Future Numismatic Fallout from the Ohio Situation...
291fifth
Posts: 25,139 ✭✭✭✭✭
According to articles in the Toledo Blade there is now (surprise) a movement in the Ohio legislature to formally prohibit unregulated investment vehicles such as coins from any Ohio government agency's portfolio. I suspect this will soon spread to other states as well. This will effectively diminish the importance of coins as "investment" items.
Can coins ever be taken seriously as investment vehicles or, as I suspect, do the "players" in the field preclude progress from ever being made.
Can coins ever be taken seriously as investment vehicles or, as I suspect, do the "players" in the field preclude progress from ever being made.
All glory is fleeting.
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If an individual wants to invest in coins (or art...) with his/her own money, that is one thing. For a governmental agency to invest with public money, it is entirely different.
What they heck were thinking putting stocks so easily into retirement accounts without the proper oversights and safety nets available to the consumers.
roadrunner
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>There was a front page article in the NY Times about this yesterday. I don't have a link to the article, but the article focused on Noe being a golden child of the Republican party in terms of fund raising, and how all of the filthy dirty politicians are now running in the opposite direction from him. >>
Here it is:
NYTimes-registration required
it's not in this article, but Noe was also on the citizen's advisory committee on coinage for the mint and recently resigned that position.
Don
The Ohio voters and newspapers won't be able to understand these standard protective investment hedges, so they can go ahead and lose a few 100 million (offset by greater capital gains) on these investment hedges. These vehicles do the exact same thing as coins, but the Fund manager doesn't have to explain it to the idiot politicians.
At some point in time, there will be more regulation in numismatics, as this is an overall trend. When enough people complain about getting ripped off, and the dollar amount is deemed to be material, then you'll see it.
Bajerfan, your statement is so general as to be without value. If you're talking about penny-stocks -- or anything else which has been manipulated repeatedly over time -- then your statement has some merit. But to lump penny stock and Third World start up stocks with the likes of G.E. or Caterpillar means that your statement lacks credibility. Furthermore, the coin market is thin, very volatile, and routinely manipulated. If you call putting money into coins an 'investment,' then you simply do not understand the concept of investing.
"Seu cabra da peste,
"Sou Mangueira......."
In general anyone investing their 401k's in standard stock indexes (Nasdaq, DOW, S&P, Lg Cap, Mid Cap, etc) within 10 years from now will be screaming for legislation based on huge losses. This has nothing to do with penny stocks and the like, but the mainstream investment vehicles that have been touted to Americans as "can't lose investments" and "sure-fire way to riches." Yet something like commodities (and gold, silver, coins, etc in particular) get villified.
Had the BWC scandal been about losing $50 MILL in risky stocks or bonds, you'd have never heard about it. Those are good losses that help "build" the economy.
roadrunner
Coins are for collectors. In the long run all investors do is mess up the coin market. They drive prices up to speculative levels, and then when their “investments” are not performing the way they think they should, they lose money and carp and complain about it.
No, coins do not belong in investment portfolios and that goes double for pension funds and other old age and retirement funds.
No, coins do not belong in investment portfolios and that goes double for pension funds and other old age and retirement funds.
This is like throwing the baby out with the bath water. The real problem is the word "investment" and that such a thing actually exists. It doesn't. If everyone is doing it....by definition it cannot be an investment (stocks long term for instance). Not your home not your stocks and bonds either. Not everyone was into stocks prior to the 1990's, but they are now. Investment? I think not? A mania? Probably. One exception might be when everyone saved via a savings account at their local bank. That was safe and everyone was doing it. Today that account has been replaced by home "ownership" with no money down ARM's and interest free loans.
Since coming off the gold standard, there really is no such thing as investments in equities as existed prior to this. They are all speculations based on the greater fool theory. Not having a currency tied to something tangible has guaranteed a sizeable and constant rate of inflation that has accentuated the boom and bust cycles for various markets (i.e. volatility). It's going to get worse before it can ever better. People will complain about losing their 401k's and pension funds down the road too. It's all based on the same house of cards (unlimited fiat money). The last 10 years of stock and housing prices is precisely a "speculative" phase like we've never seen before. The FED and Treasury have provided all the fuel needed to make these swings occur more than ever before. Label it an investment if you will, but there are other less attractive names for it. They drive prices (homes, stocks too) up to speculative levels, and then when their “investments” are not performing the way they think they should, they lose money and carp and complain about it.........like anything else.
roadrunner
If you would bother to study some late 19th century economic history (when application of the gold standard was in full force) you would realize that the gold standard was not the panacea that you image it to be. Having the stock of money (money supply) in a straitjacket, which is limited by the amount of a commodity (gold) that a nation’s central bank holds, is a recipe for booms and busts and generally hard times for small businesses and working people. All the gold standard does is to place a limit on the amount of money that can be in circulation at a given time. That can be a good or bad thing depending upon the amount of gold that is in a nation’s treasury. Why should a growing economy have its potential limited by the supply of ONE commodity, gold. Why is gold a god?
AND if it is perceived that a nation’s currency is worth less than the amount of gold for which it can be redeemed, there will be a “run” on the treasury, which will cause the system collapse in any case. That was one of the root causes of the Panic of 1893, which Grover Cleveland spend most of his second term as president trying to correct.
In recent years Alan Greenspan through the Federal Reserve as done a commendable job managing the money supply. What inflation there has been, has been caused by increases in energy prices, which have little to do with the stock of gold.
No, let the gold standard RIP. It died as a practical matter at the end of the 19th century and lingered on in the minds of some government officials until the mid 1960s. Not even that many right wingers harp on it these days, which leads one to wonder why a liberal, who professes to want better things everyone, especially the poor, would want to make life worse for everyone except perhaps the mega-wealthy.
The coin business is not greatly regulated. This seems to suit many members of the forum; it may also increase the chance that the few (?) that use this lack of oversight to disadvantage (cheat) the less sophisticated will do so. Most on this forum espouse strong ethics and hate to see others hurt, we disagree how to accomplish this lofty goal. Sometimes those that have emotional ties to the freest of markets lack the skills to survive in them.
Macro-ecconomic strategies are always a great topic for debate; sometimes those participating in the debates have only a vague understanding of the issues. This makes for very interesting debates which are not always enlightening.
However he is on a jihad against our financial markets. With few exceptions, most people who lost lots of money in the financial markets were victims of scams and hype. The perpetrators of such fraud for the most part a) did time in jail b) are being tried currently, or c) are doing time now. All you need to do is read the occasional Wall Street Journal to be aware of this.
Roadrunner, I'm still waiting for my S & P 500, total stock market index, etc., to go south, as you have been stating as a fact for I don't know how many years. I pay no commissions, no account maintenance fees, and I'm investing in some of the most solid companies on the planet.
BTW, how has your gold been doing lately? What kind of commission / mark up are you paying on your rare coins, many of whose prices have been manipulated by insiders? How do you like those Bust Dollars?
"Seu cabra da peste,
"Sou Mangueira......."
1. Crooked business executives who “cooked the books” in order to fatten their bonus checks and other compensation.
2. Incompetent CPA firms that did not do their job. Harrah for the fact the worst major CPA of them all, Arthur Anderson, went bust. THEY DESERVED IT!
3. Stupid investors who flock like lemmings to drive up the price of stocks beyond the current and future earnings potential of the firms in which they “invest.”
If you lose money because of the conditions cited above it does not matter if the money is “fiat money” or backed by gold, IT’S GONE.
I don't know how Roadrunner feels about them but after essentially tripling my money on them, my assets went into other areas.
Sure was fun for years though. And if you are so enamored by the stock market, where do you find the time to break away from that "action" to come here and presumably talk about coins?
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
I've never owned bust dollars, always thought they were too common.
Having the stock of money (money supply) in a straitjacket, which is limited by the amount of a commodity (gold) that a nation’s central bank holds, is a recipe for booms and busts and generally hard times for small businesses and working people. All the gold standard does is to place a limit on the amount of money that can be in circulation at a given time. That can be a good or bad thing depending upon the amount of gold that is in a nation’s treasury. Why should a growing economy have its potential limited by the supply of ONE commodity, gold. Why is gold a god?
Gold keeps govt's honest, nothing more or less. The same boom and bust cycles you so dread are exactly what has been occuring since coming off the gold standard. And had our dollar not been the reserve currency of the world, those swings would have been far severe.
AND if it is perceived that a nation’s currency is worth less than the amount of gold for which it can be redeemed, there will be a “run” on the treasury, which will cause the system collapse in any case.
That's exactly why YOU DON'T print more money than you have backed by a tangibly linked assets. So devaluing the dollar over the past 92 years by 95% is a good thing to you. And not too coincidentally most of this has occured since severing the gold link.
Why as it severed? Not because it wasn't working but because the Europeans wanted our gold rather than our currency in debt payments. They were not foolish. The large amount of unsupported currency printed over the years has indeed given us a standard of living that upon the backs of the rest of the world. Do you think this will continue? Do you think our economy will continue to grow just by printing money and selling our debt overseas?
You have much to learn my fiat friend.
In recent years Alan Greenspan through the Federal Reserve as done a commendable job managing the money supply. What inflation there has been, has been caused by increases in energy prices, which have little to do with the stock of gold.
Inflation has nothing to do with rising prices per se. That's just one of the possible symptoms. Rising prices are often the result of increasing monetary supplies. That is inflation. You must learn the definitions. Prices can be stationary in many areas with massive inflation occuring. But yes, the result is eventually transmitted to higher prices. By continuing to borrow $2 billion a day from overseas or hedge funds, we've continued to "buy" cheaper imports and ultimately exported our inflation to other countries. Look around, you can see double digit inflation in Europe and Asia.
It will make its way back here.
As a fiat money supporter you are still a major proponet of out-of-control socialistic spending and therefore a "liberal." Without that unlimited fiat money cash cow, there could be no such spending.
roadrunner
What planet are you speaking about? The average guy got their shorts handed to them in workplace based 401k's. And I guess I may have to agree with you that the present 401k system is a scam just as pension funds are. And the perpretators of such fraud do not do any time in jail. I'd say the average guy in our 401k at work lost 30-50% of their 401k's on basic indexed funds...this was TR Price too...not Enron. Very very few of these perpetrators are being prosecuted and large amounts of their wealth are safely protected.
What do you think, maybe 1% of the scammers have been successfully prosecuted and funds recovered?
Roadrunner, I'm still waiting for my S & P 500, total stock market index, etc., to go south, as you have been stating as a fact for I don't know how many years. I pay no commissions, no account maintenance fees, and I'm investing in some of the most solid companies on the planet.
Keep that money there. You'll find that southerly direction before you know it. When the market corrects again, it won't matter how solid your companies are, they will head south together, though yours won't dive as fast. If you stay put as you say you do, you'll lose 1/3 to 1/2 of your S&P stake at some point. Just remember to hold for the long haul as most financial advisors still recommend.
The various financial markets are defying all logic and have been doing so for several years. I just look at all the mania as the bigger fool theory. Market cycles will eventually wipe out your gains if you leave it alone....they always have....same for coins.
BTW, how has your gold been doing lately? What kind of commission / mark up are you paying on your rare coins, many of whose prices have been manipulated by insiders? How do you like those Bust Dollars?
Gold is going through another multi-month correction, same as it has been doing since 2001. Is that a surprise? Will you be here on the next up leg to say how badly gold is doing? When the uptrend is strongly broken, I'll be the first to say so.
I pay little if any commissions on the coins I have purchased. Many of them have been purchased at wholesale levels. I buy and sell frequently. The few times I buy at "retail" are when the price guides are foolishly low. If I don't think I'm getting a coin at 0% markup to wholesale, I usually won't jump unless that piece has great long or short term potential. If my choices were to buy coins at 10-25% markups from the retailers I would be out of coins. The coins I am into (mostly 19th century choice/gem type) have not been manipulated to any great extent. If they were, I would look elsewhere. It's probably the lack of easy manipulation that keeps them currently out of favor with respect to registry type coins. But at the same time the nice ones have been quietly put aside while Registry fever rages. They will have their time.
3. Stupid investors who flock like lemmings to drive up the price of stocks beyond the current and future earnings potential of the firms in which they “invest.”
Unfortunately Bill this is the vast majority of the buyers out there.
Insider money has been exiting the stock market for some time now.
It's Mr. and Mrs. American that continue to plunk the money down.
But at least I can see that you and El Contador feel that you are in the 10% that consistently outperform and outmaneuver the market in general. Congratulations. Why are you then wasting your time beating yourself up in coins where all this rigging, high commissions, and grading problems all exist? It would be much easier playing in the unrigged game of stock and currency arbitrage.
roadrunner
roadrunner
THEREFORE COINS ARE AN INVESTMENT. That doesn't mean we can't enjoy them. That doesn't mean they have to be allowed in pension or 401-K plans to qualify as an ivestment. Remember, the Feds only want things in qualified plans that they can control, ie the stock market through the SEC or hard assets because it is tied to something other than subjectivity.
It is good that coins don't go into pensions because the only way they can be allowed in is with government controls. Can you imagine Uncle Sam's employees grading your coins?
Gripe all you want about grading services and their problems, believe me, they pale into insignificance when compared to whatever the government controls. At least we have some ability in an open market to affect what is going on...............by looking at what we buy and not overpaying for plastic.
But who got the $? The controling families of every major corporation got the surplus (capital gains + dividends), their employees got jobs and retirement funds--a major unresolved issue, in my mind more important than the New York Stock Exchange's general issues.
Social Security has the 95% along with foreign countries in the form of the debt that the US government and the various US government guaranty funds and corporations owes.
By the way, The United States of America is following the path of Argentina in which for 50 years Argentina staved off dealing with their financial mess of budget deficits and printing too much money so that they finally had to suffer over the past 5-7 years.
The US is living off the savings of the past but will someday deal with the new reality. The US is no longer the rich country it was back in the 1950's and we have 10 -15 years left of living off the savings of the Greatest Generation.
God bless America.