What areas concern you the most for the future of the coin industry?

[CameoCC]

As one looks over the overall coin industry, what areas concern you the most for the future health of the coin industry.

 

Here are two for me:

 

1 - The standards on reserve pricing - TeleTrade compared to ebay

 

2 - The potential conflict of interest between dealers and grading services.

 

What are your opinions?

 

Todd

[jtryka]

I think the increased move to electronic forms of currency will eventually render coins obsolete, so that could be bad for modern collectors, but it will also damage the market for everything else (i.e. look at stamps!). I think that any major must in some of the more inflated areas of the market could also damage it severely as many newer collectors/investors flee in disgust, never to return.

[DonHeath]

Increased technical and mechanical prowess of the coin doctors. I think the ability to perpetrate fraud will be the bane of the industry. As techniques improve, and mechanical or chemical alteration becomes undetectable, a pedigree will become more important than a holder. I believe a well documented pedigree already improves the value of more expensive pieces, and will eventually become a requirement in order to sell such a coin at a fair price.

[EVillageProwler]

What concerns me is the overall lack of oversight (call it lawlessness) of this industry by organizations charged with and willing to use remedial and punitive powers.

 

I would like to see these organizations come from within the industry, a posse collectorum if you will, rather than from law enforcement. Sure, I think we should have a teethed Hobby Fraud law, but it should be up to the posse to refer cases to law enforcement.

 

As suggested by the name, the posse collectorum will be comprised democratically by non-professional members of the industry. I acknowledge the considerable importance of the dealers, numismatists and grading services. Ultimately, however, it is the collectors who are the consumers.

 

The posse will have representation, also chosen democratically, from the professional ranks. The posse's powers will be remedial (as an arbitrator) and punitive (issue scathing judgement of a misbehaving member and referral to law enforcement).

 

Their powers are binding over its membership, much like what the ANA and PNG can do to its own.

 

EVP

 

[mark]

Todd:

 

While I agree with your concerns and Don's, I worry most about the fact that coin collectors tend to be middle-aged white males. In order for there to be a demand for our coins when and if we want to sell them years down the road, I think we need to attract a younger, more diverse set of collectors. I used to buy Lionel trains and I observed the price of 1930s standard gauge trains falling drastically as the people who played with these as kids left the hobby of train collecting. (Many left permanently, if you catch my drift....)

 

With luck, coin collecting will avoid this fate. The State Quarter program perhaps will add younger, more diverse colelctors. But I don't think we will know for sure if that program succeeded until several years after the last state quarter has been issued and we can "look around" to see how many of the new collectors have stuck it out.

 

So, I think issues with grading are a shorter run issue; issues with coin doctors are a major short-run and long-run issue; and the issue of new collectors is an important long-run issue. And, the elimination of coins would be a tremendously adverse issue if it occurs, which it might.

 

Mark

 

 

[gmarguli]

In the short term, the shifting grading standards, the modern hype, the registry creating plastic buyers, and the mint creating a ton of new designs that are ugly (i.e. state quarters). Coin doctoring to a point.

[TomB]

This is an excellent topic. So good, in fact, that I have skipped all the previous responses and just dove right into writing this one. If I am repeating anything mentioned by other posters, I apologize for the redundancy. In my opinion, several things can hurt the numismatic market a great deal.

 

The first, and perhaps broadest of these, deals with third-party certification. Let me first state that I think the advent of third-party certification, in its current form, is one of the greatest advances for numismatics. Cumulative dangers represent a case of killing the goose that laid the golden egg. Several factors could kill this goose. The level of proficiency shown by the best coin doctors is quite high and threatens to outstrip currently available detection technology and expertise. Whether the fraud is perpetrated by smoothing, artificial toning, applied cameo or laser induced luster all of these acts serve to undermine confidence in third-party certification. No doubt, some altered coins do make it into holders; however, the mere perception that large numbers of altered coins make it into holders will damage the hobby/industry even if it is not true. As with other factors regarding third-party certification, the perception of reality is likely to be more important, to many people, than reality. Another problem with the third-party industry is the appearance of unethical behavior. The attachment of auction houses, third-party certification companies and professional coin dealers only serves to heighten suspicion throughout the hobby/industry. These should be separate entities. The fact that they are not can only cause concern for insider grading. In addition, the perception of consistency or lack thereof, in graded material, can and will hurt this market. The subtle shift of grading standards over years or even months does not endear confidence that the coin in the holder will grade the same if it were cracked out. By extension, this calls into question the value of the coin in the holder and, of course, the holder itself. Lastly, the companies that call themselves third-party certification companies should be held to a uniform grading standard if they are going to use the accepted nomenclature of numismatics. It is quite harmful to have rogue companies that do nothing but facilitate the fleecing of the consumer. All these points can undermine confidence in third-party certification, regardless of how accurate they are.

 

A second point of danger is the intense current marketing of nearly all coins as some type of rarity. Many call this hype and that may be the best word for it. An optimistic take on the consequences of extreme hype might be that there would be a correction of the market, a crash. This would hurt many but would also likely keep many people in the pool during the recovery. Worse yet is if this hype causes an extreme correction in values and drives those people, and their money, away from the hobby/industry permanently. This could happen if the hype were blatant and subsequent crash steeper or longer.

 

Lastly, the actions of the US Mint itself are a danger, in my opinion, to the hobby/industry. Stagnant coin designs that are reduced in artistic value in order to prolong the useful life of die pairs hurt the aesthetic appeal of modern circulating coinage. The stagnation in design also seems to keep a lid on excitement for the hobby/industry by keeping novel coinage out of circulation. The modern commem program appears to be the worst culprit in the Mint’s poor coinage paradigm. Most designs are largely uninspired and display vastly more technical prowess than artistic skill or vision. Such pieces quell the possible enthusiasm for the series and lower expectations of Mint products even further. To exacerbate the problem, the Mint apparently likes to charge a hefty user fee, or surcharge, for each issue and these monies are not always well accounted for. This serves to breed contempt.

 

I am certain that I have missed many valuable points and will now go back and read the thread in its entirety.

 

[CameoCC]

I believe that one way we can to to overcome the potential concerns is through education. I am researching the notion of a CD or Video Tape series to be given out at cost.

 

We have seen pamphlets on cleaning coins and history of coins.

 

I can see some educational material on (including the two pamphlets above):

 

1 – Certified coins

2 – Buying and selling coins

3 – Registry sets

 

Todd

 

[braddick]

I agree with Tom.

That which was to save the Industry may well damage it.

 

It's almost like cutting off your foot to save a stubbed big toe.

[Hoot]

Tom's reply was excellent, and Greg and others have hit on some very salient points.

 

I only have to say that the points made about the U.S. Mint cannot be overemphasized. The Mint is killing the joys of modern collecting, and like it or not, that's where most people begin. And there is something more insideous that goes hand-in-hand - a loss of value among the public at large for coinage and its historical import. I often recount to people that the Washingtons (Martha and George) contributed their own silver to the Mint when the doors first opened in 1792, and that Martha may have even contributed some family silverware for the effort of creating our first viable American coinage. This amazes people. And there are many stories of greatness in the history of this country's coinage. We have to become vessels for recounting these stories so that the historical importance of our legacy and inheritance is not lost.

 

How does the Mint foster the legacy and history of our great coinage? It doesn't. Worse, the history of autonomy of the Treasury in its actions of creating coinage that mirrors the core freedoms and execution of justice in this country have been handed nearly wholesale over to the politicians of the Congress and Senate. That autonomy was set forth by earlier politicians in recognition that our coinage would otherwise become trapped in politics - where it is today.

 

The Treasury (and Mint) needs to recover its autonomy. We, as collectors and numistmatists, must do everything we can to pursuade our politicians to recognize the historical import of this division and act on it. We also need to spread the education of history to as many as we can reach about our coins. The more we do, and the more downright angry we can make the public at large at the loss of contextual integrity of our coinage, the more likely we can influence the actions of the Mint, either directly or indirectly.

 

Hoot

[Peace_Fan]

Some have already mentioned it, but the biggest issue I see is the reduction in the number of collectors over time. While I collect primarily because of my love for coins, at some point in the future my collection will be sold (probably by my descendants) and I would hope that there will still be some significant value from my efforts. Like most other things of value, the prices of coins are determined by the simple laws of supply and demand. If the number of active collectors decreases by 10-20% the prices of coins will plummet.

 

Many reasons have been given above for a possible reduction in the number of collectors, but most we can't do anything about. We can, however, become ambassadors.

 

I do all that I can to promote the hobby: I give coins as presents to relatives, friends' children, my own children, etc. The younger brother of one of my son's friends noticed a coin out on the counter one day at my house, so I gave it to him (it was a circulated silver dollar worth $8-10). He's now told his dad that he wants to start collecting coins. For this hobby to continue on into the future someone has to bring new collectors in...who better than us?

[paigow_johnny]

New collectors is a real toughie...and I speak as a 43 year old man who came back to the hobby 2 years ago. A lot of kids can catch the bug while young...but as you progress into young adulthood, a lot of other things jump into the priority list...girls, high school, girls, college or getting a job, beer, girls, starting a family, responsibility and financial burden, women.....etc.

 

I don't have a good answer, but the toughie is to get the "younger people with some money"...the 25 to 40 demographic....to stay with or dive into the hobby.

 

It's probably not seen as a "vibrant" passtime for a young healthy person...and that is a hard paradigm to crack. But I think we're better off than the philatelists.

[GDJMSP]

I'll repeat what EVP had to say - the same thing I have been preaching about for the past year and half now - one consistent set of grading standards throughout the industry coupled with oversight & enforcement. We cannot solve the other problems within the industry until those things come to be.

[chrisfuccione]

 

A few observations I have

 

I totally agree that the State Quarter has brought a lot newbies in to the fringes of the hobby. The problem is to keep their interest to last until the end of the run and get them into other coins. Some problems I see with that is

 

a) We are in direct competition with MTV, the Internet and Playstation (immediate gratification) and other stuff that fills the day (after school jobs, Sports, and girlfriends)

 

b) Collecting is not "cool" to teenagers. Be it coins comic book, stamp, or baseball cards. There is an image of only"geeks" doing that.

 

c) The local coin club has either disappeared or has become out of touch with younger collectors. What is the average age at the clubs? From what I've been hearing around I would be about the youngest member at 37. They are not doing enough to attract YN's. Has the Internet taken over the role of coin club? I hope not because a lot would be missed if that were the case. If I didn't have a few collectors and coin dealers around me when I started to collect to teach me about the hobby I probably wouldn't be here now. I needed the face to face help (how can you teach someone how to grade over the Internet?).

 

d) There are so many boiler room dealers, TV shopping networks, and third rate grading companies that are turning new collectors away from the hobby.

 

e) As we just saw with the Virginia mess in the last few weeks coin designs are now political issues. It is too bad that the Congress isn't following the 1890 coinage act. We have had the same coin designs to long and it looks like we will have them forever.

CHRIS