What if..................
keets
Posts: 25,351 ✭✭✭✭✭
What if there were a steep and sustained increase in the price of Gold/Silver?? What if it only reached the highwater-mark of 1980 but held for a period long enough to actually see the melting of all the Gold/Silver coins that would most certainly be taken to the buyers??
I've always been amused at the way the advent of TPG's changed how the average collector viewed scarcity and actual rarity. The old way is what I like to term "RedBook Collecting" because it seemed in the 60's when I entered the hobby that a coins value and scarcity was determined by it's total mintage. Today it seems more determined by it's grade availability. With my imagined scenario, I envision a mating of the two!!!!!!
It's already no more than an (un)educated guess to state the true extant numbers of many, many issues. A large bullion stimulated melt-off would really glean the remaining stocks of even the lowest graded and most readily available coins. Moderns would probably benefit the most for the exact reason they are so maligned by many. The real kicker, as I see it, is that this would be an artificially manipulated increase of rare coin prices---and indeed of rare coins themselves!!!---by persons who aren't even involved in the rare coin business and likely wouldn't even know what they're doing. We reap all the reward, is that great or what??
But man, would it be tough to decide what to do!!! Sell because i can get $40 on the dollar?? Wait because maybe I'll end up with a better date after the dust settles?? WOWZER!!!!! Imagine all the Morgan Bullion that would disappear, it's staggering. All those G-VF coins worth about $8-$10 could suddenly rise quickly and it's almost a foregone conclusion that they'd find themselves as a glob of metal. All the "old coins" in dresser drawers worth $10-$20 would be history to say nothing for the aforementioned Roosevelts/Washingtons/Franklins/Kennedys.
Whaddaya think about this fantasy?? Would you do a wholesale dump or would you be selective and speculate with some coins??
Al H.
I've always been amused at the way the advent of TPG's changed how the average collector viewed scarcity and actual rarity. The old way is what I like to term "RedBook Collecting" because it seemed in the 60's when I entered the hobby that a coins value and scarcity was determined by it's total mintage. Today it seems more determined by it's grade availability. With my imagined scenario, I envision a mating of the two!!!!!!
It's already no more than an (un)educated guess to state the true extant numbers of many, many issues. A large bullion stimulated melt-off would really glean the remaining stocks of even the lowest graded and most readily available coins. Moderns would probably benefit the most for the exact reason they are so maligned by many. The real kicker, as I see it, is that this would be an artificially manipulated increase of rare coin prices---and indeed of rare coins themselves!!!---by persons who aren't even involved in the rare coin business and likely wouldn't even know what they're doing. We reap all the reward, is that great or what??
But man, would it be tough to decide what to do!!! Sell because i can get $40 on the dollar?? Wait because maybe I'll end up with a better date after the dust settles?? WOWZER!!!!! Imagine all the Morgan Bullion that would disappear, it's staggering. All those G-VF coins worth about $8-$10 could suddenly rise quickly and it's almost a foregone conclusion that they'd find themselves as a glob of metal. All the "old coins" in dresser drawers worth $10-$20 would be history to say nothing for the aforementioned Roosevelts/Washingtons/Franklins/Kennedys.
Whaddaya think about this fantasy?? Would you do a wholesale dump or would you be selective and speculate with some coins??
Al H.
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Comments
Example: Just last week I listed a lot of (4) nice Ms Roosies, all coins were Ms-65FB or better on E-bay,(40's/50's) they sold for something like 13.00, thats it. If I could have melted them at 4.00 a coin instead, they would have went as bullion. I would have been better off. The buyer on this lot got a real deal as some of these dimes will easily holder and sell for $30. But I only paid 4.2 face for them so I made a buck or two. Point I am making is, back to conder's point, some really nice choice material, that isnt necessarily worth a bunch as a "raw coin" would get removed from the market and lost as bullion if this were to happen.
jim
Knowledge is the enemy of fear
Coins made in the hundreds of million still wouldn't become scarce though. There are many
reasons from the simple fact that the coins will literally come out of the floorboards to the sim-
ple fact that coins would remain a convenient way to own silver. Additionally if enough started
to disappear to affect prices then the rising prices would cause the coins to be set aside when
they exceeded melt value.
All of the coins made scarce or rare by melting over the last half century have been base metal
coins. These were usually coins that people ignored and didn't miss when they were recalled
and melted.
Certainly there were a few dates probably affected by the 1980 run-up and it would be much
more dramatic if the price stayed high. Coins which had only a little more melt value than numis-
matic value and were already underappreciated were most affected. Things like VF '40-D quart-
ers were melted in significant numbers compared to the number available. Very large numbers
of BU 40% halfs were also melted. These were considered common so lots were destroyed.
Today, of course, such a scenario would be far different. Back in 1980 everyone had lots of me-
tal and dealers bought it from collectors and the public in great quantity. Much of this is gone
forever and the silver this time would be things like Washington commems and even 1992-S
silver halfs and quarters.
It would certainly be interesting.
Clad.
Jim
Seem's like the Hunt Brothers are a dead issue.... However for what it's worth, I like my father believe that silver will do it again and snagging up what you can buy of 90% or Pre-64 bags of 1000.00 face is still worth having. Especially if you have time to glance through it and pick out the good stuff, (Errors and Higher grades). I know a guy that used to go around hospitals and buy 55 gal. drums of X-rays and take them out and burn them to collect the silver that was left at the bottom. I'm sure of this, I saw a great many people slapping down good silver coins at $40.00 an ounce. Even i dropped about 10 very worn and slick Morgans and peace dollars and turned around and used the cash to buy higher grade stuff people were fixing to send to the smelting pot. We lost a great deal of coins during that time. And as history does have a tendency to repeat itself, as alway's look before you leap.
"Those who don't remember the past, Are condemned to repeat it"
Checked for spelling and punctuation...............NOT......
I don't believe that happened in 1980 as we didn't stay at $850 long enough for that to occur. But next time around it could certainly happen.
More than likely, any spiking of silver to $50+ and gold to $850+ would not last that long before speculation ran it straight up and then straight down again. You might not have very long to cash in your coins.
Actually, a lessening in supply might actually help the hobby. There is way too much of the lower end stuff around as it is. If half of it went away, I doubt prices would change by much.
roadrunner
Wholesale dump.
Clad >>
So they go to the bank and search rolls. What do they do next week? Sure they might try upgrading for a little while but I think the interest in the hobby would fade VERY quickly.
Darkside. LOL
Jim
hey roadrunner
that's why my scenario had the price staying up for awhile, to give some time for the bought coins to actually be melted. when the Hunt's ran things up it was so short lived that some got stuck with a lot of silver coins. and Mike, there are always areas to collect in for kids. cents and clad would be a fun challenge at face value. just because there's no precious metal involved, do you really think kids wouldn't collect??
al h.
<< <i>Darkside >>
If they are lucky.
Yes, for young collectors. I think they would do the clads fairly quickly, and the Memorial cents. Jeffersons might give them a challenge from pocket change or rolls because the older material DOES show up but slowly. Possibly at a rapid enough pace to hold interest. But for most youngsters anything before 1964 would be priced out of reach, Today, even though those coins still have to be purchased, they are still within the reach of their pocketbooks. With silver at $40 ot $50 and oz they probably won't be. Unless they moved to the darside, i'm afraid most would lose interest. Hey back in 1979 and 80 when silver went up like it did, a lot of ESTABLISHED collectors quit the hobby. If it did it again I think it would happen again. An if established collectors are quitting, I doubt if many young people would be STARTING.
Hey how many here STARTED collecting in late 79 early 80 when silver was over $30?
I offered my dealer another method of pricing coins with bullion value...melt + rarity=value. Seems simple enough. An example would be $5 common indian vf-xf is $100 for melt plus $50-$80 for rarity so that coin should be worth $150-$180 for rarity or so instead of the $230-$250 every one is trying to get for them, they just aren't that rare in that condition and their numismatic value is mostly in the seller's eye. It takes a lot of guess work and mystery out of the deal. A ms 64 common $20 Saint with high certified populations would go for $400 for bullion + $300 for rarity/numismatic value, not $850. It would make the buyer ask himself if that coin was worth $300 or $450, kind of narrows the range a little. I'm still thinking about the implications of this but it would reflect bullion prices better and would take a lot of the boogie woogie out of coin dealing, at least it would narrow the areas of dissention down a little. It would most certainly make the buyer consider if the rarity of the coin warranted such a premium over melt. He would have to ask himself the question, "Why am I paying this much of a premium for air."
Wouldn't it be nice to be holding a couple of rolls of f-vf $5 gold that you got into for $150 if it shot up to $800...yummmm, especially if you got them for bullion plus a premium for numismatic value instead of some percieved rarity. Another great melt down would probably favor sparing the slabbed material with gold or silver content from the great melting pot...food for thought.
<< <i>[Q"Now silver was only up there briefly, but if it was to stay there much of the common silver would eventually get scrapped. So where do the young collectors start? "
Clad >>
So they go to the bank and search rolls. What do they do next week? Sure they might try upgrading for a little while but I think the interest in the hobby would fade VERY quickly. >>
A collection of regular issue clad quarters from circulation isn't going to keep an
advanced collector interested for very long probably. Oh sure, if you like VF and
better coins that were well struck or at least have the major detail then such a
set can take years to assemble. One only has to look at about 1,200 dimes to
make a complete collection of the regular issues and about 1,000 quarters for a
whole set. VF and better dimes will take about 25,000 coins and VF and better
quarters are about the same.
If you think about it though this is really much better than what got our generation
hooked on coins. Back in 1960 there were not any of the real key dates in circula-
tion because they had all been removed years before. While it was theoretically
possible to get an '09-S vdb in pocket change in actuality as far back as 1945 The
Numismatist reported only one coin in 45,000 was this rarity. By 1960 these were
long gone and collectors were forced to deal with the idea they couldn't even com-
plete their sets. Worse yet is that the '09-S vdb's hadn't been lost and destroyed,
they had been removed from circulation in high grade or intercepted even before they
got to circulation. This meant that the coins existed but were prohibitively expensive.
It also implied that anything of actual value had also already been found and removed.
All the coins in circulation had been screened repeatedly by large numbers of collectors
and anything of real value was gone.
Today it is far different. People ignored these coins when they were issued and they
have been mostly ignored ever since. There is no where one can go to buy a nice VF
1969 quarter. If you want this coin you'll have to find it yourself in circulation, but be
prepared to look at about 25,000 other quarters first.
Todays pocket change is even richer in rarities of die varieties than of condition. Nu-
merous varieties don't exist at all in uncirculated condition and are very difficult to
buy in any condition. If you want these you almost have to find them yourself and
when you do it just might be condition census.
I've been working on a "circulation" set for more than seven years and still lack seven
or eight major varieties and all of the best known varieties. Even my main collection
which I've toiled on for 32 years still lacks the three major DDO's and the rarities.
Certainly none of the coins in circulation sell at a premium at the current time, but this
isn't because the coins are undesirable or common, it is merely because these are still
being ignored for the main part.
you've convinced me that i need to try a little experiment. i think i'll try to put together some circ modern sets, just stuff that i can get from circulation and at the bank for face. i'll only challenge myself to go back 40 years. what i think we've lost in the discussion relative to a young collector is that they don't have the resources to buy coins with, it's almost as though we look at it from a perspective of a beginning collector with an advanced collectors income. when i started it was all i could do on a few dollars a week in "allowance" and whatever i scraped up from mwing lawns and shoveling driveways along with Birthday and Christmas money.
thinking back 40 years from 1964 to 1924, there was quite a few holes in my books even though the coins were readily available for a brief period through at least 1968-1970. i wonder how the "Modern" circ set will look??!!??
al h.
Hang around and snag the best of the type, the BU dollars, etc. When metals went crazy 25 years ago, there was so much coming at some of the dealers they didn't even have time to pick the best out of their own purchases. They made out better by just buying it and flipping it as bullion. I got some things that were a bargain at melt, even when melt was $35 or $40.