quite literally hadn't been seen since the 60's.

 

Why? The economy?

 

Probably not. Many researchers claim it as very simply a result of the 50 state quarter program, and I'm inclined to agree.

 

..... and Bullion in coin form is the catalyst for today's market vitality.....that and the internet bringing everything to our fingertips.Let's face it.... a nicely designed coin is very compelling. They are objects of desire. I've said it in the Comic Forum and will say it here..... Investment as a motivator is most often a form of denial used to justify the pursuit of a luxury item..... nothing more. That being said, I can still recoup a lot more of my outlay from a coin than I can a night of drinking GOD BLESS...

 

-jimbo(a friend of jesus) (thumbs u

 

I hear ya'. I started buying a lot of coins years ago because stocks and cash didn't turn me on and I knew that if I didn't spend my money on rare books and coins and art, I'd blow it on cars and other depreciating stuff.

 

In an earlier post (page 1) you stated "I have no vested interest in this argument. I essentially own no rare coins and am not currently in the rare coin biz." Yet in the above post you state that you "started buying a lot of coins years ago".

 

It is clear your intent is to stimulate conversation on your hypothesis regarding the value of collectible and rare coins in a declining economy.

 

So why the contradictory statements regarding your ownership of rare coins?

 

Carl

 

You made a reasonable but incorrect assumption which is that I still have my inventory; I sold it in 2008 through Heritage; Anaconda Rare Coins;

 

Announcement of the Sale of my Inventory

[therealanaconda-migration]

By the way, I'm dumb but not dumb enough to think that I could have any effect whatsoever in moving the rare coin market.

[therealanaconda-migration]

"Are we on the cusp of the biggest bull market in rare US coins ever?"

 

The answer to that question wont be known until the end of time.

 

On a more serious note, however, while very rare and/or high quality coins often garner big dollars and considerable publicity, the very large percentage of coins which comprise the "market", aren't doing much of anything. Nor have they, for years.

 

Thank you for your honesty...

 

IMHO - Unless there's going to be a mass immigration of rich 50-70 year old white guys into the US in the next few months I dont see a bull market anytime soon...

 

Actually quite the opposite I see it only declining unless we as collectors and dealers can bring in new blood to buy the millions of coins already in TPG plastic.

 

If we have high inflation, rare coins will go up, no doubt about that. Take a look at one of the charts that covers the PCGS3000 from 1970 to date. You can see that during what I recall as the Carter years, we had high inflation and rare coin prices did rise quite dramatically, so it may not take a mass immigration of rich 50-70 year olds, just high inflation (although a bunch of rich old dudes would help; or just one rich middle eastern dude with a new interest in rare US coins.)

[$ilverHawk]

The coin market tanked in the early 90's, and remained in the doldrums for much of them.

 

Lots of wealth was created in the late 90's. It didn't translate into higher coin prices.

 

Fast forward to the 2000s, we start off with a recession, but by mid-2002, we're recovered and chugging along. The coin market exploded in the early to mid 2000's in a way that quite literally hadn't been seen since the 60's.

 

Why? The economy?

 

Probably not. Many researchers claim it as very simply a result of the 50 state quarter program, and I'm inclined to agree.

 

..... and Bullion in coin form is the catalyst for today's market vitality.....that and the internet bringing everything to our fingertips.Let's face it.... a nicely designed coin is very compelling. They are objects of desire. I've said it in the Comic Forum and will say it here..... Investment as a motivator is most often a form of denial used to justify the pursuit of a luxury item..... nothing more. That being said, I can still recoup a lot more of my outlay from a coin than I can a night of drinking GOD BLESS...

 

-jimbo(a friend of jesus) (thumbs u

 

I hear ya'. I started buying a lot of coins years ago because stocks and cash didn't turn me on and I knew that if I didn't spend my money on rare books and coins and art, I'd blow it on cars and other depreciating stuff.

 

In an earlier post (page 1) you stated "I have no vested interest in this argument. I essentially own no rare coins and am not currently in the rare coin biz." Yet in the above post you state that you "started buying a lot of coins years ago".

 

It is clear your intent is to stimulate conversation on your hypothesis regarding the value of collectible and rare coins in a declining economy.

 

So why the contradictory statements regarding your ownership of rare coins?

 

Carl

 

You made a reasonable but incorrect assumption which is that I still have my inventory; I sold it in 2008 through Heritage; Anaconda Rare Coins;

 

Announcement of the Sale of my Inventory

 

OK, let me try and understand the rationale for your post. In the OP you state that in your opinion, in the face of a declining economy, buying and holding rare coins is a way of avoiding the economic pain associated with a wide spread economic collapse.

 

You then state that you were a strong buyer of rare coins in the past. Then you state that you sold your holdings in 2008. It appears that you do not honor the viewpoint stated in your OP.

 

Am I misunderstanding anything?

 

Carl

[World Colonial]

If society goes to heck, so do coin prices. The best thing for coins long term is an overall feeling of wealth in the world.

 

You are correct. The idea that coins will continue to go up in value (much less real value) under prolonged adverse economic circumstances is based upon the fanciful notion that people will be both willing and able to pay more even as they are becoming poorer or much poorer. I do not see any logical basis for that claim whatsoever.

 

On another forum where I post, collectors who live in South Africa have posed a similar scenario. I have told them to forget it. That if all "hell breaks loose", in this instance that their best option is to send their money out of the country before it ever happens. Not only is their the virtual certainty that SA coins would lose a substantial proportion of their value under these circumstances, but there isn't any assurance that they will be able to take them out of the country either.

 

In the United States, the other premise which underlies this argument which I reject but others reading this thread probably do not is that US coins are "cheap" in the aggregate now or at least reasonably priced. Disproportionately, they are expensive and many are exorbitantly so. For those who are long term collectors, they will know that the prices of many coins have far outrun the increase in both incomes and net worth over the last 35 to 40 years.

 

These South African collectors also have the same notion. I will tell everyone here what I tell them. If prices explode from current levels, the typical US collector and even many affluent ones are going to priced out of practically everything worth buying.

 

Even in theory, in both countries, the only way that this could happen is if the better coins end up trading as commodities among a small or smaller group of speculators and wealthy collectors while the balance of the collecting population has the privilege of buying whatever is left over. It has never happened, I do not see it happening ever and I do not see that it is sustainable either..

[World Colonial]

Rare coin prices rose during the great depression. That seems to support my contention.

 

During the great depression, after 1933, you couldn't own gold bullion. You could invest in tangibles or keep your money in the bank. Demand for rare coins certainly didn't rise from overall increased wealth.

 

What evidence do you have to support this claim? The worst of the depression was over around mid-1933. I do not have historical data and I'm not sure it is available except anecdotal. I expect that from 1929-1933 that prices except maybe for low premium gold coins fell and many substantially.

 

There is also a big difference between 1933 and today. Coins were undeniably much cheaper in real terms (especially at the bottom of the financial collapse) which would have made them more affordable. This isn't remotely true anymore. A disproportionate number of coins are much more expensive since they came to be viewed as "investments" in the 1970's and then with TPG.

[$ilverHawk]

Salomon Brothers and the rare coin market.

 

Referencing a well known 12 year old report of Saloman Brothers coin market/investing maleficence has nothing to do with your original post.

 

Your OP stated that in a rapidly declining economy, rare coins were a good investment. What evidence do you have to support your OP?

 

Carl

[coinman_23885]

What evidence do you have to support this claim? The worst of the depression was over around mid-1933.

 

This is not completely true. In 1937 the U.S. pretty much went through a "depression within a depression" and the economy slumped even more. It had not all cleared up by mid-1933 and the New Deal measures were not completely successful in ameliorating the effects of the Great Depression notwithstanding the optimistic phrasing sometimes used in middle and high school textbooks. Things were beginning to improve by the late thirties, but it was the Second World War that was ultimately responsible for the economic recovery.

 

With this said, I do not dispute your central conclusion that the coin market will suffer during tumultuous economic periods once things reach certain critical periods. As people become poorer and poorer, they are more concerned about surviving and making ends meet rather than spending money on luxury items.

[RockMyAmadeus]

There was a fairly large spike near 1989-1990

 

If the prices go up now, how can you tell if coins are going up or hyperinflation is making US dollars worth less?

 

 

The 1989 spike was due almost completely to Morgans in MS65 (and better.)

 

There was a monstrous surge in prices paid for these coins. Grading was brand new, people could actually be guaranteed of getting MS65 (rather than a lot of sliders) coins, and they were being pitched for things like investment portfolios. Because so few had been graded, the demand for the ones that had was insane.

 

The prices soared. Common date MS65 Morgans sold for as much as $3,000.

 

It was a crazy, crazy time.

 

It all came crashing down by early 1990. Those same common dates selling for $3,000 in the spring of 1989 could be had for $150 by the summer of 1990.

 

It was hideous, and created a monstrous drag on the entire hobby for the entire rest of the decade, not to recover, as mentioned, until the early 2000's.

[RockMyAmadeus]

What evidence do you have to support this claim? The worst of the depression was over around mid-1933.

 

This is not completely true. In 1937 the U.S. pretty much went through a "depression within a depression" and the economy slumped even more. It had not all cleared up by mid-1933 and the New Deal measures were not completely successful in ameliorating the effects of the Great Depression notwithstanding the optimistic phrasing sometimes used in middle and high school textbooks. Things were beginning to improve by the late thirties, but it was the Second World War that was ultimately responsible for the economic recovery.

 

With this said, I do not dispute your central conclusion that the coin market will suffer during tumultuous economic periods once things reach certain critical periods. As people become poorer and poorer, they are more concerned about surviving and making ends meet rather than spending money on luxury items.

 

The New Deal measures were not only not successful, they made the Depression worse, dragging it out longer and deeper than it normally would have been.

 

Morgenthau's speech to the W&M Committee is very revealing...

 

[James_OldeTowne]

If we have high inflation, rare coins will go up, no doubt about that. Take a look at one of the charts that covers the PCGS3000 from 1970 to date. You can see that during what I recall as the Carter years, we had high inflation and rare coin prices did rise quite dramatically, so it may not take a mass immigration of rich 50-70 year olds, just high inflation (although a bunch of rich old dudes would help; or just one rich middle eastern dude with a new interest in rare US coins.)

If you believe that the "PCGS3000" is useful, then comparing it against a graph of historic inflation should readily disprove your theory above. Just as an example, Reagan's first couple years to my recollection experienced very high inflation -- and the coin market experienced a large, extended collapse, just the opposite of your assertion.

 

The reason coins ran up at the end of Carter's term had little to do with inflation, and much to do with the run-up in the silver commodities market.

 

I simply do not believe that specific economic principles and benchmarks are very useful predictors of coin market performance. The only general rule I would take a stab at is:

 

... more expendable personal wealth = growing coin market

 

But again, this is true of most any hobby-oriented pursuit, whether it be rare books, rare art, rare cars or vintage performance audio equipment.

[MarkFeld]

There was a fairly large spike near 1989-1990

 

If the prices go up now, how can you tell if coins are going up or hyperinflation is making US dollars worth less?

 

 

The 1989 spike was due almost completely to Morgans in MS65 (and better.)

 

There was a monstrous surge in prices paid for these coins. Grading was brand new, people could actually be guaranteed of getting MS65 (rather than a lot of sliders) coins, and they were being pitched for things like investment portfolios. Because so few had been graded, the demand for the ones that had was insane.

 

The prices soared. Common date MS65 Morgans sold for as much as $3,000.

 

It was a crazy, crazy time.

 

It all came crashing down by early 1990. Those same common dates selling for $3,000 in the spring of 1989 could be had for $150 by the summer of 1990.

 

It was hideous, and created a monstrous drag on the entire hobby for the entire rest of the decade, not to recover, as mentioned, until the early 2000's.

 

Sorry, but much of what you wrote above is incorrect. The 1989 spike included a lot more than Morgan Dollars. Walkers, silver commemoratives, Saints, mint state and Proof type, among other areas, participated strongly. And those are just the ones that I specifically remember.

 

Additionally, MS65 common date Morgans topped out at approximately $800, not (anywhere close to) $3000.

[e1cnr]

How much of the 1989 spike was due to underlying metal prices? Silver made a 500% run-up in a couple years....

 

[RWB]

FYI --

The actual cost of silver production (Silver Institute) was approximately $7.25 per Troy ounce in 2011, and much less than that over the past five years.

 

In 2011 (the last full year for which data are available) worldwide production of silver was 1,040.6 million Troy ounces. Total commercial demand for the same year was 876.6 million Troy ounces. Speculation and hedge demand (non-productive use) was about 164 million ounces. Thus, speculation in silver was approximately 15% in 2011.

 

Thus, the “rational market value” (absent speculation) of silver should be something greater that the cost of production, but much less than the current commodity price. That the commodity price is about $28/T.oz. suggests the free market is being manipulated.

 

To be clear, gold experiences similar influences.

 

The chart data should have commodity prices removed, if it is to illustrate any underlying value of metal.