Is the "Wealth Effect" from Metals About to Push Clad Higher?
cladking
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Everyone thought that in '79 the market soared because of metals but all these coins that were popular before the increase enjoyed the largest gains.
Perhaps this time people feeling wealthier is going to push up moderns and things like silver eagles.
This could be a major shot in the arm for the entire hobby at the same time its popularity is exploding everywhere.
Tempus fugit.
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Likely modern coins will get a boost, but the rare stuff will get a bigger boost IMO. Bullion prices will continue to rise and may result in a lot more melting of the stuff like silver eagles so could help those that survive. Edit, but the clad proof sets and such will likely remain in the basement since they have no significant melt value.
Yes. this is the common wisdom. Only rare coins of recognized series can get a boost from new collectors, maturing of the collector base, and more money in the hands of collectors or prospective collectors.
Certainly the only constant in the last 70 years is old US rare coins in high grades do better than anything else.
I am merely suggesting that more money in the hands of collectors will buy what is hot and what's hot right now is moderns.
If silver eagles get more premium it would mean fewer being melted rather than more.
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I guess we'll just have to wait and see.
Well if the 10 year state quarter program didn't do the trick, why think it will do anything now?
"Got a flaming heart, can't get my fill"
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"Coin collecting for outcasts..."
For point one, it seems like the answer is no. Those at the top have more money (including dealers who sat on their gold while metals were lower) but those people already had the resources to buy if they saw something they wanted. The average collector has to deal with rising food, housing, utility, and transportation costs. They also hold a smaller share of the metals so even a big increase isn’t significant enough to offset the other costs they have.
That program added many new collectors and I don’t think there has been anything to match that since. I guess we can argue that social media has helped (IG, YouTube, forums) but I’m not sure all of those have had the same impact as the initial bump from the State Quarters.
Yes, but where are the new collectors now? I'd say they abandoned fully joining the hobby and there are a lot of folder sitting in storage unloved.
"Got a flaming heart, can't get my fill"
I am curious why you think people on average are feeling wealthier? We are going thru one of the worst inflationary periods since the Carter admin. Sure there are plenty of wealthy people, many of whom are not collectors, but many average people are grappling with the decision to pay the rent or buy food. And considering that clad coinage has only base metals I see no correlation between the recent rise in prices of gold and silver to clad coinage.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
Coin collectors tend to have silver and gold. They will feel wealthier and buy more coins. The general public will just buy more refrigerators that don't last five years any longer.
Perhaps not so much yet but most have collections whose value is increasing significantly and if metals continue higher this can become even more important.
It's hard to see because supply still swamps demand but mint sets have doubled in the last few years and buyers are still buying. Few people have any idea how scarce many moderns are. It's not just things like nice chBU '69 quarters but world coins with mintages in the hundreds and list for a dollar. With the millions of new collectors here and abroad I would expect to see continuing increasing demand. Success breeds success and if prices of metals continue to escalate as demand is already ratcheting higher it might well create some surprises.
I understand the question, but the "wealth effect" 99% of the time is referring to real estate, since most U.S household wealth is tied into home equity value.
If home values are rising (or the stock market), people will spend more. This is such a well known phenomenon the Federal Reserve actively tracks shelter/housing data.
The Federal Reserve is trying to squash inflation, the one tool they have is by raising interest rates.
High interest rates causes borrowing cost to rise, higher borrowing cost means less spending, less spending means lower prices.
Lower end coins will take a hit to less discretionary spending. Higher end coins will always have demand since someone buying an expensive coin probably isn't worried about inflation or is price constrained.
I think you are correct-there was much fanfare at the start and it gradually dissipated as people lost interest or moved on to something else. The period between 1999-2000 was likely a peak for new collectors and I’m not sure if we have seen another like that. And I would imagine only a fraction of those new collectors remain in the game today. We have heard stories of people picking up the hobby again in 2020 but those numbers aren’t huge either.
You're never going to make "clad" happen.
You’re like a broken record with the “scarce high-grade moderns.”
Most collectors don’t really care. They just gravitate to bullion issues instead.
As for metal prices affecting my collection/collecting. They don’t. Numismatic value is way higher than metal value in nearly 100% of my collection.
I tried to think of a reason why the market for clad coins would catch fire. I couldn't think of one.
Perhaps not. But there are still a great number of highly desirable modern coins made in this country and many others that have very very weak demand. This might continue for some or most of these indefinitely but it "can't" continue for all of them.
Ok sure I could buy that, but those same collectors have not bought into your argument for clad in the past when metals have spiked so why would you think that rising metal values would cause a shift into clad now? The collectors that can have significant gold and silver holdings have no incentive to jump into clad. The people that are more likely to collect clad are the less wealthy individuals, but they are also the segment most affected by rising inflation. Monies for discretional spending for the collectors of clad is already tight, and getting tighter, if anything I see the clad market falling or at best rising but at a much slower/lower rate than classic coinage.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
Yes, of course. But everyone isn't collecting rare old US coins in high grade. Some people have XF/ AU Franklin half dollars or rolls of 90% BU quarters. They have things like world silver type collections and world gold coins from the last few centuries.
Obviously it doesn't apply to 1804 dollars or 1894-S dimes.
You're telling me!!!
There are hoards of people who don't care.
But the point here isn't (really) that people must care or should car, or even might care but rather; "what will those collectors do who have significant profits in metals if they materialize?". My observation from 1979 is that most of the new money coming in the hobby went into coins that were already hot. Now days Walkers, Morgans, and standing liberty quarters are not as hot as they were in 1979 so the money will go elsewhere. As you just suggested, most of the individuals with significant profits don't own rare old US coins so even though they are hot there will be relatively little money flowing that way. It's probably going to go into things with which they are more familiar and are already hot.
I'm really not talking about clad (necessarily). Look at the first post. I'm talking about moderns and all the stuff that is hot now.
Clad would capture some of any improvement in moderns.
Is the "Wealth Effect" from Metals About to Push Clad Higher?
Probably not. Why?
I have had a want list of literally HUNDREDS OF THOUSANDS OF DOLLARS of 1965-date clad coinage (and 40% silver/60% clad coinage) consistently for the past few years. During low priced spot gold times and record high spot gold times. The demand is there. The coins simply are not. But not from lack of trying- I submitted about 600 more attempts for the “holy grail” just this afternoon that took us weeks to screen down from thousands of coins down to these 600 candidates.
Wondercoin.
I would take the news from retail dealers and local coin show dealers as a big indicator, and what I hear is that most of their sales is bullion coins/bars but that the regular trade is doing okay.
Nobody can give away clad unc and proof sets that don't have something special about them, which is darned few. I recently sold a huge box of clad mint sets after checking for anything of value to a dealer for face plus 5¢ a set just to get them out of my way in getting to the safe where real collectables are kept.
Eh, I don't know. I tend to agree but I also imagine no one in 1958 thought Franklins would be a thing, let alone 5 figure FBL coins.
At some point I think we'll see a "classic clad" market separate from "modern clad". Something like the 1965-1998 which is the pre state quarter, golden dollar era. Or maybe the cut off will be a bit earlier like 1965-1991, pre spaghetti hair and pre silver proof era. The 1965-1980 clad era does interest me a little, since those were the coins of my childhood. I remember getting the new bicentennial coins at the bank. Everything becomes old and interesting some point.
I doubt it. Clad is clad and has little intrinsic value compared to "real coins" with silver and gold content.
As precious metals markets increase, I believe clad will be left behind.
Just my two cents.
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
My digital cameo album 1950-64 Cameos - take a look!
No- many see them as junk.
There are many clad dates and mintmarks that are scarce in high grade, but I can think of at least four things that might prevent clad coins from "catching fire" as collectibles:
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I believe there is a difference between “ feeling wealthier” and truly “ being wealthier.” I don’t know how I could respond to your question without boring everyone to death here. No disrespect meant.
Outside of grade rarities... there will never be the attraction.
All the fun is making them... then the sheer terror of selling them before another is made and you lose $$$
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Here's an easy way for clad to catch fire: reissue classic coin designs in clad and only clad with no silver version, therefore getting more people interested into series but making the original series more expensive which creates more demand for clad. A good series to do this with would be the seated liberty series. Get congress to pass a law to have a clad seated liberty quarter, half dollar and dollar (clad like the eisenhower dollar) as a small series between 2038 and 2041, this way you commemorate the 200th anniversary of the seated liberty coinage beginning in 2038 (quarter), 2039 (half), 2040 (dollar) and the 150th anniversary of the ending of the seated liberty design (quarter and half). 1838-2038 and 1891-2041 are the perfect start and end dates for such a short circulating series in clad only no silver. In 2042 you have the 150th anniversary of the barber series so you can have a one year type barber quarter and half. Given the 5 quarters a year many want to return to a static design for a bit anyways.
For me no interest in clad coins and would say that applies to most other Mkt players as well.
I see the prices of modern clad. Demand and prices make little sense. I buy cheap stuff because of my lack of levitation in the area of finer stuff. Brokedicks like me do not push the demand enough to keep the prices higher.
One week an MS 67 1969 D sells for $35.00 and the next week one goes for $135.00, slab differences aside.
No one here is wrong entirely. A rising tide lifts all boats (but it ebbs six hours later).
Thanks cladking for suggesting some insight as to the future interest and increase values of modern collector coins. The newer, younger coin collectors did not experience the days of silver US coins in circulation. IMO, the newer collectors may very well care more about completing a series of modern coins from circulation, from the US Mint or coin dealers and Ebay.
Read my article that was printed in the ANA’s “The Numismatist” April, 2024 Pages 24-25. It concentrates of the rarity of the coins minted in 2004 Denver Mint that were die manipulated varieties that are low mintage and part of US Mint History.
The main issue I see with this scenario is how three current trends will lead to changes in spending habits between now and 2038.
Given the ongoing debasement of the dollar, all currently circulating U.S. coins will be near-worthless by that date. Today's quarter is the highest denomination in everyday use, and it already has less purchasing power than a single cent in 1913.
Another factor to consider is that people have many more choices of how to spend their spare time than they did when coin collecting was at its its peak popularity in the 1960's. Social media and video games come immediately to mind, and by 2038 virtual reality might be inexpensive and popular.
Yet another trend is the increasing convenience and widespread adoption of non-cash forms of payment, such as credit/debit cards and mobile phones. Fifteen years from now, few people will feel a need to carry cash (let alone coins) for use in everyday transactions. Of those few, how many will become collectors? And of those who do become collectors, how many will opt to collect high-grade clad coins by series? Very few, I suspect.
My Adolph A. Weinman signature
There isn't anything unusual about the price level for US clad coinage, except maybe versus 1933-1964 US coinage. The latter is an aberration versus all other coinage (US and otherwise), and only a very low pct. have "high" prices either. That's why I've claimed on numerous occasions that most circulating post-1933 US coinage is destined to eventually sell for near or below the cost of grading or nominal premiums to silver spot in grades up to MS-66.
There isn't any reason to expect anyone to use their metal profits to buy high(er) priced clad or US moderns in any higher proportion than they do now. Obviously, non-collectors aren't going to do it because almost none of them are candidates to buy it for "investment". It's not "investment" coinage.
Coin collectors who realize "substantial" profits from gold and silver aren't candidates either, because more affluent buyers don't hardly ever buy US moderns as their primary interest. It's a secondary or sideline collection.
The US Mint reusing classic designs on US circulating coinage won't make collectors like existing US circulating coinage more either, because the metal content isn't the only (or necessarily even primary) reason for its low preference.
It's the collective coin attributes, with the metal content being only one.
@WCC I like your analysis of 1934-64 coinage.
So if the metal content is not the only reason for its low preference, maybe its the designs on the coinage that are also a factor. State Quarters got people into the hobby because of state pride. ATB quarters and American Women quarters do not have the same touch, so we have to try to strike with something else and I think youth sports is not it. I think if people see historical designs they can obtain for cheap in much better condition than the original as seated quarters and halves that are well worn have a hefty premium that junk silver does not, that might help, people always are curious about history. Even if you are right about 1933-1964 coinage, that does not change the fact that clad coins have been collectively let go by the hobby and stimulating interest in them is beneficial.
This thread is about the financial potential, so not commenting on the coin merits as a collectible. That's an individual preference.
The low relative preference is a function of all primary attributes: design, coin size, metal content, and relative scarcity. All US moderns as a series rank very low on most or all of these attributes. It's not a coincidence. It's because collectors bring this perception with them into collecting from the external culture.
If the US Mint did reissue classic designs, it would be hoarded in huge number just like SQ and later US moderns. The design wouldn't be nearly enough to change the economics of this hypothetical coinage and would have zero impact on US moderns generally. It might get more collectors to collect the classic dates of any reissue, which is a lot more important to US coin collecting generically.
@Overdate prior posts describes other cultural reasons. Recreational collecting isn't nearly as competitive for the public's time and money. It's important to many existing collectors because a (potentially) shrinking collector base has negative ramifications for future resale value, but the fact is that in the internet age, new collectors don't need to start with circulating change, and I'd guess that most above minimal budgets bypass it almost completely, aside from maybe buying proof sets.
I don’t know a single person feeling even close to “wealthier” right now. In fact, the complete opposite, regardless of any contributing factor(s).
I believe the coin market is showing this already and is undergoing an economic adaptation - NOT a correction. If I put on my fortune teller hat, I’d wager the coin market is going to drop, across most types/series, before too long.
Having fun while switching things up and focusing on a next level PCGS slabbed 1950+ type set, while still looking for great examples for the 7070.
I think this is the key statement regarding clad in general. I used to feel that way, but have had a change of heart while working on a type set. They can be exceptionally challenging and still rather affordable in condition rarity. But for how long are they that?
There’s a lot of fear that pops can shift on a dime. But, in a couple decades has that really happened? What would cause increases in subs to inflate the pops? Higher value of course. So it’s a double edged sword.
My biggest bug with clad is that it will so often tone ugly. It’s just not nearly as stable as silver seems to be.
Having fun while switching things up and focusing on a next level PCGS slabbed 1950+ type set, while still looking for great examples for the 7070.
Errors will have some value, other than that I am not very interested in clad coins.
This thread really wasn't intended to be about the collectability (or uncollectability) of clad coins. I think everyone knows my position on the topic. Perhaps I jumped the gun a little since silver nor gold have increased enough yet to generate a lot of wealth effect except on some dealers who specialize in the sale and purchase of large amounts of metal. Prices may never get high enough to affect the average collector. "50" 1979 dollars for silver was a great deal higher than "28" 2024 dollars due to government spending and inflation.
My question is more about where will windfall profits go if they do materialize and where are they going now as metals increase. It certainly seems to be no stretch to say a disproportionate share of these dollars will go into everything that is currently hot and moderns are among the hottest coins at THIS time.
As far as the potential of clad coins people still seem to be missing my point.
What I've been trying to say all these years is despite the action of pop tops the fact is the rapidly dwindling number of mint sets is virtually the entire supply of nice attractive clad coins. While these mint sets still swamp the demand the fact is they were produced in finite numbers and can not forever supply the increasing demand. Only about half of the mint set coins can be considered nice chBU so when this supply is exhausted there is simply no other effect than higher prices. These prices can be significantly higher because this is a unique situation; it's a collectable (or uncollectable) with no base. There are no old collections of coins that will be coming into coin shops because o higher prices. There are no BU rolls to tap and there were not even one coin in ten could be considered nice chBU.
People are fixated either on the top end because of the very limited demand of registry participants or on the vast hoards of coins they imagine must exist for the coins to be so "worthless". I'm talking about what's in between and is in dwindling supply in a consumer society. When the demand outstrips the supply there will be an explosion whether silver is selling for $75 an ounce or $5 an ounce.
This thread is an attempt to suggest that the metals price increase could trigger this explosion. A broken record doesn't need to be right twice per day, just once in a lifetime.
I guess this doesn't apply to a 1909-S VDB cent despite the act that it's just junk metal, small, low denomination, a president coin, and was saved in far larger numbers than a 1982 quarter.
One staggers at the implications of a market that tell the difference between a rare and desirable coin and common junk in the complete absence of a market!
Do you really believe this be true, Cladking?
I dont see it.
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
I'll watch for the article.
People are collecting these coins. What some don't realize is that these coins have virtually disappeared from circulation in some cases. Sure you can probably find a complete set of quarters in just four or five boxes but some of the dates will all be culls and/or very low grade. You'll need four or five 1971 quarters to find one that is not cull.
I believe all moderns have a very bright future though it may be some time yet before that begins. Great coins always attract great collectors in the long term. There's no reason to believe clad is any different.
Concur; coins will go the way of stamps but it will take longer because there are still gold and silver coins to buy and collect. Occasionally silver coins can be found in rolls, change, or Coinstar machines whereas a similar paradigm for stamps no longer exists.
I doubt this is as true for coin collectors.
The mint set market is finally firming at the new much higher prices.
This also means that there is a new higher floor under the prices of the individual coins.
I don't see many fireworks yet except for the scarcities like chBU and MS-64 '82 and '83 coins which are trading at many multiples of Greysheet and retail sales of BU rolls which are going crazy.
I believe these are the canaries in the coal mine. Eventually the markets will become mature enough that real pricing is established and this will mark the beginning of the real emergence of clad. As long as guides list these coins at prices that are simply wrong the markets will be stymied. But every year the guides get better and the market stronger despite the fact demand is dwarfed by the supply of mint sets.
With so few mint sets surviving it just can't take much to upend the markets.
How many people are out actively searching sets at shows?
Can @wondercoin or @cladking answer to what extent the pop reports have changed over past decade?
How often does a dealer even rotate his stock of mint and proof sets from show to show?
At shows, I am probably the only guy looking thru sets.
I see alot of nice coins that fall a point shy of being slab worthy.
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Since a follis of Constantine (ca. 300 A.D.) can still be had for $10, I'm not sure I can afford to wait