The US coin market during a recession and inflation
Coin Finder
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Where is the US coin market headed? Will prices continue to rise or slow down. I cannot remember what happened in 2007/8. What do you think the future is? Will the PCGS turn around times improve? Inquiring minds would love to know!
Your thoughts welcome....
Please keep politics at a minimum and focus on the coin market.
I think it may remain strong, there is a lot of great coins out there and maybe a few coins in strong hands may come out of hiding!
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07/08 was down. However that was part of a secular trend. It remains unknown whether we are in a secular trend upwards or a bubble. If it is a bubble, it will correct down in a hurry as the Fed is actively popping bubbles.
My crystal ball remains broken.
We have not really had inflation like this since Jimmy Carter was president so it seems that there isn’t good data that combines a big run up in coins followed on the heels of big inflation…..
For what it is worth on what was going on around 2007.
https://youtube.com/watch?v=wwmUMvhy-lY - Pink Me And Bobby McGee
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https://youtube.com/watch?v=D0FPxuQv2ns - Ruby Starr (from 'Go Jim Dandy') Maybe I'm Amazed
RLJ 1958 - 2023
https://goldprice.org/gold-price-history.html
Random thoughts... IMO
Inflation is simply too much money chasing too few goods. Too much money created
1)Gov't spending programs. Pandemic spending needed went on too long.
2)Russia Ukraine war
3)Fed flooding system with money ..far too long
Everyone is to blame
Remedy... Fed sells bonds they hold. Too slow?
Higher interest rates. Thus high unemployment lower consumer spending.
Did everyone contribute to an inflationary psychology, for too long, that will be tougher too overcome. Yep.
Will the FEd back off too soon (when they see the first sign of any discomfort) in their fight, as no one seems to have the resolve that we had 40 years ago. In this scenario... prices fall back somewhat but the trend of each boom/bust cycle will ultimately lead to greater inflation in the next cycle? Unless... we have a financial accident along the way, Not going there.
My point... each cycle had a different cause and those in power will react differently to the problem. So how will this scenario affect the coin market? Depends on how much resolve everyone has? More subsidized inflation ..prob good for coins. Also depends on the LT interest in coins?
Too many variables... statistically you can assign probabilities
What I really know is that everyone lies to you (credit to DR HOuse).
There are a number of 50+ people inheriting large amounts of spendable cash. That is the prime demographic of a collector.
The competition for the top coins is fierce. I don’t think inflation has an affect on coins. Spending more on gas and food is not going to stop someone from buying a $25,000-$50,000 gold coin.
If I am wrong, great. I’m in the market for nice coins and could use a drop in prices.
Successful BST with drddm, BustDMs, Pnies20, lkeigwin, pursuitofliberty, Bullsitter, felinfoel, SPalladino
$5 Type Set https://www.pcgs.com/setregistry/u-s-coins/type-sets/half-eagle-type-set-circulation-strikes-1795-1929/album/344192
CBH Set https://www.pcgs.com/setregistry/everyman-collections/everyman-half-dollars/everyman-capped-bust-half-dollars-1807-1839/album/345572
Wow, that gold price chart looks very good. Looks like it will break out soon
There has been a tsunami of money poured into the economy. Anything you had in savings a year ago is now worth upwards of 9% less, and you've made virtually nothing in the way of interest on it. Safe havens where something can reasonably be hoped to hold its value are much sought after. Prices for top quality coins reflect their attractiveness as stores of value. We're in a classic hyperinflation situation, too much money chasing too few goods. Buckle up.
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't no optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
We didn’t have double digit inflation going on…..
Coin values tend to go lower during recessions.
Inflation guarantees each dollar of recovery will lose purchasing power and have even less buying power.
It is a lose-lose situation.
Edited: My comments apply to numismatic value and not bullion value. Gold and silver may increase but this should be inconsequential to all but the most common collector coins (low grade common date Mercury Dimes, Morgan Dollars, etc.).
People are going to become more selective on what they buy. The question is: where will collector coins (not bullion) fall on their list of priorities? If the stock market tanks the wealthy will be affected and the sky high prices for trophy level coins may cool. Common "stuff" is likely to take a beating as it will rank low on the list of priorities.
Do items like collector coins (not bullion) with their high markups really make sense as an inflation hedge?
Okay but I was responding to the OP which said:
I cannot remember what happened in 2007/8.
https://youtube.com/watch?v=wwmUMvhy-lY - Pink Me And Bobby McGee
.
https://youtube.com/watch?v=D0FPxuQv2ns - Ruby Starr (from 'Go Jim Dandy') Maybe I'm Amazed
RLJ 1958 - 2023
That is one tiny sliver of the coin market.
I thought about that after I posted. I would be willing to bet the $5,000-15,000 market is also made up of people not missing any meals because of gas and food prices. At $5,000 you are talking about many Double Eagles. It is obvious that inflation has not slowed the coin market. Check out how fast newps disappear from Dealers sites.
Successful BST with drddm, BustDMs, Pnies20, lkeigwin, pursuitofliberty, Bullsitter, felinfoel, SPalladino
$5 Type Set https://www.pcgs.com/setregistry/u-s-coins/type-sets/half-eagle-type-set-circulation-strikes-1795-1929/album/344192
CBH Set https://www.pcgs.com/setregistry/everyman-collections/everyman-half-dollars/everyman-capped-bust-half-dollars-1807-1839/album/345572
Wages are not keeping up with inflation so after paying for the necessities such as food, fuel, housing, car payments, etc the remaining disposable income will shrink meaning there will be less money left over for luxury items such as coins.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Agree with most except the hyperinflation characterization. It can be much worse.
Free money has fueled the economy for years
300 billion less a year for the last 3 years in oil exploration
Biodiesel mandates and new facilities that can take the entire US soybean crop. Brazil and South Americas crop has had horrible weather.
10% of the worlds edible oils and 30% of wheat come from Russia/Ukraine.
China is rebuilding their protein stock after swine flu with US corn still the cheapest source.
Watch fertilizer… that one is scary. Huge amount of the worlds fertilizer comes from Russia.
The theme for the next year or so will be demand destruction vs supply creation to stop inflation.
Latin American Collection
But the bulk of the coin market is under $1000. You will see an effect there.
I think if asset values compress, the coin market can still be a store of value and attract investment dollars to weather a storm.
Compared to the other alternatives rare coins stack up favorably as a collectible that is highly liquid and potentially appreciating in value.
That PCGS3000 chart is a little misleading.
It doesn't show the percentage gain. From 1970 to 1979 - 1,000 to 40,000 - 40 X appreciation.
The percentage gain from 1982 to 1989 - 25,000 to 180,000 - 7.2 X appreciation.
The percentage gain from 1994 to 2022 - 50,000 to 70,000 - 1.4 X appreciation.
Baby boomers were starting to be an economic force in the 1970s.
Just looked up a few PCGS certificate numbers of a some trade dollars that I have and was surprised that the PCGS values seems to have jumped quite a bit from what it was at the start of this year.
Am pretty sure that the current value of the dollar probably had some hand in it apart from the other logistics input.
https://www.pcgs.com/setregistry/u-s-coins/quarters/PCGS-2020-quarter-quest/album/247091
The real (main part) coin / currency market is material under $1000. Most people cannot afford material above that nor care to spend that on coins. Coins are not competitive with vacation, entertainment, sports, strip clubbing. I have been amazed from threads in here how somebody would pay $11k for a $3k coin bc of the sticker. Do you know how rare those people are? Of course that’s a win for the auc house, seller.
The current market will fall if times get tough IMV as far as numismatic value, certainly generics. Many were burned in the 1989 crash and never returned. I am concerned that will repeat again. For most real wages are not keeping up with inflation (higher auto, home prices). Others have been disenfranchised by corp downsizing, ageism, and technology. I just dont see people spending a lot of money for coins down the road, especially big ticket items. It may be already starting as have started winning AS auctions on the bay again.
Currently we are in a proxy war with Russia. There is no end in sight, Russia will not back down and their goal may be take back all former Soviet States. Read article how their getting gold for their oil is positive for them, negative for the west. Will gold go up?
But the people who have disposable income will be more likely to buy gold and other “things” that they think will keep up with inflation. We saw this in the late 1970s.
I might be sitting on a deck chair of the financial Titanic, but I am holding on to my coins, stocks and bonds. My investment income is still okay, and I confess to making a couple of overpriced coin purchases. The latest have been the Negro Leagues commemorative coins and the first British gold sovereign from 1817.
I have nearly all of the modern U.S. gold commemorative coins. Fortunately I bought a lot of them when gold was a fraction of what it is right now. I paid pretty close to melt for some of them. So I view them as “an investment in gold.”
Agree for the most part. However, many serious coin collectors of modest means make their coin collection a major part of their "savings". If they get laid off, they may have to dip into their "savings" to make ends meet.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
There is - IMO - a very good chance that an economic earthquake may be imminent. It appears to be the perfect geo-storm brewing. Russia, war, inflation etc., all coming together. I cannot pretend to see the future, but from my perspective, it does not look good. Fasten your financial seat belts, the monetary road ahead is not paved, not even trail broken. Cheers, RickO
The instability created by the war in Ukraine makes future predictions of economic events difficult. However, the war in Ukraine may have also lessened the chances of a Chinese invasion of Taiwan. Does China want an invasion fiasco similar to what has happened to Russia in Ukraine? Taiwan has been preparing for an invasion for the past 70+ years and has a huge reserve military force.
In the world of finance collectibles such as numismatic coins are of little importance. They may make headlines when rare, popular items sell for millions but even those amounts are a drop in the bucket when compared to the financial world as a whole.
The richest people in the world could probably purchase the entire available supply of numismatic coins and still have many, many billions of dollars left. I wouldn't hold my breath waiting for any of them to make that purchase.
If there is a financial crisis in the near future I would not be wanting to hold "investments" such as numismatic coins or other collectibles that can quickly lose their liquidity.
Agreed. "Collectibles" are not "stores of value". By definition, they are a discretionary purchase.
It is also worth considering to what extent the recent run up in prices is a bubble. The Fed is popping bubbles, gold down another $25 today. If they pop the collectible bubble, you'll at least be down to 2019 levels if not 2007 levels.
Fortunately, I value my collectibles at zero... not as an investment or store of value
Collectibles and gold and silver are and have always been generally perceived as a store of value.
People with disposable income will be (1) paying off high interest cc debt (2) investing in stocks and bonds (3) plus spending their money on dining, entertainment, lifestyle activities. Some may have a gold or silver position (bullion coins).
Gold and silver, yes. Collectibles? Not so much. They are used as speculative hard assets but not exactly a "store of value" in the way that builion is perceived.
With higher prices, I have less income to pump into my coin collection. However, I could see some buyers more willing to buy coins and get their money into something other than real estate or equities as a store of value. I believe the last 2 years of price strength was aided by a renewal in collecting interest and to a lesser extent the strength of the stock market.
2010-2020 was a decade of major macroeconomic prosperity and coin prices were fairly stable and often decreasing. I can't imagine an unprosperous period leading to a long-term increase in prices (beyond inflation). 2010-2020 was close to a best case scenario in terms of macroeconomic drivers. I expect the market to be somewhat anemic over the long-term, with periodic bursts of life like we have been seeing now.
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"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
No one has ever expected to be able to exchange at any point in the future x number of Beanie Babies for a nice suit of clothes, but for a very long period of time it was possible to exchange an ounce of gold. To bring this back to coins, how many 1971 proof sets in OGP would you expect to exchange for a steak today? In five years? In ten years? If you don't have a clue, or even if the number is very different, then 1971 proof sets aren't a store of value.
BTW, this is the same reason Bitcoin can' seriously be considered a "currency" of any kind, though I suppose it can be considered an "investment", though I would consider it, and its cousins, a speculation. Perhaps this second paragraph is off=topic.
If it is anything like I remember about the coin market downturn back around 1989, the U.S. coin market could get very weak. The coin market for common collector coins back then remained very weak for many years. The coin market seems to have up and down cycles. The down cycles sometimes lasting a very long time.
I think we are in uncharted territories when it comes to this economy. I think when all the bubbles start to pop, and discretionary income gets eaten up by inflation, common date collectible coins will come crashing down in value.
I think that cash, gold and silver bullion, would be much better to hold than common collectibles.
I would say as a general rule of thumb, a collector would assume and perceive his or her collection would hold value over time. Regardless of whether disposable or discretionary funds. But there are those that either do not care or assume their holdings may or will drop in value. They would be in the minority for the most part as far as numismatics are concerned.