Some collector/investors appearing to panic? Why?

[Polarbear69]

Went to my first coin show in Clifton New Jersey this last Sunday the 19th. There were about 30 dealers of various types and 50 or so customers checking the merchandise for that missing coin to their set or just looking for a diamond in the rough. One customer was telling a seasoned seller that "SILVER" will crash below $20 an ounce soon and to unload his coins. Being a veteran banker for over thirty years I tried to explain to him how the USA, Japan and other countries are printing money to stimulate their stagnant economies which has caused a boost to stock markets without real growth in the private sector. Short run stimulus can help but cannot be sustained without incentives for the private sector to really unleash the economy. As currencies continue to become less valuable, commodities will bounce back despite all the government intervention in the world. Everything happens in cycles and although it may take time, gold, silver and other commodities will appreciate again. Always think long term and you will prosper.

[mintcollector]

If you are collecting coins for their silver content only, then I would worry. I think must of us here are more in it for the numismatic value that coins have to offer. After all, if you are like me and pay $1000 + for a silver coin, does it matter if the price of silver drops to $10 an ounce?

 

 

[FishyOne]

...One customer was telling a seasoned seller that "SILVER" will crash below $20 an ounce soon and to unload his coins. Being a veteran banker for over thirty years I tried to explain to him how the USA, Japan and other countries are printing money to stimulate their stagnant economies which has caused a boost to stock markets without real growth in the private sector. Short run stimulus can help but cannot be sustained without incentives for the private sector to really unleash the economy. As currencies continue to become less valuable, commodities will bounce back despite all the government intervention in the world. Everything happens in cycles and although it may take time, gold, silver and other commodities will appreciate again. Always think long term and you will prosper.

 

I agree. Some people who own quantities of PMs and/or numismatic coins heavily tied to the price of PMs have been a bit panicky this spring. Not to mention a bit cranky!

 

In the U.S. $10 trillion in QE and deficit spending coupled with 0% interest rates for 5 straight years have the equity markets "re-inflated" with many selling off PMs under the assumption that our problems are solved. None of the problems that led to the 2008 crash have been solved. None. We can continue to devalue the USD and buy time. We could actually buy several more years, perhaps even a decade more.

 

Meanwhile silver could fall to $15 and gold to $900 short term. The fundamentals that toof silver to $50 and gold to $1900 are still in place though. Keep 5% to 25% of your assets in PMs and you won't be sorry.

[19Lyds]

Personally, I'd kinda like silver to tank out below $10 (even though it would ultimately cost me money on current inventory) so that it would be easier for me to buy lots of silver coins to go through.

 

As it sits right now, a 20 coin roll of 40% Kennedy's still costs quite a bit of money.

 

 

[mtnstyne]

The problem with silver spot price dropping is no one is selling. Last show I was at on 4 may all the dealers had their buy prices posted and only one was selling.

 

The paper trades don't seem to mirror the physical market.

[bartlesvilleok]

Seeing as that I am not heavily invested in PM I would like the price of gold to keep going down so I could work on my gold page of my 7070

 

[e1cnr]

obama has fixed everything

 

we all ok until can no longer buy foreign oil with US paper

[DaveG]

Hope you enjoyed the Clifton show - it's a fun little show that has grown quite a bit over the past few years.

 

Most of the offered material is somewhat lower-end (except for a couple of dealers), as I think many of the dealers with tables sell their better material to the many wholesale dealers who walk the floor.

 

Personally, I never try to explain economic principles to the silver and gold bugs - they won't hear you and you'll wear yourself out. One might as well be talking to a wall.

 

The next Clifton show is in June and then it takes a break for the summer - no show until September.

[World Colonial]

The problem with silver spot price dropping is no one is selling. Last show I was at on 4 may all the dealers had their buy prices posted and only one was selling.

 

The paper trades don't seem to mirror the physical market.

 

If this was the week that prices fell heavily, I suspect that many dealers had a loss on their inventory and think they can recover it by holding it. The PNG dealer I occasionally buy from told me they were waiting for "things to settle down". That also is not symptomatic of a long term market bottom.

[Walkerfan]

I read once where a good three part investment portfolio consists of one third bullion, one third generic business strikes and proofs and one third numismatically rare items. That sounds like a GOOD long term plan to me.

[SkyMan]

I read once where a good three part investment portfolio consists of one third bullion, one third generic business strikes and proofs and one third numismatically rare items. That sounds like a GOOD long term plan to me.

 

That sounds like a CRAZY plan to me. At most I would want rare coins and bullion to be 1/10th of my investment portfolio. The other 90% I'd want in stocks, bonds, real estate and cash.

[World Colonial]

I read once where a good three part investment portfolio consists of one third bullion, one third generic business strikes and proofs and one third numismatically rare items. That sounds like a GOOD long term plan to me.

 

That sounds like a CRAZY plan to me. At most I would want rare coins and bullion to be 1/10th of my investment portfolio. The other 90% I'd want in stocks, bonds, real estate and cash.

 

I agree with you except that I would be comfortable with more than 10% bullion but not with coins unless I had a LOT of money that I could both afford and do not mind losing. Coins are not "investments" at all but a combination of a consumption item and a form of speculation.

 

The only way that asset mix will likely provide a satisfactory (much less superior) financial performance is under conditions of prosperity or at least relative prosperity. Since I do not believe this is what in store at least for most people, I do not believe that most coins (yes, even those most on this board buy) are going to do that well financially though I admit there may be some exceptions.

 

One financial source I follow also makes the same case for gold and silver which they support by showing the prices of both compared to changes in GDP. Contrary to what most people (including here) probably believe, there is mostly a positive correlation between the two. In other words, the prices of both rise during economic expansions and vice versa.

 

On the South African message board where I post, those coins were doing well until late 2011 and had been mostly non-stop for at least 10 years. No doubt as a result, those contributors claimed that coins were a "hedge" against "hard times". Well, given what has happened to most of them since, this is obviously not true. US coins are a lot more liquid but the only difference I see between the two is one of degree and not kind.

 

[BillJones]

Having been a collector since the 1960s I've seen bullion and numismatic coin crashes that were far worse than this one. The original post has it right. NOTHING has been "fixed." The stock markets have been inflated by the incredibly low long term interest rate levels. When interest rates go up, which they will do either because the Fed stops increasing the money supply at break neck speed, or inflation increases the nominal interest rates (as opposed to real interest rates (nominal interest rate - the rate of inflation)) the stock markets will come crashing down as they did in the mid 1980s.

 

Gold and silver have been used as safety valves for this economy, but as can happen with all things, their prices were inflated by speculation. My advice is avoid panic selling and jump in if prices get really low. There is no security in paper and electronic dollars when the inmates in the Federal Government are running the asylum. In other words there is no reason to panic unless you bought your metals with borrowed money, and now have to cover your margins. That how the Hunt brothers blew their fortune.

 

[World Colonial]

In other words there is no reason to panic unless you bought your metals with borrowed money, and now have to cover your margins. That how the Hunt brothers blew their fortune.

 

Agrred with the caveat that there are also those who have bought the metals who cannot afford to maintain their positions under adverse economic conditions. I believe that there are many people who fit this description and many of them are coin collectors also.

[johnny9434]

obama has fixed everything

 

we all ok until can no longer buy foreign oil with US paper

we got plenty of paper and ink to print more up with if we need it ya know

[Polarbear69]

"OBAMA" has not fixed anything but help his crony agenda and friends. Bernanke fed buying up of securities and inflating the stock market helps the banks, hedge fund guys mostly. Individual 401k plans which are doing well are not liquid funds. Retired people of fixed income and working class whose incomes rise slowly are suffering badly.

[Jimmy Linguini]

What are you talking about?! Obama has changed so much stuff !!!

[Polarbear69]

If your a "SOCIALIST" with "COMMUNIST" beliefs you probably love "OBAMA". This country is based on a "GOVERNMENT" that does not inhibit free enterprise with high taxes and regulations. Gold, Silver and precious metals are our safety net if our currency collapses. Remember "Germany" in 1920's when the reich-mark died? Anyhow why not collect coins that are gold and silver and enjoy the safeguard of a precious metal with beauty of a coin. Best of two worlds.

[HCumberdale]

Well then...how about them coins?

[Polarbear69]

Attention: Mr. Jimmy Linquiniii,

 

You may have been posting here a long time but I have been an International banker for over 30 years and understand how the federal reserve can stimulate and sometimes cause inflation or a recession. The fact is that since your probably at least 20 years my junior, will suffer more from "OBAMA" policies than myself. So enjoy the Kool-aid as i will continue to protect myself against the tyranny of a humongous selfish government.

[BillJones]

"OBAMA" has not fixed anything but help his crony agenda and friends. Bernanke fed buying up of securities and inflating the stock market helps the banks, hedge fund guys mostly. Individual 401k plans which are doing well are not liquid funds. Retired people of fixed income and working class whose incomes rise slowly are suffering badly.

 

Yep, people on fixed incomes are getting hammered because inflation is a lot worse than the trumped up government statistics portray. All you need to do is go the super market and look at the smaller size of containers that are sold for the same price.

 

Also the cost energy is not figured into the "cost of living" any more. What world are these government "economists" living in? It sure isn't the real world.

[coinman_23885]

obama has fixed everything

 

we all ok until can no longer buy foreign oil with US paper

 

The Federal Reserve (headed by a Chairman Ben Bernake) sets monetary policy. He was the Chairman under BOTH President Bush and President Obama. Moreover, presidents generally have a limited effect on the economy (usually Congress is the culprit).

[Raisethis2]

The cost of energy hasn't been calculated into inflation figures for 20 years or more.

 

Would it be fair to say that the reduced size of the goods/foods we buy is also a function of corporate greed or is that Obama's fault too?

 

 

[BillJones]

Yep corporations are greedy and government is perfect ...

 

The cost of Kool Aid goes up and up, and we all have to pay for it.

[Raisethis2]

I never said government is perfect, far from it however, corporations decide who gets the job and when, how much it pays and what benefits (if any) the employee and his/her family enjoy. Whether to hire Americans to do the work or hire the Chinese. As long as they have this power Kool Aid drinkers like me will never live in denial regarding who "shares" the blame.

 

The price of silver closed below $22.25 today, the hidden inflation you see apparently isn't so severe as to keep the slide in check.

 

But then again, I'm no International Banker.

[OldTimothy]

I am new to numismatics and bullion as well. I have recently purchased some of both, along with having a FOREX account that I am in an open silver trade in. I just looked at an Historic 100 year silver spot chart. -cant sleep at night now -. Is it ME or are we headed for a repetitious three decade 6 dollar silver spot cycle?

[Walkerfan]

I read once where a good three part investment portfolio consists of one third bullion, one third generic business strikes and proofs and one third numismatically rare items. That sounds like a GOOD long term plan to me.

 

That sounds like a CRAZY plan to me. At most I would want rare coins and bullion to be 1/10th of my investment portfolio. The other 90% I'd want in stocks, bonds, real estate and cash.

 

He didn't mean as your ENTIRE investment portfolio----he just meant as far as coins and bullion is concerned. Yes, that WOULD be a little crazy.

[FishyOne]

I am new to numismatics and bullion as well. I have recently purchased some of both, along with having a FOREX account that I am in an open silver trade in. I just looked at an Historic 100 year silver spot chart. -cant sleep at night now -. Is it ME or are we headed for a repetitious three decade 6 dollar silver spot cycle?

 

Could be if $17 trillion in debt and $100 trillion in unfunded liabilities don't matter. Some say they don't matter; they might be right. Or perhaps we'll "solve" the debt crisis and the problems in the economy and things will work out. However, we do have serious structural problems with our government and in our economy. These are not cyclical issues that will work themselves out in time. They will require major changes and massive cuts.

 

I would never advocate anyone holding over 25% of their assets in PMs and even that is way too high for most people. 10% PMs is an average "ballpark figure" as a safety net for most people. Best of luck and God Bless.

[Polarbear69]

Very interesting graph for prices. After our federal reserve stops printing money and supporting a weak economy, it is quite possible that the inflation period of around 1980 will occur. Our only hope is for our gov't to lower taxes and regulations to stimulate economy and private sector grows like the Reagan years. Naturally if high inflation does occur and our currency weakens, gold and silver will hit new all time highs.

[Mark T]

If your a "SOCIALIST" with "COMMUNIST" beliefs you probably love "OBAMA". This country is based on a "GOVERNMENT" that does not inhibit free enterprise with high taxes and regulations. Gold, Silver and precious metals are our safety net if our currency collapses. Remember "Germany" in 1920's when the reich-mark died? Anyhow why not collect coins that are gold and silver and enjoy the safeguard of a precious metal with beauty of a coin. Best of two worlds.

 

Obama is neither a socialist nor communist. He does not control the Fed – you can blame Bernanke for the mess he has created. This is a coin discussion group – don’t bring your obvious political agenda here.