<< Never in the history of the United States have we seen so much liquid capital in so few hands. 955 Billion dollars in just the hands of 400 people, WOW >>
“That couldn't be further from the truth. Just the opposite. There is more wealth in more hands than at anytime in history. We no longer have someone like Getty, who contolled 5-7% of the US Economy. That is equal to 350-490 Billion in todays dollars.”
Elwood & DMWJR
Gentlemen I do not now where you are getting these ideas, but you must not have been reading the other threads on how poor Americans are.
We have about 294 million people in the U.S. about one third are children, so 98 million. About 77 million are Baby boomers the rest of the 119 million are in the middle. Of the 196 million adults approx. 120 million pay no Federal taxes and are considered under the minimum for taxation by the IRS, so these folks are basically NOT coin collectors. Of the 196 million adults about 40% are boomers and at least 77% of those are basically broke.
“Edward Jones in St. Louis, finished a recent survey and found that 77 percent of Americans between the ages of 50 and 60 have saved less than $37,000 for retirement.”
Where many people might feel as if they have a great deal more wealth than their grandparents, this is an illusion brought on by continuing inflation and I sincerely doubt that many could write a $100,000 check today.
As far as J.Paul Getty goes here are the numbers,
“Getty controlled a vast business empire made up of almost 200 concerns. His personal worth was estimated to be approximately $3 billion at his death. (1892–1976)”
Adjusted for inflation from 1976 Mr. Getty’s net worth at $3,000,000,000 in 1976 would be $9,803,315,493 today, Not $350 Billion.
<< <i>William Gates - Microsoft. Well, let's see, he is worth about $50 BILLION dollars, but it is all Paperstock. If he SOLD all his shares, the stock (and company morale) would plummit. But what has this "get rich quick man" accomplished in his life? Well, let's see: Hired over 100,000 employees over Microsofts tenure, while at the same time providing thousands of families with a good living and better life and work-managing tools from the computer, and has given over 28 BILLION DOLLARS to charities so FAR!!!! >>
Not to take anything away from Gates or to suggest he has anything he doesn't deserve but many of those 100,000 employees would merely be working for other softwarte firms had he never been born. Indeed, if the industry were less efficient because of his absence there might be even more people in the industry.
No person has ever been indispensable to the race or to the economy. Perhaps Sir Isaac Newton came closest but remember he once said that if he had seen far- ther than others it was only because he was standing on the shoulders of giants.
How Do You Know When the Smart Money Is Leaving the Market?
Unless you are buying for investment and/or you have a significant amount of your net worth tied up in coins, does it matter all that much?
If you are buying for enjoyment (like skiing is fun, cars are fun, vacations are fun, dining out is fun, going to football games is fun, etc.), it should not matter all that much.
My wife wants us to get a piano. One of her pitches to me was that it is a "good investment." I replied "Baloney! Let's get a piano so that you enjoy it, and the kids learn to play it. But don't give me the investment line." How liquid is a piano? Do people "flip" them? I doubt it. We have been similarly pitched rugs, paintings, antique furniture because it's a "good investment." I will buy the stuff when we can use it, but please spare me the "good investment" line.
<< <i> think he's thinking of JP Morgan ... or perhaps JD Rockefeller >>
Thanks TDN, my mistake, I ment Rockefeller. If JD Rockefeller controlled 5-7% of the economy when Standard Oil was at its largest. A comp. to today would be 5-7% of 7 Trillion Dollars then that would be 350-490 million dollars. JP Morgan would be another good example. I believe the US Government on at least one occasion had to borrow money from him. If Goldsaint thinks that people aren't better off today then I don't know what world he is living in. I'm not that old, but there is no comparison today, to what this country was like in the 60's and 70's. Vacation Homes, second homes, 2-3 cars, TV's in every room, air travel, vacations.
Actually the famous quote by J.D. Rockefeller upon Morgan's death with a worth around 50 million was " Gosh and I thought he was so wealthy". The fact is that Morgan did bail out the U.S. Government in 1907, but he did it through his stock interests in many banks, shear willpower, and literally locking all the N.Y. bankers in a room overnight until they came up with the dough. Rockefeller did not have that power, but did have much more money and control over his little corner of the economy but this is equally true of all the robber barrons of the era like Carnegie and others. The question is if the current billionaires are having undue influence on this coin market or not. The answer in my opinion is that's silly, they're after a few top coins yes, but there are a lot of top coins. Moving a grade or two lower, the populations increase geometrically so there are still many very high quality examples for most collectors to buy. Are a significant number of collectors being priced out?The answer is actually yes in the sense that they are not able to complete many collections as quickly as they hoped. But arguing that your current collection is going up in value too much is a bit strange, even if it can't be completed immediately. It might make sense to sell off some secondary material and wait it out for an opportunity to present itself, if prices seem unrealistic.
Look at the direction of interest rates, how the dollar is trading overseas and what other investment alternatives exist. When interest rates are back up to 6%, and that could be sooner than expected to prop up a sagging dollar and if there is renewed confidence in technology or some other sector of the economy that attracts investor interest, the party will slow down, prices will rotate up and down from series to series. There will be a correction for coins, but nothing like what was experienced after the 1989 peak. The current cycle still has some legs, but interest rates will have an impact in determining the length of the cycle.
Experience the World through Numismatics...it's more than you can imagine.
Assuming 6% interest rates in 1-2 years, those won't even compensate for what inflation will be. You can be assurred that the FED will be lagging behind the inflation rate. Right now many agree that they are 2-3% behind the true inflation rate. When 6% interest rates hit, the inflation rate will be in the 7-10%, and "real" interest rates will still be negative (i.e. losing money to inflation). It took much higher rates to stop the train in the early 1980's. I suspect with the world's problems being far greater today, it will take well into double digit interest rates just to start the reversal process.
If Goldsaint thinks that people aren't better off today then I don't know what world he is living in. I'm not that old, but there is no comparison today, to what this country was like in the 60's and 70's. Vacation Homes, second homes, 2-3 cars, TV's in every room, air travel, vacations.
Depends on what you think "better off" means. If buying our lifestyles on credit means we are better off than "we are better off." These 2nd homes are leveraged as a rule. A place to park the money temporarily rather than lose it to the inflating dollar. The family that used to own 50% of their $250,000 home now own 25% of their $500,000 home purchased on a 4% ARM. Are they any better off or richer? I don't know. They feel better now. But if that $500K house becomes worth $300K and their ARM continues to escalate, they won't feel better off for long. For those that kept their homes and used the inflated equity to "buy" SUV's and 2nd homes, they've leveraged themselves to the hilt...all dependent on an asset that must escalate to keep them above water. What happens when housing decides to correct, bigtime?
We've bought our new lifestyles on credit and inflation at the world's expense for the past 20-25 years, and moreso in the last 10 years. Does everyone really think there is no severe payback for this foolishness? Recorded history has shown there is always an equal payback.
I agree with you road runner. But though the debt load may be high for a home or even teh second home also, rates are so low, it shouldn't be too much trouble to make the monthly payments. Everyone should have a fixed rate now, because of record lows. T.V.'s and computers are cheap, and most everything else is. We are way better off now.
Coins are purchased with discretionary income. They are a luxury. The fact that they are going up in value tells me there is a lot of money in this country. I don't think many collectors are buying on credit or going bankrupt from their coin purchases. The coins I'm selling are going into long term collections and profit plays a very small part of their buying decisions.
<< <i>Depends on what you think "better off" means. If buying our lifestyles on credit means we are better off than "we are better off." >>
Roadrunner, I don't know how old you are? Remember back to your childhood and tell me people are not better off in this country. Just look at medical advances and how we have extended our life expectancy. Technology, public works, sanitation, safety, food supply, etc... We are so spoiled today and take everything for granted. We fail to appreciate how good we have it. If people don't know how to manage their money in the good times, to get through the bad, then so be it.
Question: How Do You Know When the Smart Money Is Leaving the Market?
The average collector will likely never know the answer to this question since smart money/big money likely isn't buying the same kind of coins that myself or the average collector is buying.
<< <i>Question: How Do You Know When the Smart Money Is Leaving the Market?
The average collector will likely never know the answer to this question since smart money/big money likely isn't buying the same kind of coins that myself or the average collector is buying. >>
Thank you, thank you, thank you . . . . did I say thank you?
. . . . for pointing out the problem in this thread. Big money is not the same as smart money. Some of these guys want to talk about big money, but that doesn't make it smart money.
Big money can "make a market" and if you want to watch these guys and ride their wave, you'd better be looking when they decide to crash the market they just made.
I know a couple of guys into coins that never put more than four figures into a coin. The actually don't know each other, and play in different areas of the coin market. These guys watch the markets like a hawk and do really well for themselves. I consider them to be smart money.
If Goldsaint thinks that people aren't better off today then I don't know what world he is living in. I'm not that old, but there is no comparison today, to what this country was like in the 60's and 70's. Vacation Homes, second homes, 2-3 cars, TV's in every room, air travel, vacations.
hey Elwood
all this talk about disposable income, net worth and money-this-money-that with relation to 30 years ago is interesting until we start to compare the essential fact of the quality of life and society in general. while the individual, rightly placed, may be sitting better today, i truly believe that society as a whole was better off back in the 60's and 70's. i'd take that ease and innocence of living over the monetary gains every day of the week. being raised 15 miles from downtown Cleveland we left our doors unlocked at night and actually knew and inter-acted with the whole block. by comparison, with our wealth of today we are fortress America.
wealth gives an illusion of "better-offness" that can be deceiving. the fact that we can afford to buy security in our lives should in itself say something. monetarily, i make about the same per year as i did in 1980, although i do it working less hours, which is a fair and equitable trade off for me. all the same, while i don't feel less safe, nothing surprises me anymore, probably because i've insulated myself from the insanity in the past few decades.
come to think of it, you're correct, there is no comparison today with the 60's and 70's. send me back now, please!!!
I had a pawnshop. My largest "growth" area was the exclusive NEW gated lakeside communities. They had nice stuff. One guy even had $43,000 on his credit card. I had contractors pawning their company vehicles on Fridays to meet payroll.
I can even remember when we were so poor that only the HUSBAND had to work to buy a house, car, vacations, TV's, etc.
I totally agree with you. WEALTH and advancement of technology and health is better of, but I think MORALITY and the peaceful easy living standards, innocence, and friendliness of neighbors/other people is not as great as it SEEMED to be 40 years ago. Even I am a little impatient and rude, (sorry Goldsaint, but you just do it to me!), but I am trying to be more easy-going. It's much more fun being nice.
For example, my wife says she drives the speed limit, NO faster now, (because she had some driving issues!!!). She said she gets guys (and gals) in big trucks right on her tail, flipping her off... on a daily basis. All because she is abiding by the speed limit. I didnt believe her, so I experimented with her. Hid in the back of her (our) mini-van, and sure enough, within 30 minutes, three honks at her, and two people flipping her off.
Is there that much stress, and disrespect for others, and are we all in such a hurry, and have to be so rude about it?? I am working on the OPPOSITE...
It's time to leave the market when people who know nothing about coins (nor do they have any interest in them, per se), spend huge sums buying the finest known pieces of plastic as 'investments.'
"Vou invadir o Nordeste, "Seu cabra da peste, "Sou Mangueira......."
Even I am a little impatient and rude, (sorry Goldsaint, but you just do it to me!),
Lloyd
Perhaps we just got off on the wrong foot, I suggest we bury the hatchet, and start over.
I actually think most of what you think about some of my posts is a misunderstanding. Many who know me a little better would tell you that what some times seems like a type of jealousy regarding the wealth of others is no more that me just playing devil’s advocate in some threads, so that we consider many different issues.
I actually consider myself to be in the top 1% of the luckiest people living on the planet. I have a great relationship with the Lord, no real financial worries, work 4 hours per day 5 days a week, have great kids, a beautiful wife, a great home, good health, and I am finally spending time enjoying the hobby I have loved for 40 years. I could not afford to pay cash for any coin over $300,000 and then I could never buy anymore, but I have never paid more that $10,000, and most likely will never pay more than $10,000. Most of my threads stem from an insatiable curiosity about every thing in life from Quantum Physics to economics. I am not concerned about myself and my family’s well being, like many here I have prepared for the worst the very best I could for over 20 years. I am however very concerned over the health, and financial safety of my fellow Americans.
Actually I think it is fantastic that America produces some of the wealthiest people on the planet and I love the show when they spend their money on fabulous coins.
<< <i>How Do You Know When the Smart Money Is Leaving the Market? >>
For most people the realization comes too late. It's when you bring your best coins to show to sell, and no one will buy them, at least not a price that you think is reasonable given the recent market.
In that case you will have to wait for another coin market cycle.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
This was a great thread, and I want to personally thank all of you for your input. As a collector I value the opinion of other collectors and enjoy this forum of open discussion. I have learned a great deal just from reading most of the post here. I hope most of you stay the course and collect the coins that truely bring you some enjoyment as they do for me. If I ever become one of those billionaires coins will be on me! Fred
Ellwood, I have to agree with Keets on this one too. I'm 50 years old so my memories of the 60's and 70's is that those times were better.....by far. Probably the later 1950's and into the 1960's was a very carefree time. We no longer have an era where you can support a family on one income. At least not most Americans. This is my biggest barometer imo of "better" off. The rat-race is up several notches. Years back, most Dads worked 40-45 hours per week. My Dad always got to work for 9 am and was home by 5:30. Contrarily, most Dads today probably go in at 7-8 am and work to 5-6pm. As a family of 7, we lived comfortably on my Dad's $25K salary in the 1960's. You can make 3X that today and not be even close to comfortable. Bottom line, is that today, families are putting in 100 hour weeks to do what it used to take 40-50 hrs to do. I can't call that better off. Mothers don't raise their kids like we used to either.
"Smart Money" always leaves the market "too early." They actually make money and keep it. "Dumb money" stays too long at the trough. Oink!
How do you know when the smart money is leaving the market?
Simple: When great coins suddenly become available at attractive price. By then, it is too late to dump your coins and just better off buying some more!
Never try to figure out the second half of the lifespan of a boom market! Too tricky.
Better just to think ultra long term.
But not withstanding the above commentary.........................Mark my words, we will have a moderate cool down and some retrenching of prices starting next summer. It will be a welcome cool down plase that will last about 1 year or so, although we will all fret about it when it happens. In historical perspective, it will be the best thing for the long term for our hobby.
I just noticed that the next post of mine will be 4000!!!!!!!!!!!!!!!!!!!!! I must talk too much???????????????????
Oreville, I'm only 50 posts behind you to 4000. And I probably got 1000 of those on the open forum during election time. Now I know how people get crazy numbers on their postings.
With that cool down period next summer do you see another up cycle following that, or is that it? Cool down and then just slow activity for years? Though I don't think gold's effects, which have years yet to run, will allow a full slowdown anytime during those years.
<< <i>Simple: When great coins suddenly become available at attractive price. By then, it is too late to dump your coins and just better off buying some more! >>
Yep! When I was purely a collector, I was very much of a contrary buyer. I LOVED really bad coin markets because that was time when prices got to levels that I could afford. The down side was that many of the good coins were not on the market because the smart, “firm” hands knew that things would get better. That forced me to really work my tail off at show to find what I wanted, but I ultimately found it.
As a collector I’ve always been a long-term person. I have coins in my collection that I’ve owned since the 1960s. Needless to say you be amazed at some of the price changes over that time. A couple of weeks ago I sold a coin that I upgraded, which I purchased in 1965 for $45 retail. I sold it for $1,300 wholesale.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
OPEC Nations Seen Cutting Worldwide Deposits in Dollars
Published: December 6, 2004
ONDON, Dec. 5 - Member nations of the Organization of the Petroleum Exporting Countries have cut the proportion of their deposits denominated in dollars by more than 13 percentage points in the past three years, mainly to the advantage of the euro, the Bank for International Settlements said Sunday.
In its latest quarterly report, the Bank for International Settlements - a forum for world central banks - attributed the trend partly to United States interest rates having fallen below euro-zone levels.
The report said dollar-denominated deposits fell to 61.5 percent of total deposits by members OPEC in the second quarter of 2004, from 75 percent in the third quarter of 2001.
The share of euro-denominated deposits rose to 20 percent from 12 percent over the same period.
The bank, based in Basel, Switzerland, noted that less oil revenues seem to have gone into the international banking system recently but said there had been a "subtle but noticeable" shift in the composition of deposits in the past three years.
"Since the third quarter of 2001, oil revenue seems to have been channeled increasingly into euro and other currency deposits," the bank said. "This shift out of U.S. dollars probably reflected to some extent the relative change in interest rates in the United States and the euro area since 1998."
The bank said United States short-term interest rates were an average 2.1 percentage points higher than their euro counterparts for two years before March 2001, but averaged 1.3 percentage points lower from then to June 2004. In the 2004 second quarter, B.I.S. reporting banks' net liabilities to OPEC members stood at $142 billion.
Oil prices rose 70 percent at one point this year from early January due to fast growth in demand and concerns over supply. The United States crude oil price advanced to $55.67 in October but has since fallen back to around $42.50. Speculation that Middle Eastern central banks and investors had been shifting funds out of the dollar into the euro contributed to the dollar's decline in the past three years. The dollar hit a record low on Thursday, when one euro was worth $1.34.
OPEC nations are Saudi Arabia, Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, United Arab Emirates and Venezuela. The B.I.S. excluded Indonesia from its study because it became a net oil importer this year.
“As a collector I’ve always been a long-term person. I have coins in my collection that I’ve owned since the 1960s. Needless to say you be amazed at some of the price changes over that time. A couple of weeks ago I sold a coin that I upgraded, which I purchased in 1965 for $45 retail. I sold it for $1,300 wholesale.”
Bill,
I am sure many of us have the same situation, I know I do. I have many coins that have made large gains over the last several decades. Not worth big bucks, but some very nice profits. Even coins I bought just one year ago in my Bust Half collection have doubled in price i.e. 1794,1801,1802 etc.
My big problem here is that if I sell THEN WHAT? As I look around as to where I might put some profits all I see is PAPER, and I personally don’t want any paper right now.
I have been using Carl Wohlforth to sell some extras, and by the way he does a great job for those of us that don’t have an Ebay site, but this money has been going right back into the hobby.
Unless we do in fact have a buying opportunity in the next year, anyone selling now will have paper to deal with, and will not be able to replace sold coins at lower levels. In my personal case I only want to sell coins to finance other coins.
In the late 70’s and early 80”s you could take profits, and put the money in T-Bills at 13%, but selling today you put the money where?
My problem is that coins are the most enjoyable luxury goods that I can buy. What good is money if I can't turn it into a coin that I REALLY enjoy owning?
I keep virtually no duplicates. When I upgrade something, the old one goes out the door. But I have lost interest in a fairly small number of items through the years, and that's why I still have some stuff that I purchased many years ago.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
I lived in New York City from when I was born until I was about 10. Our apartment got broken into at least half a dozen times. I got mugged on the streets. The city didn't have doggy pooper scooper laws if I remember correctly. Both my parents worked.
We lived in Kentucky for a year after that. There were poor people living in tar paper shacks and horses living in carpeted, air conditioned stables. Then we moved to New Jersey. I remember stagflation and bad stock markets in the 70s. Also fat polyester ties. My parents divorced and both still worked.
Now I live in the suburbs. The air here in San Jose, CA is cleaner than it was 30 years ago. I have a nice house and family. For me things are way, way better now than back in the bad old days.
Naturally I am worried about the US debts. I just don't think the sky is falling. Maybe I'm too optimistic but I think we (the U.S.) will get our house in order.
I'm selling my coin collection (thanks for the plug GoldSaint!). I am making what I consider a very good investment with it. I am paying for my daughter's education. If I ever found a million dollars laying around (ha, ha, ha!) I would buy coins as I enjoy them.
O.K. GOLDSAINT. I have agreed to sign the "Disarmament Treaty" between you and I!!! Do to lack of funding and too many nice coins coming up at F.U.N. and Richmond Collection in the spring, I can't justify budgeting more for my military anyway!!!!
Comments
“That couldn't be further from the truth. Just the opposite. There is more wealth in more hands than at anytime in history. We no longer have someone like Getty, who contolled 5-7% of the US Economy. That is equal to 350-490 Billion in todays dollars.”
Elwood & DMWJR
Gentlemen I do not now where you are getting these ideas, but you must not have been reading the other threads on how poor Americans are.
We have about 294 million people in the U.S. about one third are children, so 98 million. About 77 million are Baby boomers the rest of the 119 million are in the middle.
Of the 196 million adults approx. 120 million pay no Federal taxes and are considered under the minimum for taxation by the IRS, so these folks are basically NOT coin collectors.
Of the 196 million adults about 40% are boomers and at least 77% of those are basically broke.
“Edward Jones in St. Louis, finished a recent survey and found that 77 percent of Americans between the ages of 50 and 60 have saved less than $37,000 for retirement.”
Where many people might feel as if they have a great deal more wealth than their grandparents, this is an illusion brought on by continuing inflation and I sincerely doubt that many could write a $100,000 check today.
As far as J.Paul Getty goes here are the numbers,
“Getty controlled a vast business empire made up of almost 200 concerns. His personal worth was estimated to be approximately $3 billion at his death. (1892–1976)”
Adjusted for inflation from 1976 Mr. Getty’s net worth at $3,000,000,000 in 1976 would be $9,803,315,493 today, Not $350 Billion.
I really do try to not respond to your comments, so I will keep this short.
I only have two questions for you today,
Did you take your medication today, and have you bought any million dollar coins this week?
There are at least half a dozen. While that may be few in number, it don't take many!
Thanks TDN
<< <i>William Gates - Microsoft. Well, let's see, he is worth about $50 BILLION dollars, but it is all Paperstock. If he SOLD all his shares, the stock (and company morale) would plummit. But what has this "get rich quick man" accomplished in his life? Well, let's see: Hired over 100,000 employees over Microsofts tenure, while at the same time providing thousands of families with a good living and better life and work-managing tools from the computer, and has given over 28 BILLION DOLLARS to charities so FAR!!!! >>
Not to take anything away from Gates or to suggest he has anything he doesn't
deserve but many of those 100,000 employees would merely be working for other
softwarte firms had he never been born. Indeed, if the industry were less efficient
because of his absence there might be even more people in the industry.
No person has ever been indispensable to the race or to the economy. Perhaps
Sir Isaac Newton came closest but remember he once said that if he had seen far-
ther than others it was only because he was standing on the shoulders of giants.
Unless you are buying for investment and/or you have a significant amount of your net worth tied up in coins, does it matter all that much?
If you are buying for enjoyment (like skiing is fun, cars are fun, vacations are fun, dining out is fun, going to football games is fun, etc.), it should not matter all that much.
My wife wants us to get a piano. One of her pitches to me was that it is a "good investment." I replied "Baloney! Let's get a piano so that you enjoy it, and the kids learn to play it. But don't give me the investment line." How liquid is a piano? Do people "flip" them? I doubt it. We have been similarly pitched rugs, paintings, antique furniture because it's a "good investment." I will buy the stuff when we can use it, but please spare me the "good investment" line.
<< <i> think he's thinking of JP Morgan ... or perhaps JD Rockefeller >>
Thanks TDN, my mistake, I ment Rockefeller.
If JD Rockefeller controlled 5-7% of the economy when Standard Oil was at its largest. A comp. to today would be 5-7% of 7 Trillion Dollars then that would be 350-490 million dollars.
JP Morgan would be another good example. I believe the US Government on at least one occasion had to borrow money from him.
If Goldsaint thinks that people aren't better off today then I don't know what world he is living in. I'm not that old, but there is no comparison today, to what this country was like in the 60's and 70's. Vacation Homes, second homes, 2-3 cars, TV's in every room, air travel, vacations.
I hope most of us stick around.
Experience the World through Numismatics...it's more than you can imagine.
If Goldsaint thinks that people aren't better off today then I don't know what world he is living in. I'm not that old, but there is no comparison today, to what this country was like in the 60's and 70's. Vacation Homes, second homes, 2-3 cars, TV's in every room, air travel, vacations.
Depends on what you think "better off" means. If buying our lifestyles on credit means we are better off than "we are better off."
These 2nd homes are leveraged as a rule. A place to park the money temporarily rather than lose it to the inflating dollar. The family that used to own 50% of their $250,000 home now own 25% of their $500,000 home purchased on a 4% ARM. Are they any better off or richer? I don't know. They feel better now. But if that $500K house becomes worth $300K and their ARM continues to escalate, they won't feel better off for long. For those that kept their homes and used the inflated equity to "buy" SUV's and 2nd homes, they've leveraged themselves to the hilt...all dependent on an asset that must escalate to keep them above water. What happens when housing decides to correct, bigtime?
We've bought our new lifestyles on credit and inflation at the world's expense for the past 20-25 years, and moreso in the last 10 years. Does everyone really think there is no severe payback for this foolishness? Recorded history has shown there is always an equal payback.
roadrunner
<< <i>Depends on what you think "better off" means. If buying our lifestyles on credit means we are better off than "we are better off." >>
Roadrunner, I don't know how old you are? Remember back to your childhood and tell me people are not better off in this country. Just look at medical advances and how we have extended our life expectancy. Technology, public works, sanitation, safety, food supply, etc... We are so spoiled today and take everything for granted. We fail to appreciate how good we have it. If people don't know how to manage their money in the good times, to get through the bad, then so be it.
A good thread resuscitated is . . . still a good thread!
I hope most of us stick around.
-------------------------
Happy collecting,
Oreville
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
like another share of stock. Their is nothing
unique or unusual for one to show pride in
and wish to display it to others for their admiring
eyes. To gather a collection of rare coins, each with
uniqe characteristics of strike, tone, grade, surface
texture and rarity, takes a long time. Such coins are not
readily available at even exhorbitant prices. It takes patience,
dicipline, sacrifice and experience to assemble just the right coins.
To sell ones collection for paper money to sell into a market top, does
not mean it can be replaced,if in fact the market should go down.
These coins are in fact old friends pieces of scultured beauty, further
enhanced, in there beauty, by the passage of time and climate. Being a collector,
is about study, learning, interpersonal relations. It is about reputations, integrity
pride, friendships, and experiences that will last us a lifetime.
Camelot
Answer: When you are left holding the bag (wanna buy some 1989 issue MS65 Morgans for $500 apiece?)!!
The average collector will likely never know the answer to this question since smart money/big money likely isn't buying the same kind of coins that myself or the average collector is buying.
<< <i>Question: How Do You Know When the Smart Money Is Leaving the Market?
The average collector will likely never know the answer to this question since smart money/big money likely isn't buying the same kind of coins that myself or the average collector is buying. >>
Thank you, thank you, thank you . . . . did I say thank you?
. . . . for pointing out the problem in this thread. Big money is not the same as smart money. Some of these guys want to talk about big money, but that doesn't make it smart money.
Big money can "make a market" and if you want to watch these guys and ride their wave, you'd better be looking when they decide to crash the market they just made.
I know a couple of guys into coins that never put more than four figures into a coin. The actually don't know each other, and play in different areas of the coin market. These guys watch the markets like a hawk and do really well for themselves. I consider them to be smart money.
Just MHO.
hey Elwood
all this talk about disposable income, net worth and money-this-money-that with relation to 30 years ago is interesting until we start to compare the essential fact of the quality of life and society in general. while the individual, rightly placed, may be sitting better today, i truly believe that society as a whole was better off back in the 60's and 70's. i'd take that ease and innocence of living over the monetary gains every day of the week. being raised 15 miles from downtown Cleveland we left our doors unlocked at night and actually knew and inter-acted with the whole block. by comparison, with our wealth of today we are fortress America.
wealth gives an illusion of "better-offness" that can be deceiving. the fact that we can afford to buy security in our lives should in itself say something. monetarily, i make about the same per year as i did in 1980, although i do it working less hours, which is a fair and equitable trade off for me. all the same, while i don't feel less safe, nothing surprises me anymore, probably because i've insulated myself from the insanity in the past few decades.
come to think of it, you're correct, there is no comparison today with the 60's and 70's. send me back now, please!!!
al h.
I had a pawnshop. My largest "growth" area was the exclusive NEW gated lakeside communities. They had nice stuff. One guy even had $43,000 on his credit card. I had contractors pawning their company vehicles on Fridays to meet payroll.
I can even remember when we were so poor that only the HUSBAND had to work to buy a house, car, vacations, TV's, etc.
<< <i>come to think of it, you're correct, there is no comparison today with the 60's and 70's. send me back now, please!!! >>
I don't disagree!!!!
I totally agree with you. WEALTH and advancement of technology and health is better of, but I think MORALITY and the peaceful easy living standards, innocence, and friendliness of neighbors/other people is not as great as it SEEMED to be 40 years ago. Even I am a little impatient and rude, (sorry Goldsaint, but you just do it to me!), but I am trying to be more easy-going. It's much more fun being nice.
For example, my wife says she drives the speed limit, NO faster now, (because she had some driving issues!!!). She said she gets guys (and gals) in big trucks right on her tail, flipping her off... on a daily basis. All because she is abiding by the speed limit. I didnt believe her, so I experimented with her. Hid in the back of her (our) mini-van, and sure enough, within 30 minutes, three honks at her, and two people flipping her off.
Is there that much stress, and disrespect for others, and are we all in such a hurry, and have to be so rude about it?? I am working on the OPPOSITE...
Lloyd
"Seu cabra da peste,
"Sou Mangueira......."
Lloyd
Perhaps we just got off on the wrong foot, I suggest we bury the hatchet, and start over.
I actually think most of what you think about some of my posts is a misunderstanding. Many who know me a little better would tell you that what some times seems like a type of jealousy regarding the wealth of others is no more that me just playing devil’s advocate in some threads, so that we consider many different issues.
I actually consider myself to be in the top 1% of the luckiest people living on the planet. I have a great relationship with the Lord, no real financial worries, work 4 hours per day 5 days a week, have great kids, a beautiful wife, a great home, good health, and I am finally spending time enjoying the hobby I have loved for 40 years. I could not afford to pay cash for any coin over $300,000 and then I could never buy anymore, but I have never paid more that $10,000, and most likely will never pay more than $10,000.
Most of my threads stem from an insatiable curiosity about every thing in life from Quantum Physics to economics. I am not concerned about myself and my family’s well being, like many here I have prepared for the worst the very best I could for over 20 years. I am however very concerned over the health, and financial safety of my fellow Americans.
Actually I think it is fantastic that America produces some of the wealthiest people on the planet and I love the show when they spend their money on fabulous coins.
<< <i>How Do You Know When the Smart Money Is Leaving the Market? >>
For most people the realization comes too late. It's when you bring your best coins to show to sell, and no one will buy them, at least not a price that you think is reasonable given the recent market.
In that case you will have to wait for another coin market cycle.
"Smart Money" always leaves the market "too early." They actually make money and keep it. "Dumb money" stays too long at the trough. Oink!
roadrunner
Simple: When great coins suddenly become available at attractive price. By then, it is too late to dump your coins and just better off buying some more!
Never try to figure out the second half of the lifespan of a boom market! Too tricky.
Better just to think ultra long term.
But not withstanding the above commentary.........................Mark my words, we will have a moderate cool down and some retrenching of prices starting next summer. It will be a welcome cool down plase that will last about 1 year or so, although we will all fret about it when it happens. In historical perspective, it will be the best thing for the long term for our hobby.
I just noticed that the next post of mine will be 4000!!!!!!!!!!!!!!!!!!!!!
I must talk too much???????????????????
With that cool down period next summer do you see another up cycle following that, or is that it? Cool down and then just slow activity for years? Though I don't think gold's effects, which have years yet to run, will allow a full slowdown anytime during those years.
roadrunner
<< <i>Simple: When great coins suddenly become available at attractive price. By then, it is too late to dump your coins and just better off buying some more! >>
Yep! When I was purely a collector, I was very much of a contrary buyer. I LOVED really bad coin markets because that was time when prices got to levels that I could afford. The down side was that many of the good coins were not on the market because the smart, “firm” hands knew that things would get better. That forced me to really work my tail off at show to find what I wanted, but I ultimately found it.
As a collector I’ve always been a long-term person. I have coins in my collection that I’ve owned since the 1960s. Needless to say you be amazed at some of the price changes over that time. A couple of weeks ago I sold a coin that I upgraded, which I purchased in 1965 for $45 retail. I sold it for $1,300 wholesale.
A valde,
This is a sign in page can you please cut and paste this
Here you go:
==========
OPEC Nations Seen Cutting Worldwide Deposits in Dollars
Published: December 6, 2004
ONDON, Dec. 5 - Member nations of the Organization of the Petroleum Exporting Countries have cut the proportion of their deposits denominated in dollars by more than 13 percentage points in the past three years, mainly to the advantage of the euro, the Bank for International Settlements said Sunday.
In its latest quarterly report, the Bank for International Settlements - a forum for world central banks - attributed the trend partly to United States interest rates having fallen below euro-zone levels.
The report said dollar-denominated deposits fell to 61.5 percent of total deposits by members OPEC in the second quarter of 2004, from 75 percent in the third quarter of 2001.
The share of euro-denominated deposits rose to 20 percent from 12 percent over the same period.
The bank, based in Basel, Switzerland, noted that less oil revenues seem to have gone into the international banking system recently but said there had been a "subtle but noticeable" shift in the composition of deposits in the past three years.
"Since the third quarter of 2001, oil revenue seems to have been channeled increasingly into euro and other currency deposits," the bank said. "This shift out of U.S. dollars probably reflected to some extent the relative change in interest rates in the United States and the euro area since 1998."
The bank said United States short-term interest rates were an average 2.1 percentage points higher than their euro counterparts for two years before March 2001, but averaged 1.3 percentage points lower from then to June 2004. In the 2004 second quarter, B.I.S. reporting banks' net liabilities to OPEC members stood at $142 billion.
Oil prices rose 70 percent at one point this year from early January due to fast growth in demand and concerns over supply. The United States crude oil price advanced to $55.67 in October but has since fallen back to around $42.50. Speculation that Middle Eastern central banks and investors had been shifting funds out of the dollar into the euro contributed to the dollar's decline in the past three years. The dollar hit a record low on Thursday, when one euro was worth $1.34.
OPEC nations are Saudi Arabia, Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, United Arab Emirates and Venezuela. The B.I.S. excluded Indonesia from its study because it became a net oil importer this year.
Bill,
I am sure many of us have the same situation, I know I do. I have many coins that have made large gains over the last several decades. Not worth big bucks, but some very nice profits. Even coins I bought just one year ago in my Bust Half collection have doubled in price i.e. 1794,1801,1802 etc.
My big problem here is that if I sell THEN WHAT? As I look around as to where I might put some profits all I see is PAPER, and I personally don’t want any paper right now.
I have been using Carl Wohlforth to sell some extras, and by the way he does a great job for those of us that don’t have an Ebay site, but this money has been going right back into the hobby.
Unless we do in fact have a buying opportunity in the next year, anyone selling now will have paper to deal with, and will not be able to replace sold coins at lower levels.
In my personal case I only want to sell coins to finance other coins.
In the late 70’s and early 80”s you could take profits, and put the money in T-Bills at 13%, but selling today you put the money where?
Thanks A Valde
I keep virtually no duplicates. When I upgrade something, the old one goes out the door. But I have lost interest in a fairly small number of items through the years, and that's why I still have some stuff that I purchased many years ago.
We lived in Kentucky for a year after that. There were poor people living in tar paper shacks and horses living in carpeted, air conditioned stables. Then we moved to New Jersey. I remember stagflation and bad stock markets in the 70s. Also fat polyester ties. My parents divorced and both still worked.
Now I live in the suburbs. The air here in San Jose, CA is cleaner than it was 30 years ago. I have a nice house and family. For me things are way, way better now than back in the bad old days.
Naturally I am worried about the US debts. I just don't think the sky is falling. Maybe I'm too optimistic but I think we (the U.S.) will get our house in order.
I'm selling my coin collection (thanks for the plug GoldSaint!). I am making what I consider a very good investment with it. I am paying for my daughter's education. If I ever found a million dollars laying around (ha, ha, ha!) I would buy coins as I enjoy them.