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Coin Market During Economic Recession?
C0inCollect0r
Posts: 374 ✭✭
Hi Folks,
I have heard increasing grumbles about a potential recession on the horizon - obviously no one can predict the future but I've heard predictions of a 2019/2020 recession from a large number of smart people.
What would you expect the impact of such a recession to be on the current coin market? Anyone remember much of what happened to the coin market following the Dot com crash or the 08/09 financial crisis? I would expect a significant decline in general, but coin market levels are already quite low so I am not sure if the downside is more limited (we haven't exactly been having a dramatic run up in coin prices, as compared to the stock market, etc)
Any thoughts would be interesting to hear.
2
Comments
The "current coin market" has many segments, and some would not be affected by a recession such as early copper - a large collector base of varying income and wealth levels. The general weakness in recent years is caused by less collector interest in some segments. The coin market was strong through the dot com crash.
Those predictions are always being made, and occasionally those "smart people" are right.
My sense of the 2009-12 period is that more nice collector-grade coins were available than there has been for the last couple of years. I ascribe this to strong hands / weak hands type behavior, where wealth effects due to rising equities and real estate values allowed people to feel more comfortable holding on to their coins.
It's hard to speculate what will happen with prices in the next recession b/c that has a lot to do with economic and fiscal factors that are hard to predict. Heck if you could predict them, get in front of them with real money...
I think bad stock market is good for coin market because people take the money out of stock and put some in coin.
Just about 50% of the time.
The 2008/09 crisis was not a run of the mill recession. It was brutal. I’m not seeing the crazy “tulip bubble” craze that we had back then. Other recessions were a walk in the park to me. Things seem a bit calm to me right now. The stock market is pricy yet orderly as traders are not jumping on each other’s back trying to buy equities. It’s time to get nervous when prices start going straight up. It will be like an elevator. Straight up, straight down.
Colonial coin prices came down a bit during the last recession but if you were able to weather the storm some sweet coins came on the market. Some were once in a generation items. Lousy coins are still lousy. The better coins have recovered nicely.
True collector coins with eye appeal, etc may pull back a bit but they will always be in demand over the long haul. Not sure about the modern MS 68-69 stuff. That could get ugly if a few buyers back off. I don’t know any local dealers that want that material. No way will they pay thousands for a coin that many many millions, or even billions have been struck, especially if you can buy a nice MS 66 or 67 for a relative song.
Don’t listen to that nonsense about a recession coming or going. It’s like saying that an earthquake is coming. Of course it’s coming but you just don’t know when. Usually the government says that we are into a recession six months after it has begun. You can miss a lot of opportunities if you stay on the sidelines expecting the worst and the worst doesn’t happen.
It depends on how the upper income segment is affected. They seem to make up most of the coin market today.
No need to man the lifeboats just yet...
As the majority of Americans have been anticipating this for 1 year, 202 days, 1 hour, 31 minutes, and 16 seconds.
Coins are a form/ portion of the antiques market. Numismatic coins are not especially an "economic" or "investment" product. Being part of the antiques market, one should watch whether or not large groups of productive people have increasing or decreasing amounts of discretionary income, and then watch for/ measure the apparent willingness or unwillingness of those people to spend on what is, in fact, something that is not a necessity of life.
Most people are first successful at something else in economic life, and then they bring/turn some of their surplus into coins. If there is not a lot of discretionary money floating around, coins lag.
Market will chug along.
I also don't buy a recession is coming. I see that as left leaning people hoping for a recession.
Predictions are often wrong... seems more often wrong than right. Business in general seems to be doing very well at this time. The stock market seems moderately positive. I would be more concerned if we had something like the dot.com boom going on... Cheers, RickO
if it gets bad enough, I'll be the guy sauntering through the wasteland with a sawed off shotgun and a backpack full of Hansen-pedigree proof gold - if you're around, stop me and say "hi"