Coin and Banknote Markets Strong Amid Global Crisis 0

[RWB]

Some of the gold ancient coins in Heritage's CSNS are worth the drive and dive.

[World Colonial]

3 hours ago, GoldFinger1969 said:

WorldC, when a penny or nickel or dime trades for $20 let alone $200 (or egads, $2,000 !!) that's alot more fluff and mumismatic premium than you find in most gold coins.  Same thing with MSD's.  So even though coin prices corrected in those smaller denominatons, I still think you could have trouble down the road.

Most people got into those sets as kids -- I guess -- because starting off collecting them was easy and cheap.  Not many 10-year olds can start out with Saint-Gaudens or Liberty Double Eagles.

For me, my Saints and Liberty's are a numismatic, artistic, and bullion-inspired investment.  

I agree with you. 

Perhaps I misunderstood prior post but what you just wrote was the primary point of my last post by referring to the PCGS indices.  I didn't mention Morgan dollars but I expect its financial performance to be quite poor also.  Main thing going for it is the next metals bull market.This should attract money to it (as usual) but I still think the premiums will decrease noticeably.  Otherwise, the premiums especially on the most common dates are inflated given how incredibly common these coins are.  The most common ones should be worth modest premiums to spot up to low to mid MS grades.

[RWB]

When the unnecessary "grading" and postage and assorted valueless fees are subtracted, one gets closer to a meaningful collector value. Unfortunately, modern collectors have become completely dependent and will die from the "collectors' cancer" before they give it up.

[World Colonial]

2 minutes ago, RWB said:

Some of the gold ancient coins in Heritage's CSNS are worth the drive and dive.

I looked at the selection and I agree with you.  In world coinage though the limited selection is quite striking.  I didn't look at everything but there it's particularly noticeable in Latin America which is where I pay the most attention.  Nothing where I remotely have any interest.  British coinage is still quite good.

[GoldFinger1969]

18 minutes ago, RWB said:

Some of the gold ancient coins in Heritage's CSNS are worth the drive and dive.

Which ones ?  Are you bidding ?

[World Colonial]

1 minute ago, RWB said:

When the unnecessary "grading" and postage and assorted valueless fees are subtracted, one gets closer to a meaningful collector value. Unfortunately, modern collectors have become completely dependent and will die from the "collectors' cancer" before they give it up.

I substantially share this sentiment.

Earlier here and on another coin forum, I expressed the opinion that most post-1933 US coinage will sell for less than the grading fee but what I left out here is that I expect it to apply in grades up to MS-66.

This coinage is very to extremely common in this quality measured by TPG grade.  Most of it (at least 95% even prior to SQ) is almost certainly an R-1 (1250+) with the many later silver dates (such as 1955-1964 quarters) possibly having at least 10,000.  This last group was hoarded in mass by the roll and a noticeable supply never even circulated.

Currently, most of this coinage sells for more than the grading fee in MS-66 but that is only because it isn't worth the bother of getting graded.  If most of the current supply was in a TPG MS-66 holder today, practically all R-1 (and R-2) would be selling for less right now even before prices decline any further.

This is also somewhat true for many 1933 and earlier dates in (somewhat) lower grades.

[GoldFinger1969]

22 minutes ago, World Colonial said:

Otherwise, the premiums especially on the most common dates are inflated given how incredibly common these coins are.  The most common ones should be worth modest premiums to spot up to low to mid MS grades.

Agreed....I haven't tracked the premiums for MSDs but I suspect they ran up much further in previous bubbles based on what I have read.  MS65 generic Saints had premiums of up to 500-700% to bullion, but in the last few years its been 25-30% or so.

This chart only goes out to 2014 but you can see how long it took to "burn off" the elevated premiums.  

Edited April 7, 2020 by GoldFinger1969

[RWB]

The premium in 1948, which was driven by speculators and hoarders, was approximately 41%.

 

[ 1.075oz  x  0.900 = 0.9675oz x $35/oz = $33.8625 bullion value of a BU double eagle in 1948. Swiss and French markets were paying $46.00 to 48.50 each. This made the speculators’ premium about 41%. ]

I expect that there is very little real "collector premium" except for the best condition coins. The businesses that handle these items do not follow a conventional business model. The De Beers cartel model is closest, and that is not a competitive approach but one focused on profit preservation and market control. Just like diamonds, Double Eagles and their siblings and not rare, but heavily managed. An urgent 2am phone order for 1,000 DE would generate nothing but a sleepy yawn, and a dial tone buzzzz. Add a zero and they'll put on their slippers and talk. The hype we've seen recently about "new hoards coming from Europe" is bologna with a lot of pepper pretending to be caviar - the coins have been floating around for decades, maybe a century or more - and have cycled through more greasy hands than one might imagine.

PS: Did you realize that a solid gold toilet would slowly collapse under its own mass?

Edited April 7, 2020 by RWB

[cladking]

19 hours ago, RWB said:

When the unnecessary "grading" and postage and assorted valueless fees are subtracted, one gets closer to a meaningful collector value. Unfortunately, modern collectors have become completely dependent and will die from the "collectors' cancer" before they give it up.

And oddly enough US and world moderns have become the only coins still increasing in value other than "trophy coins".  

[GoldFinger1969]

5 hours ago, RWB said:

An urgent 2am phone order for 1,000 DE would generate nothing but a sleepy yawn, and a dial tone buzzzz. Add a zero and they'll put on their slippers and talk. The hype we've seen recently about "new hoards coming from Europe" is bologna with a lot of pepper pretending to be caviar - the coins have been floating around for decades, maybe a century or more - and have cycled through more greasy hands than one might imagine.

PS: Did you realize that a solid gold toilet would slowly collapse under its own mass?

No I didn't know that....but did YOU know that if you put Instant Coffee into a microwave you can go back in time ?  LOL

Hey, 1,000 common DE's at $30 profit per coin is a $30,000 payday...not bad in my book.

Edited April 7, 2020 by GoldFinger1969

[GoldFinger1969]

20 hours ago, World Colonial said:

I substantially share this sentiment.

Earlier here and on another coin forum, I expressed the opinion that most post-1933 US coinage will sell for less than the grading fee but what I left out here is that I expect it to apply in grades up to MS-66.

This coinage is very to extremely common in this quality measured by TPG grade.  Most of it (at least 95% even prior to SQ) is almost certainly an R-1 (1250+) with the many later silver dates (such as 1955-1964 quarters) possibly having at least 10,000.  This last group was hoarded in mass by the roll and a noticeable supply never even circulated.

Currently, most of this coinage sells for more than the grading fee in MS-66 but that is only because it isn't worth the bother of getting graded.  If most of the current supply was in a TPG MS-66 holder today, practically all R-1 (and R-2) would be selling for less right now even before prices decline any further.

This is also somewhat true for many 1933 and earlier dates in (somewhat) lower grades.

I guess that was the attraction in the first place...you could collect post-1933 or post-1945 coins and get 90-95% of a complete set for minimal money.  Most 12-year old kids with a paper route couldn't afford Double Eagles made out of gold !

[GoldFinger1969]

21 hours ago, RWB said:

When the unnecessary "grading" and postage and assorted valueless fees are subtracted, one gets closer to a meaningful collector value. Unfortunately, modern collectors have become completely dependent and will die from the "collectors' cancer" before they give it up.

I guess this sort of makes sense for lower-priced coins, but it is good from a handling and protection POV to have a nice slab protecing your $10 penny or $15 dime.

I'm going to buy a cheapo Saint and MSD to handle and feel with my fingers...but my main atrractions I want protected.

[kbbpll]

Most of this banter back and forth centers on the perspective of "investment", which makes sense given the "markets strong amid global crisis" title. However, we are missing the perspective of collectors like me. I do not purchase coins as an investment. It is entirely, 100%, disposable income. I have zero interest in making money on it. It's a hobby. Am I stupid with my disposable income? I try not to be, but when I am, because I really want a particular coin and pay a bit more than I should for it, it's no different than $20 a month on a Netflix subscription I rarely use, or my wife spending $45 a month on a health club she can no longer go to. It's disposable income. I have never sold a coin. I never intend to sell a coin. If I really needed the money, I'd take whatever I can get for the coins in order to have the money. I'm not going to calculate what I might have gained or lost from the expenditure. Any loss is outweighed by the dollar value of my enjoyment. (Put my enjoyment value into a historical chart, and you'll see my many market bubbles). My heirs get to have some free money. Could I have "invested" the money and made my heirs wealthier? Sure, but then it wouldn't be disposable income, would it? If my disposable income plummets, so does everyone else's, so does the price of coins, and I can therefore purchase the same relative amount of hobby enjoyment factor. That's not good news for people in this to make money, but an awful lot of us aren't.

[GoldFinger1969]

KBB, I think most of us here realize that coins/bill are NOT an investment and that we buy them based on our love for the hobby and our personal enjoyment.  That said, if you KNOW that a sector you want to invest in has price weakness ahead for a big chunk of today's purchase price and/or it will last a while (maybe years), you have to plan accordingly.  Maybe you buy the cheaper coins now and get the more expensive ones on sale later on.  Whatever....

I think for most of us we pretty much buy what we want if it is "discretionary" income because waiting 2 years or 10 years to get a prized coin isn't what most of us want.  Plus, we can't know for certainty.

I'm hoping to buy a 1907 High Relief (AU58) in the next year or so....price has weakened in recent years, maybe 20% or so.  It's possible that AU58 might be even cheaper in 2023 or so, but who knows ?  It could cost more, too.

[World Colonial]

23 hours ago, cladking said:

And oddly enough US and world moderns have become the only coins still increasing in value other than "trophy coins".  

Only?  How can you possibly know that?

[GoldFinger1969]

11 minutes ago, World Colonial said:

  And oddly enough US and world moderns have become the only coins still increasing in value other than "trophy coins"  // Only?  How can you possibly know that? - from CLADKING and WORLD COLONIAL

I think the time frame is key there.  The U.S. Coin Market -- as measured by the PCGS 3000 index but also prices for big categories of the Top 10 most popular coin types -- are very erratic price-wise.  You have a few bubbles punctuated by massive drops, retracements, and very few years of slowly rising prices.

This is just my opinion....based on demographics.....and that as you had the 1st wave of post-WWII collectors start to pass on (die) in the last 10-15 years or so....their common coin collections (SLQs, Barbers, Franklins, Wheats, etc.) found much fewer buyers than would be the case 30-50 years ago.  Maybe the TOTAL number of coin collectors is up or flat from 50 or 65 years ago, I dunno.  But many of today's collectors are into moderns or bullion or quasi-bullion, etc.

So....you get tons of medium-quality or even high-quality (but not ULTRA-HIGH quality) coins hitting the market....nobody really wants them even at a "good" price based on The Red Book...and hence you have a "stealth bear market" where the price a few years ago (or maybe as of today) suddenly falls 30-50% from 5-10 years ago.

That's why aside from the occasional take-a-flyer on a high-graded low-denomination coin post-1900 (or post-1945), I pretty much stick to bullion or bullion numismatics, like MSDs, Saints, and Libertys.

Edited April 8, 2020 by GoldFinger1969

[World Colonial]

19 hours ago, kbbpll said:

Most of this banter back and forth centers on the perspective of "investment", which makes sense given the "markets strong amid global crisis" title. However, we are missing the perspective of collectors like me. I do not purchase coins as an investment. It is entirely, 100%, disposable income. I have zero interest in making money on it. It's a hobby. Am I stupid with my disposable income? I try not to be, but when I am, because I really want a particular coin and pay a bit more than I should for it, it's no different than $20 a month on a Netflix subscription I rarely use, or my wife spending $45 a month on a health club she can no longer go to. It's disposable income. I have never sold a coin. I never intend to sell a coin. If I really needed the money, I'd take whatever I can get for the coins in order to have the money. I'm not going to calculate what I might have gained or lost from the expenditure. Any loss is outweighed by the dollar value of my enjoyment. (Put my enjoyment value into a historical chart, and you'll see my many market bubbles). My heirs get to have some free money. Could I have "invested" the money and made my heirs wealthier? Sure, but then it wouldn't be disposable income, would it? If my disposable income plummets, so does everyone else's, so does the price of coins, and I can therefore purchase the same relative amount of hobby enjoyment factor. That's not good news for people in this to make money, but an awful lot of us aren't.

It varies with the coins bought.

Those who buy common pre-1933 gold and generic Morgan Dollars are almost certainly place financial considerations first.  The coins are too common for the likely size of the collector base.

The lower priced coinage (such as for the amounts you used) are presumably predominantly an alternative to other consumption expenditures.  

The rest I believe are a combination of both.  It just depends upon their attitude toward collecting.  The primary thing that leads me to believe that financial considerations are more important than your post seems to indicate is because I almost never read how wonderful the stagnant or declining US price level is since approximately 2008.  I read the opposite.

It's anecdotal but given what most collectors are buying, I see no reason to believe that more than a low percentage are treating any "material" outlay (a subjective concept I admit) as a predominant consumption expense.

One post here seemed to imply that I view my collecting predominantly financially.  If I did, I'd have a much lower outlay in my collection or woudn't be a collector at all, as I consider coins to be a poorly performing "investment".  But then, I don't buy the types of coins most collectors do either.

[World Colonial]

1 minute ago, GoldFinger1969 said:

I think the time frame is key there.  The U.S. Coin Market -- as measured by the PCGS 3000 index but also prices for big categories of the Top 10 most popular coin types -- are very erratic price-wise.  You have a few bubbles punctuated by massive drops, retracements, and very few years of slowly rising prices.

This is just my opinion....based on demographics.....and that as you had the 1st wave of post-WWII collectors start to pass on (die) in the last 10-15 years or so....their common coin collections (SLQs, Barbergs, Franklins, Wheats, etc.) found much fewer buyers than would be the case 30-50 years ago.  Maybe the TOTAL number of coin collectors is up or flat from 50 or 65 years ago, I dunno.  But many of today's collectors are into moderns or bullion or quasi-bullion, etc.

So....you get tons of medium-quality or even high-quality (but not ULTRA-HIGH quality) coins hitting the market....nobody really wants them even at a "good" price based on The Red Book...and hence you have a "stealth bear market" where the price a few years ago (or maybe as of today) suddenly falls 30-50% from 5-10 years ago.

That's why aside from the occasional take-a-flyer on a high-graded low-denomination coin post-1900 (or post-1945), I pretty much stick to bullion or bullion numismatics, like MSDs, Saints, and Libertys.

My reply wasn't in the context you indicate.  What I meant is that with thousands of series and hundreds of thousands of coins (country, series, date, denomination), no one can possibly know what exactly is worth more or less, except in low proportion.

The evidence demonstrates that the  US classic series you listed have lost "share of wallet" predominantly to the ASE and world NCLT first and somewhat to world coinage and ancients second, not US moderns.  This coinage either didn't exist previously (NCLT) or wasn't readily available (world and ancients).

No one can know what more than a very low fraction of world "moderns" are generally worth either, given that at least tens of thousands qualify under practically any definition.  This is both now and over any time period, since limited price history is available and catalog list bears no relation to reality.

[GoldFinger1969]

5 hours ago, World Colonial said:

My reply wasn't in the context you indicate.  What I meant is that with thousands of series and hundreds of thousands of coins (country, series, date, denomination), no one can possibly know what exactly is worth more or less, except in low proportion. The evidence demonstrates that the  US classic series you listed have lost "share of wallet" predominantly to the ASE and world NCLT first and somewhat to world coinage and ancients second, not US moderns.  This coinage either didn't exist previously (NCLT) or wasn't readily available (world and ancients).  No one can know what more than a very low fraction of world "moderns" are generally worth either, given that at least tens of thousands qualify under practically any definition.  This is both now and over any time period, since limited price history is available and catalog list bears no relation to reality.

What would be very interesting would be to focus on modern coins graded by the TPG's today vs. 30 years ago.  I see everyone chasing PF70s and DCAMs and other label designations.  That seems to be where the growth is on Ebay and at coins shows, even if the "oldtimers" like Heritage and Stacks do very little with that stuff.

Certainly, these bulk submission orders I always read about with the TPGs are not for Wheat Pennies !

Edited April 9, 2020 by GoldFinger1969

[World Colonial]

1 hour ago, GoldFinger1969 said:

What would be very interesting would be to focus on modern coins graded by the TPG's today vs. 30 years ago.  I see everyone chasing PF70s and DCAMs and other label designations.  That seems to be where the growth is on Ebay and at coins hows, even if the "oldtimers" like Heritage and Stacks do very little with that stuff.

Certainly, these bulk submission orders I always read about with the TPGs are not for Wheat Pennies !

Well, it's easy enough to confirm my prior post is "directionally" accurate simply by looking at the TPG population data.  This especially applies to US, China, Canada, Australia and to some extent South Africa (silver KR) NCLT.

In the 1960's, probably at least 90% of the US collector base collected at least one of the circulating designs as their primary series, though maybe in noticeably lower proportion at any "meaningful" premium to FV.

Today, maybe 70% to 80% do (a total guess) but it has to be noticeably lower given what has happened to the prices of most coins in these series since 2008.

Several decades from now?  Probably 50% or even less due to new coins that don't exist yet (probably mostly new NCLT again) and a changing demographic composition where a noticeable proportion has little if any affinity for this coinage.  

Edited April 9, 2020 by World Colonial

[Henri Charriere]

On 4/3/2020 at 11:52 PM, GoldFinger1969 said:

Oh, trust me, I'm aware of the speed of the decline.  Been watching the markets 24/7 for 30 years. 

You could be right on the gold decline in 2008-09, I just glanced at the first chart that gave me a decent scale.  But the decline was bigger then and so far gold is holding up.  We'll have to see what happens going forward.  

[Dated thread. I know.] Nevertheless, gold is pre-ordained to go Excelsior! (that's Ever Upward!) to you non-New Yorkers.  The market is like it always was: buy low, sell high. It is quite possible the principal trait of a scamster is impatience.  I have more than enough patience but I am given to impulsiveness if circumstances change.