The Dollar and the Coin Mkt , hand in hand?

BrianKuszmar

Many times in history a countries currency that is not backed by hard assets loses favor with its populace. For an extreme example Argentinas massive problem with their currency at one point had it losing as much as 3% in one day. Of course the Argentinas rich saw this coming and many fled into quality liquid hard assets until the Govmnt caught on and froze wealthy accounts and gave them some kinds of promissary notes payable in 7 years. Argentinas middle class and poor would often immediatly after being paid convert the currency into ANYTHING they could buy. This included electronics, Jewelry, collectibles, you name it.

In the U.S. could one conclude that instead of holding onto cash Americans are looking for safe places to store wealth, could one conclude that this fairly quick extreme popularity and price rise in Rare Coins, Collectibles and other types of hard money assets could be a direct result of Americans feeling less comfortable sitting on cash and feeling more comfortable owning some type of commodity/hard assets like Coins/Collectibles?

Is it possible we are in a similiar but not quite as severe situation as Argentina was once not so long ago?

What do economist generaly call this state of affairs?

Interesting questions.

Regards to all

410a

Keynesian? or Classical or New Classical all agree.....Screwed.

MrEureka

could one conclude that this fairly quick extreme popularity and price rise in Rare Coins, Collectibles and other types of hard money assets could be a direct result of Americans feeling less comfortable sitting on cash and feeling more comfortable owning some type of commodity/hard assets like Coins/Collectibles?

No. Good times or bad, strong currency or weak, Americans don't sit on cash. Period. The strength in collectibles is simply the result of prosperity.

tradedollarnut

<< <i>could one conclude that this fairly quick extreme popularity and price rise in Rare Coins, Collectibles and other types of hard money assets could be a direct result of Americans feeling less comfortable sitting on cash and feeling more comfortable owning some type of commodity/hard assets like Coins/Collectibles?

No. Good times or bad, strong currency or weak, Americans don't sit on cash. Period. >>



Not sure I understand, Andy - our history is rife with examples of the American public hoarding specie.

Leiana

I would think that Gresham's Law might apply here, at least in part.

-Amanda

CarlWohlforth

Inflation is not bad -- it certainly shouldn't be compared to Argentina of the late '80s. Most Americans aren't saving anything. So there is not much to put into savings of any kind. There are some people who do have lots of money to spend and they do. Given my view the reply above I most agree with is Andy's.

Gresham's law is why people spend their old twenty dollar bills first and keep the new ones for last. It doesn't apply to people spending new twenties on a luxury (coins).

MrEureka

Not sure I understand, Andy - our history is rife with examples of the American public hoarding specie.

Rife? I don't think so. Certainly this happened in the Civil War. After all, whose paper could you trust? The next time that happened, to a far lesser extent, was in the inflationary burst of 1979-80.

Today, inflation is far tamer. Only Roadrunner and a handful of his buddies are running scared, although the truth is they're probably driven more by greed than by fear.

The vast majority of the population doesn't need to worry about inflation and a weakening dollar. They don't have a pile of cash. Instead, they have real estate, equities, and maybe a little cash in their retirement plans. They also have a fair amount of dollar-denominated debt, from which they will benefit if inflation kicks up. All told, they're well insulated from inflation. No need to bury bags of silver in the backyard.

elwood

I think the rise in value of tangible assets has more to do with:

-low interest rates (people are looking for a better return)

-normal inflation

-prosperity

-a bitter taste, in peoples mouths, left over from the equity market bubble

-diversification

-enjoyment

Bear

Americans have had a historical savings rate above 5%

although now it is a negative number. Since all of our money

is erzats, with no value other then the governments promise,

there is no good money to be forced out under Greshams Law.

The decreasing value of our money, static wages and increasing

price of goods is a prescription for disaster. It reminds me of the

final days of the Roman Empire, when the coinage was copper with a

mere wash of silver to make it look real. We are currantly living an illusion,

where all Federal statistics are manipulated, our biggest debt holders are

potentially our greatest enemies and the real debt including obligations for

programs is 44 trillion and growing. When reality sets in, that we are all living

on the 10th floor and the other nine floors as well as the foundation only exist

as virtual reality, there will be a harsh day of judgement.

The only defenses will be :

1. Low and fixed interest debt

2. Some cash reserves

3. Real assets such as rare coins, silver and gold

4. Reserve supply of canned foods and water

5. Reserve supply of maintanence medications

6. emergancy generator

7. First aid supplies

6. Firearms for home protection

7. A dog. Preferably smart, big, strong and protective.

8. Radio and lighting, with a hand crank generator
attached to charge the devices in case of power failure

MrEureka

7. A dog. Preferably smart, big, strong and protective.

How about a small dog that thinks he's big?

Deb048gold

I would say that if you are counting on "Moderns going up in value as an inverse
to a falling dollar", good luck!

Moderns will be more negatively impacted by a poor
economy than classic rareties and gold coins.

TWQG

<< <i>7. A dog. Preferably smart, big, strong and protective. >>

-There's only about a week of meals there.

Bear

<< <i>

<< <i>7. A dog. Preferably smart, big, strong and protective. >>

-There's only about a week of meals there. >>



OK, a big dog and a cat for a light snack.

BrianKuszmar

<< <i> The strength in collectibles is simply the result of prosperity. >>



This would be the other scenario, or perhaps a little of both could be true.

Regards

roadrunner

Only Roadrunner and a handful of his buddies are running scared, although the truth is they're probably driven more by greed than by fear.

Funny that you have acquired telepathic skills. If anyone operates on the "greed" principle it is the coin dealer's themselves.
We can laugh together in 5-10 years with the DOW at 36,000 and Gold at $175/oz. I'll have front row tickets to that show.

As far as inflation being "tame," that is only the case if you buy the BLS stats rather than think it through for yourself. A classic case of stagflation is rearing its ugly head. The core CPI will tend to stagnate, while the goods & services that really affect the populace
will show significant increases. Inflation measured under the "old" unadjusted CPI is running 6-8% per year. I don't think I'd call that tame. The numbers will be much higher when our Trillions of debt that we exported to Asia in the 1990's eventually shows up back on our shores. The day is coming. While now one knows exactly what is coming at us, I'm convinced that 99% of the population has underestimated the negative potential. It will be far more severe than anything seen in several decades. Remember that we've had a spoon-fed economy drunk on FED credit since the early 1980's. The landing won't be so soft and it won't be of short duration, not after 25 years. Joe Consumer has been brainwashed to believe in his own infallibility over the past few decades. If one consumes, he wins. This will be Joe's first wake up call to omnipotent Club Fed. There's little downside to being positioned to the hard asset side of things for the time being. $390 Trillion in derivatives did not exist in 1980-1982. Banks held back 10% of their assets back then, only 1% or so today. Leveraged-margined-credited to the max. Argentina may not be so bad after all.

roadrunner

eddyemack

The truth is that none of us know for certain what will happen. Do we rely on past history? These forums can be very informative until they get political. Maybe I'm just too bummed about how bad my steelers suck this year. Grrrrrrrrrrr!!! But I do wish everybody a nice holiday. And I pray to God to keep our brave troops safe.

Myqqy

TTT, just for the heck of it...

dlimb2

The United States was founded on blood and guts. Today the generation who experienced the Great Depression is dying by the thousands per day.this leaves the ones (US) who have grown up in a bubble cushioned by great prosperity of our parents and grandparents. They are the Generations which made this Nation Strong.Though most of the Greatest Generation and their parents were not highly educated during the great depression,one thing they had that I think OUR GENERATION does not have and that is survival skills.We have become dependent on Government and big corporations to make sure we survive.The Government gives us our Medicare and Medicaid and Corporations now grow our food.What happens to the Bubble Generation when Government and Big Corporations fail!
Much of our food no longer comes from this country, we have vast amounts of oil but no attempt at producing it.If we as a Nation were to become involved in a World War on our shores, my questions is how will we survive. I think today we have the Weakest Generation ever known to the United States.We have new Generations of immigrants who are Loyal to their way of life and do not conform to the American values, yet they Pledge Allegiance to our Flag eat our food and take advantage of our Medical care.These immigrants are in our Government, they have been teaching our Children for years with accents which could not be understood. It has come to a point where Americans are out numbered here on their own land and left with No survival skills what so ever. You think no one in Washington knew anything of September 11, 2001 before it happened.Think Again! I don't know if many of you know about or what is meant by the Cold War of the past decades, it is based on Spies and Espionage....It is a known fact that the United States has been infiltrated with foreign agents who have lived here and given birth to their children here which makes them American Citizens. They work among us as Americans and have a job to do for their Mother Country...and that is to destroy America and the American people. The FBI and CIA are not large enough to handle what has been done here, alone...You as an American can do your part to let the FBI and the CIA know anything you suspect is not right about people and organizations you come in contact with. It is your resposibility to help keep the United States Secure for we can not rely on the Government alone to do it. With your help we can put the United States back together again.

Coxe

Anyone have some tin foil handy?

1201reset

No tin foil here, just a good article on where to
get a better value on Gold.

Link