Something to think about before spending all your money on coins.

[truthteller]

I read an interesting article in the Business section of the Sunday LA Times. The article dealt with the massive amount of foreign ownership of US Treasury bonds. The article went on to discuss a recent Sept. 8 T-Bill auction, where the Chinese and Japanese buyers did not show up, causing a mini-panic in the Bond market that week. The article also mentioned that 1/2 of T-Bill purchases are by foreign investors and that over 1/3 of the outstanding debt is owned by foreign governments, with the major players being Chinese and Europeans. The article further discussed that if China and Europeans stopped buying, the US economy would fold very quickly since there would not be enough capital to cover the cash flow, however, if taxes were immediately raised and major cuts were immediately implemented, the rebound could take hold in a few months. So, here's the scenario. If foreign governments wanted to stick it to the US, they could. And here's the question, could the coin market absorb an exodus from coins and a dumping of coins on the market in order for some folks to raise cash? The first thing to go when times get tough are collectibles.

 

 

TRUTH

[Leothelion]

The first thing to go when times get tough are collectibles.

 

Goodbye moderns!!!

 

Hey, I thought it was the sex life! Oops, that's when we get old! Sorry!

 

Leo

[gmarguli]

The article further discussed that if China and Europeans stopped buying, the US economy would fold very quickly since there would not be enough capital to cover the cash flow, however, if taxes were immediately raised and major cuts were immediately implemented, the rebound could take hold in a few months. So, here's the scenario. If foreign governments wanted to stick it to the US, they could.

 

 

Of course without free cash the US can't spend the money and therefore the other countries have a lot of products that they can't sell and their economy crashes at the same time.

 

 

And here's the question, could the coin market absorb an exodus from coins and a dumping of coins on the market in order for some folks to raise cash? The first thing to go when times get tough are collectibles.

 

No. At least not a big dump of generic coins. A dump of quality - yes. A dump of common and market quality - no.

[michael]

then many buying opportunities with access to cash coin collectors and a good flushing out of the system

 

michael

[Tradedollarnut]

The best time to have money available to spend is when no one else does!

 

I've been trying to get my mind around the economic ramifications of the falling dollar. In one sense, it's ok to stick one's head in the sand and just not worry about it. After all, other than oil and other commodities or certain things that we have to import, unless you go overseas it just doesn't matter much. On the other hand, it would be nice to take advantage of a movement away from the dollar by managing to maintain a more worldwide purchasing power.

 

Still no answer....

[Architecht]

The best time to have money available to spend is when no one else does!

 

I've been trying to get my mind around the economic ramifications of the falling dollar. In one sense, it's ok to stick one's head in the sand and just not worry about it. After all, other than oil and other commodities or certain things that we have to import, unless you go overseas it just doesn't matter much. On the other hand, it would be nice to take advantage of a movement away from the dollar by managing to maintain a more worldwide purchasing power.

 

Still no answer....

 

. You've got to think that a falling dollar makes it more expensive to out-source to other countries... that can't be all bad for our economy.

[CarlWohlforth]

It is our government that has the deficit. How many coin collectors have debt denominated in a foreign currency? The falling dollar won't directly force collectors to sell.

 

Other big economies have supported the dollar. It would be difficult for them to gun for a dollar crash because it would make everything they try to sell to the US more expensive so the US will buy less.

 

As the dollar drops, as I expect it to continue to do, US exports get cheaper for buyers in other countries and imports get more expensive. If any exporter collects coins they should have more business so should have more money to buy coins with. On the other hand this shouldn't hurt coin collectors as US consumers can substitute American made goods for foreign imports.

 

US interest rates will likely increase. This could hurt some heavily indebted coin collectors. Personally I couldn't see putting a significant amount of money into coins if I were in debt. So all in all this is not something I am worrying about.

[Oldtrader3]

US foreign debt sale attractiveness is highly dependent on interest rates. US Rates are still very low, considering our massive trade deficits. If we can not sell our debt, Greenspan will have to raise the prime rate again which will create more demand.

 

Most Asian Central Banks would rather hold debt in US dollars more than almost any other currency. IMHO, this debt subscription issue is short term.

[0john0-migration]

I'm not too worried, since I primarily collect Darkside, and the market in Europe would largely be unaffected, I imagine.

[cladking]

There have been people betting against the dollar and the future for hundreds of years. So far the bulk of the former have lost and every single one of the latter. Whether you bury your head in the past or not, the sun will come up in the morning and the year will turn yet again.