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Long Beach/ Katrina/ and Gas Prices

Long Beach/ Katrina/ and Gas

Lets have some opinions on how the Katrina disaster and $5 gas will affect the Long Beach auctions in the next 3 weeks.

Will collectors decide it is time to pull in their horns and save cash?

How many will travel to this event given the price of gas will no doubt run $3 to $5 a gallon in CA.

With nearly one million new people out of work due to the storm, and 500,000 homeless change the psychology of the country to ultra conservative?

If Long Beach is a flop will dealers all over the country begin to unload coins that have reached all time high prices?

Will collectors and investors in LA, AL, MIS, and parts of Florida unload coins to secure cash to rebuild homes and businesses?

How many coin collectors and investors in these disaster areas that had small to medium sized businesses are now OUT of business?

How many mid-sized collectors will put their hobby on the back burner as they see prices of goods across the board begin to rise as fuel transportation costs increase prices, and they are looking at double utility costs for fall?

If the coin market breaks downward will wealthy investors also step to the sidelines waiting for the market to settle and dealers to get desperate dropping high end prices?

Comments

  • PerryHallPerryHall Posts: 45,296 ✭✭✭✭✭
    I think it will definitely put a damper on both the show and the auction. It remains to be seen how much.

    Worry is the interest you pay on a debt you may not owe.

  • MadMartyMadMarty Posts: 16,697 ✭✭✭
    I think Long Beach will be OK, only because it hasn't sunk in yet. If gas goes back down down things will be fine. It's when the price of everything else starts going up because of the cost of fuel then the coin market will suffer. When a gallon of milk hits $5 because of transportation costs, and everyone's expenses double then the dealers will be feeling it.
    It is not exactly cheating, I prefer to consider it creative problem solving!!!

  • Marty,
    I just wonder how long it will take for the psychology of what is happening to take hold?

    Forget about SUV’S, the cost of bringing milk and bread to market is what eats up the fuel, and the cost of everything is going to start increasing week by week. Look at this article from Forbes yesterday. How many collectors can keep adding to their hobby with daily necessities busting their budgets?


    FORBES
    Robert Malone, 08.31.05,

    NEW YORK - The price consumer’s pay for a gallon of gasoline at the pump dominates the news, but what about the truckers who haul everything from milk to clothing to new cars?

    Every time the cost of diesel fuel goes up 10 cents per gallon at the pump 10,000 truck companies in the U.S. fold.

    Since last year, the price for a gallon of diesel fuel has gone up more than 40 cents. That's a lot of companies going belly up.

    The danger of a widespread U.S. logistics breakdown is here and staring us in the face. Hurricane Katrina will not help. It will exacerbate an already bad situation in the refining process, one quarter of which is located in Katrina’s area of devastation.

    Truck capacity is stretched; U.S. trucks now use about 21% of ALL fuels the country consumes and are using a greater percentage of available fuel each year.

    The continued fuel crisis is fuel for thought. Retailers and shippers will have to look at their expense sheets and figure out how they can operate and to whom they will pass on the rise in costs. Someone will pay, or consumers will not receive the goods
  • 291fifth291fifth Posts: 23,898 ✭✭✭✭✭
    It wouldn't surprise me if some consignors try to pull their consignments before the auctions begin. It's going to be grim.
    All glory is fleeting.
  • Gas has been around $3.00 in California for some time now.

    It seems the hardest hit on gas prices thus far has been the Central and Eastern States.

    I would think a lot of people who are going have their reservations in place will still come.

    Granted someone coming from LA or MISS might have a change of plans.

    Even if one doesn't go to Long Beach I think Heritage does a decent job with bids on the internet. I think you might even watch it live on your computor.



  • ScarsdaleCoinScarsdaleCoin Posts: 5,179 ✭✭✭✭✭
    Katrina will have a huge impact not on the coin market but on the entire US economy...it will be a ripple effect and will happen over the next few years.....image
    Jon Lerner - Scarsdale Coin - www.CoinHelp.com
  • Anyone that is, or has been, in the manufacturing business knows that for rough numbers calculating the price of a product you can use 33% for shipping raw and finished, 33% for packaging, and 33% for the product itself. When the price of diesel doubles and the cost are passed through, a nearly 10% increase is passed on. So if there are no current changes to the current fuel prices we might expect a ten percent price increase across the board on all products.

    Gas hit $3.00 for premium this morning in Texas, up from $2.49 two days ago. When the prices go up like this in Texas the folks in CA and NYC are really in for a jolt.

    These comments are of course not just about the coin market, but the economy in general.
    After one of the guys in my office filled up his truck this morning and it was $75, he came in the office and cancelled all three of his families cell phones.
  • LongacreLongacre Posts: 16,717 ✭✭✭
    I am not sure what the long term effect will be on the coin market, but I definitely think that people are feeling the higher prices. I filled my Pathfinder last week and it was $50. Then I filled my wife's minivan and it was $47 (these are based on gas prices in CT). Therefore, almost $100 just on gas. Last year heating oil was 1.69 per gallon. This year I locked in with my provider at $2.35. My oil tank at home holds 600 gallons, so each fill up (around every other month) is over $1400. It's outrageous. I don't think I will go broke, but it definitely cuts into the discretionary income that I have at the end of each month.
    Always took candy from strangers
    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)
  • mozinmozin Posts: 8,755 ✭✭✭
    There are lots of people in the storm area that are now without jobs but actually I think the storm has created the need for many more jobs to clean up and rebuild the damaged area. These jobs will be low paying unskilled jobs as well as better paying specialist jobs so anyone wanting work should find work.

    There will no doubt be many coin collections sold by victims of the storm but I am not sure if this will amount to enough sales to make much of an effect on the overall coin market.

    Coin prices could drop somewhat because people in the US do not have as much money to blow on coins after paying their increased cost of living bills. It is also likely many coin buyers will wait to see whether or not coin prices drop so they can get bargains in the months or years ahead. I am one of those people that will be hesitant to bid high on auctions thinking I can win the lot next time around because the reserve will be lower in the next auction try to sell.

    I don't think the fuel problem will change the number of dealers attending Long Beach, except for the Southern dealers that are actually in the storm area.

    I expect this Long Beach to be slower than earlier expected and I do expect auction bidding also to be a bit slower. Since consignor place reserves I don't think lots will be yanked by consignors. Big ticket lots will not be much affected.
    I collect Capped Bust series by variety in PCGS AU/MS grades.
  • jcpingjcping Posts: 2,649 ✭✭✭
    There are always three tiers of coin markets, less than $500 per coin, between $500 to $5,000 per coin and over $5000 per coin segments.
    The increasing of cost of living will impact the sub $500 market,
    the job market and stock market will impact the between 500 to $5,000 per coin market, and
    the global economic and Ohio coin fund case could impact over $5000 per coin, IMO.

    It is very difficult to lump all coin market segments into one to discuss.
    an SLQ and Ike dollars lover
  • Gas has been at over $3 a gallon here in California for a while now, and it hasn't really affected many coin shows. I'm sure that Long Beach will be a great show. I'll try to make it this time.


  • << <i>Gas has been at over $3 a gallon here in California for a while now, and it hasn't really affected many coin shows. I'm sure that Long Beach will be a great show. I'll try to make it this time. >>




    People from other states not used to $3+ gas might hesitate to make the drive to the show. You also
    have the factor of higher prices reflected in areas other than just gas putting a possible strain on
    peoples budgets.
  • HalfsenseHalfsense Posts: 600 ✭✭✭
    The light rail system that conveniently serves the Los Angeles metro area has a major stop one block from the Long Beach Convention Center (100 S. Pine Ave.). Anyone who wants to save gas easily can get to and from the show via public transportation.

    -donn-

    "If it happens in numismatics, it's news to me....
  • coinbufcoinbuf Posts: 10,713 ✭✭✭✭✭
    I'm guessing Long Beach will see lighter than expected numbers but the shows latter this yr on the east cost will see the most effects IMO. By then the higher cost of gas will have been passed on to the consumer reducing the discrecinary funds avalible. I'd also agree with jcping that most of this will inpact coins under 1K, coins costing over 1K are generally bought by those with deeper pockets.

    Chris
    My Lincoln Registry
    My Collection of Old Holders

    Never a slave to one plastic brand will I ever be.
  • Perhaps, just perhaps, we really are in a 10 year run-up on commodity prices that started around 2002.

    The CRB hit a new high today.

    http://quotes.ino.com/

    My humble guess is that gold and silver coins can get uncompressed and really escalate
    from now until the end of the year - then about 7 more years, too.

    A=See Jim Rogers book: "The Adventure Capitalist"

    After all his partner was Geo. Soros who took the English for 2 billion dollars while he was FOLLIN' around.
    TWO billion. TWO thousands of millions.


  • I agree, when people realize they don't have enough for bread and milk and other essentials, the sale of coins will start to decline. There may be some dumping on the market by dealers and collectors needing to liquidate some of their holdings just to get along. I don't know if it will happen right away but maybe a little slower as gas prices riseimage
  • The effect of katrina and $3+ gas on the long beach coin show?
    gas has been already over $2.60 here for almost a year. Diesel already was over $3.
    Katrina and gas will have only the very slightest effect.

    All the chicken littles run around saying the sky is falling.
    All the big bad wolfs also agree since they comfort the little chickens and relieve them of their coins and more.
    All the whiners should sell now before its too late.

    These are the same people that say were in a real estate bubble.
    And have been for the last three years.

  • Thanks for all your comments, in just a few weeks we will certainly have our answer.

    Personally I am not sure we will see lots of unloading by collectors even if we do hit a big bump in the budget road. That said this does not mean continued buying. Most coin collectors seem to be a little more frugal and cautious with their money that average folks, so it is not that they may have to sell, it may be that they must just stop buying.

    As far as the psychology goes I believe that if dealers are forced to unload and a panic seems to be coming even in the lower ranges many wealthy investors may just slow down for a while to see where things settle. We have already determined that the vast majority of dealers just cannot pay the bills selling only RARE coins, and their costs are going up also, just think of their added fuel costs traveling to shows.
  • coppercoinscoppercoins Posts: 6,084 ✭✭✭
    Gas was $2.37 a gallon when I left here three days ago for a 1,400 mile round trip to Indiana to pick up a collection I purchased. While gone I saw gas jump 40 cents a gallon overnight at one gas station - and when I returned home, $3.19 a gallon at the same station I had filled up at for 80 cents a gallon cheaper three days before.

    I fear for the market as a whole. I fear for this country as a whole. When gas is at $5-$7 a gallon - if you can get it at all - and milk is $4 a gallon, sugar at $3 a pound...coins will be a VERY back-burner issue for everyone except those of us who counted on them for a living.

    I, for one, am considering giving it all up and getting a tech job back. At least there would be some income to the house that doesn't count on a collectible and the discretionary income of others.
    C. D. Daughtrey, NLG
    The Lincoln cent store:
    http://www.lincolncent.com

    My numismatic art work:
    http://www.cdaughtrey.com
    USAF veteran, 1986-1996 :: support our troops - the American way.
    image
  • orevilleoreville Posts: 11,772 ✭✭✭✭✭
    Personally, I think people will be more apt to cut out their eating out as it now involves higher prices and higher gas prices.

    As people stay at home more than ever before (even movies theatres will be hurt) then one would think that the coin hobby will be hurt as well.

    But we are forgetting one thing.

    The internet.

    The internet will keep the hobby quite alive and strong. If anything, coins might even see an incredible surge! People might realize that spending money on the hobby of coins is not throwing your money completely away and there is some residual value of what you have after making purchases of coins. In my opinion, low premium value coins like circulated buffalo nicks, mercs, walkers, wheaties, etc. might see some incredible price runs here as well.
    A Collectors Universe poster since 1997!
  • jdimmickjdimmick Posts: 9,583 ✭✭✭✭✭
    Gas reached 3.40 a gallon here this morning with lines at every station. Also, several of the stations have run out. Apparently a major pipeline has been temporarily shut down and created even more panic. The plant I was working today, many of the production workers who live on avg incomes have simply said that they can't afford to drive to work if the current price levels stay where they are. Today I heard from the purchasing department that many of the suppliers have alrerady tacked on additional fee's for poducts and supplies that the plants needs for production due to increased delivery costs. I think we will shortly see a major increase on all goods and services across the board. It will be intresting to see if this will affect folks discretionary income, income that most use to buy collectibles and such.

    jim


  • Yeah, $3 a gallon gas has already reached California.

    California has another problem with gas as we add extra smog-fighting chemicals (MTBE) so there is also a shortage of refineries.

    And if you come down to San Diego, the prices are even higher than LA. They explain the reasons for that to us, and we keep fillin' up.

    image
    My posts viewed image times
    since 8/1/6
  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭
    Blanchard, Jefferson and Stamford ( ? ) who represent a lot of retail business are gonzo for awhile.

    Gotta impact someone
  • stmanstman Posts: 11,352 ✭✭✭✭✭
    I personally think the market has been heading down regardless of gas prices and Hurricanes.
    And I do believe some of the dealers that continue to hype a "Hot" market will now be able to
    TRY and use these other reasons as an excuse.
    Please... Save The Stories, Just Answer My Questions, And Tell Me How Much!!!!!
  • dpooledpoole Posts: 5,940 ✭✭✭✭✭
    There remains the question of where to hide your money in anticipation of hard times.

    Sooner or later and more and more, foreigners are going to abandon the dollar, and quit propping it up.

    The stock market remains flat.

    Real estate in in a bubble for an array of reasons.

    Hard assets, bullion and collectibles are susceptible to manipulation, but remain a buffer against the falling dollar and eventual inflation because of high debt load. We may see "corrections" in the rare coin arena, but I still don't see a lot of places for baby boomers and their cash to run.
  • How much would gas cost for an SUV, fully loaded with slabbed coins, to drive from New Orleans to Long Beach?

    Would the driver make more profit selling the SUV or selling the coins?
  • CoxeCoxe Posts: 11,139
    The overall economic impact of a steep price increase on gasoline/transportation will affect us all profoundly and a big part of the coin market one would think. Basic collector coins would likely suffer. However, gold and investment grade rarities might be affected to the positive as just that, an investment alternative in an inflationary environment.

    As for Long Beach, specifically, it would probably be impacted. Higher airfares and inflation-driven hotel expense increases would make some dealers who do well enough oline and have no serious inventory needs consider taking a pass on Long Beach and similar shows. Others would still come, some sharing tables (and rooms) to keep the expenses down but still have access to the bourse for their own inventory needs. Local attendees probably wouldn't be put off so much. A day trip at twice the price per quarter isn't all that bad. If you are buying coins, it is pretty incidental anyway, marginalized by the expenses in purchasing. Carpooling with local coin club members might be a good idea to save money, in addition to greater security in numbers and someone to make the drive time pass better and get you into the carpool lane.

    Select Rarities -- DMPLs and VAMs
    NSDR - Life Member
    SSDC - Life Member
    ANA - Pay As I Go Member
  • michaelmichael Posts: 9,524 ✭✭
    gas will hit 4.50 a gallon within 18 months or less
  • clw54clw54 Posts: 3,816 ✭✭✭


    << <i>gas will hit 4.50 a gallon within 18 months or less >>


    I doubt it.
  • orevilleoreville Posts: 11,772 ✭✭✭✭✭
    I doubt it as well.

    I can see $3 to $3.50 but isn't that enough?
    A Collectors Universe poster since 1997!
  • BoomBoom Posts: 10,165
    Being from Oilfield Country, let me tell you....you cannot imagine the sheer # of drilling rigs that have drilled, hit oil and the wells that have been capped. We've been needing an alternate fuel source as long as I can remember.

    Our Dollar is controlled by Foreign countries. Think about commodities. How many things read "Made in China" etc. If the Far East wants to put the screws to us it will bring to fruition words said long ago......"We'll take this country over without a shot being fired." Remember that? Think about it.

    Who REALLY controls the American Dollar and just how much is our Dollar worth? We might THINK we are the leader of the Free World, but it ain't so, Jack. Who needs an Army when a strategic embargo will do us in?

    9-11 was only the beginning, the harbinger/ portent of things to come and when we're hungry, in gridlock/ lockdown, held prisoner as a Nation, coins and posessions won't mean a hill of beans. When it gets so bad that we're all stuck, held captive in our own homes and can't afford the basic staples of life, then and only then will we realize that this really IS a Grand Illusion. MARK IT! image

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