Structural change in darkside coin market coming?

cladking

This is so painfully obvious I'm not sure why it has mostly escaped me and
I've seen almost nothing written on the topic. The demand for world coins
has mostly always been centered in the United States though many countries
have long had fairly vibrant markets for their own coins. Only in the US has
there been enough of a middle class to create demand for many of the world
issues.

As we all know, in the last several years there have been exploding wealth
in countries like India, China, and Russia. We're seeing exploding demand for
coins from many countries which have been growing in recent times.

But most world coin collectors started with the US coins and after some years
of maturation branched into darkside. Isn't this likely to happen with foreign
collectors in the future? Aren't Indian collectors going to start looking for Bru-
nei's coins in a few years?

This could have profound effects across the board before many years are past.

JZrarities

Very Intelligent Postulation.

(and I totally agree)

Now please continue your thoughts, and list some of the countries that you think will benefit the most:

1)
2)
3)

When do you think Latin America will benefit?

sinin1

The demand for world coins
has mostly always been centered in the United States though many countries


I disagree with your main premise

that USA is epicenter for collectible coins

MacCrimmon

Well, my own self-serving interests are rooting for "Empire"........

The Indians, Hong Kong (Chinese), Aussies, Kiwis, etal., all collecting the Mother Country, England!!!


In evidence, I submit one Lakshmi Mittal

ormandh

I absolutely agree. I collected US coins until, I realized that I could buy really nice low mintage, high quality coins from other countries for less. I think that a lot of the lower mintage coins from the 20th century will definitely be the winners in the game. I find that most are undervalued as compared to their US counterparts. JMHO. -Dan

cladking

<< <i>Very Intelligent Postulation.

(and I totally agree)

Now please continue your thoughts, and list some of the countries that you think will benefit the most:

1)
2)
3)

When do you think Latin America will benefit? >>



These are all tough calls. I was thinking about this while looking at a nice gemmy
1967 Tongan 20 S. This coin had a mintage of 150,000 and there were no official mint
sets produced. The coin might have been well saved or possibly almost every one
went into circulation and degraded before they were melted. It's hard enough to get
this kind of information for major countries but for places like Tonga it's nearly imposs-
ible. Whatever the case it seems certain that any real increase in demand could lift
the price far higher than its current $3.50.

Some countries that should benefit are pretty obvious. Things like Indian States or
British should be beneficiaries. Most Pacific rim countries should strenghten. Africa
will start slow but in twenty years could be red hot as it and surrounding areas im-
prove and people all over are looking for something a little different. Brazil should do
well and this should extend to Portugal and other Portuguese speaking countries.
There will be other countries with strong economies in South America like Chile and
they'll tend to support regional areas.

Even the old European colonial capitals will often get interest from their former colo-
nies as some of them will have strong economies. Much of Africa is still a basket case
but for much of this continent all the trends are going the right way finally. Some of
the growth rates are already astounding.

It's not difficult to foresee a quadrupling of demand for most world coins in the next
twenty years and some should do significantly better. The effect on price will be great-
est where current supply is close to the current specific demand. This will be dramatic
on something like an XF 1895 South African 1S since there are not a lot of coins in low-
er grade to absorb increased demand when collectors can't afford increased prices. It
might also apply to many coins that are almost exclusively collected in unc because most
collectors won't collect a modern series like Swiss cu/ ni francs in circulated grades. They
would be more likely to be driven to another series. Obviously collector behavior may
change.

One has to wonder how prices for coins with virtually no demand and a very low price
would respond to dramatically higher demand. This would apply to many seemingly com-
mon Latin American coins that have been melted in hugh quantities over the last couple
decades but it also applies to older Latin American coins and may of these from later
years in unc. Peruvian brass soles can be elusive in nice condition. Guatemalan cu/ ni
is probably pretty scarce in unc and much scarcer choice. Paul Greene always claimed
the Costa Rican coins were almost impossible in unc as were many of the moderns from
this area. The poor people couldn't afford to set coins aside until they were devalued
by inflation and by then they were in horrid condition. The balance would then be melt-
ed to make Toyotas in Japan. The rich people had no interest in recent coinage.

These are just a few thoughts and I'm sure I've overlooked a lot of the implications if
this comes to pass. There's already a lot going on in these markets. It's hardly unusual
to see coins that I've been seeking for years (and usually not finding) go up over a hun-
dred dollars, and increasingly, over a thousand dollars. One has to imagine that this is
going to generalize and spread while the rarities continue their rapid advance (with fall
backs after new levels are achieved).

It will be fun to watch.

cladking

<< <i> The demand for world coins
has mostly always been centered in the United States though many countries


I disagree with your main premise

that USA is epicenter for collectible coins >>




I've seen it claimed that in the 1950's that 90% of world coin collectors were US citizens. This
number was meant to exclude anyone collecting only the coins from his own country. This num-
ber is probably too high but it's hard to believe that countries with almost no middle class had
many world coin collectors. In the '50's about 40% of the world's middle class was in this coun-
try and it was here that there was an infrastructure for trading these coins.

I don't know but the I accepted the premise as apparently mostly true.

I do know for a fact from years of corresponding with collectors in other countries that they often
don't even have ready access to their own coins, much less those from far off places. There just
weren't coin shops in most areas. Here there's a coin shop in every town with more than 50,000
people.

ormandh

I went to the International coin show in NYC in January and was surprised at all of the heavy hitters with laptops and heavy accents. My first coin show, but was surprised at the presence of international buyers. -Dan

coinkat

It is already here... just not fully developed throughout the globe.

Aethelred

Based on my eBay sales I believe you are correct.

I have been an eBay seller for about 10 years. During the first several years on eBay, less than 10% of my sales were outside the US and of those the vast majority went to Europe. However, about 40-50% of my sales are to overseas buyers. Buyers in Asia, Latin America and even the Middle East have become common.

FilamCoins

Hey CK, what do you think about the 1963 NZ Florin or the 1961 Half Crown as sleepers? I'm hopeful .....

wildjag

I am hoping that the Chinese, with new found wealth, buy all the counterfeits being made in China and that way they don't make it here

cladking

<< <i>Hey CK, what do you think about the 1963 NZ Florin or the 1961 Half Crown as sleepers? I'm hopeful ..... >>




I prefer the half crown.

The low mintages on these is very attractive but the older coins were more lightly saved.

You might ask here.

newsman

A couple of observations:

1. There seem to be very few collectors in Brazil (though there is a growing number of U.S. collectors interested in Brazilian coins) and that's not likely to change in the near future, since the number of people who can actually afford to collect coins is a very small share of the population and isn't growing as quickly as similar groups in Asian countries. I suspect that's true for much of the rest of South America as well. Still, the relatively small mintages, frequent currency changes (and subsequent withdrawals and melts), along with attrition and climate factors mean most Brazilian coins are much scarcer than commonly realized in choice condition. It won't take much increase in demand for prices to jump.

2. A lot of the interest in African coins that has driven prices up seems to be coming from dealers and collectors in China.

Zoins

<< <i>2. A lot of the interest in African coins that has driven prices up seems to be coming from dealers and collectors in China. >>

They need something to build casts from?

SYRACUSIAN

In my experience Greek collectors buy exclusively Greek coins. Most of the newbies do not even collect Ionian islands and some will never do. They consider it British with Greek letters, but by the same logic, early 1833 to 1857 coins are Bavarian and French for the second half of the century, both bearing Greek letters. Still, it's the British authority and the high prices that contribute to its esoteric reputation by some local collectols in my opinion.European collectors will deal with other countries, only if there have been previously a colony or a state that was governed even shortly ,but enough to mint coins to not let history forget, by their own country. There are plenty of them, Spain, Italy, Britain, Germany, Portuguese, Dutch, and many more. Greeks buy Cypriot coins,and vice versa, albeit not much,and we see the same with Russians buying Finnish and Polish coins, and Chinese buying indeed various stuff except of their own rarities.

Still, the best such ones I've seen are in the hands of a Darksider.

Stork

<< <i>Chinese buying indeed various stuff except of their own rarities >>





<< <i><< 2. A lot of the interest in African coins that has driven prices up seems to be coming from dealers and collectors in China. >> >>




I was wondering about that...I saw this auction for a nice little Albanian coin--I didn't check Krause or anything, but unless the 1926 is a rare one (I have a 1927), then this just looks like a nice coin, without any 'scam' factor other than the fact it is coming from Beijing. Perhaps China will have their own 'darkside' bent?

MrEureka

The internet is making the world a smaller place and blurring national borders.

Global wealth is increasing geometrically and spreading quickly.

The implications for the world coin market are clearly bullish, especially for countries that are not yet popularly collected.

IMHO, the market for these coins is not yet skyrocketing only because it's so difficult to spend "big money" on the best bets. In other words, it doesn't pay for a dealer to spend his time building a speculative position and promoting the market. At least not yet.

cladking

<< <i>The internet is making the world a smaller place and blurring national borders.

Global wealth is increasing geometrically and spreading quickly.

The implications for the world coin market are clearly bullish, especially for countries that are not yet popularly collected.

IMHO, the market for these coins is not yet skyrocketing only because it's so difficult to spend "big money" on the best bets. In other words, it doesn't pay for a dealer to spend his time building a speculative position and promoting the market. At least not yet. >>



...And how does one build a speculative position in something like Tongan coins? Few
of the toughest pieces are seen and then they'll usually cost only a dollar or two. It's
simply impossible to locate most of the best coins.

I latched onto every XF or better Greek drachma I saw for two decades and probably
didn't spend $50. Even today with prices up fifty fold they still tend to be far under most
radars. I doubt I've gotten a new Tongan coin in twenty years except for commoner mint
and proof sets.

I'm sure you're right that when the market matures and the coins are available a few
clicks away for most people that it will be much easier to acquire and promote such coins.
But what will something like a nice gem 1968 Japan 100Y sell for then? There are lots
of world coins from the last couple hundred years that just aren't seen and some of
them are dirt cheap.

It's just mind boggling to picture a huge increase in demand especially where demand
will be for coins that never really had demand before. Very few people will be able to
collect NZ cu/ ni shillings in unc simply because a mere handfull exist. The same applies
to the South African silver of the 1890's. The demand for some nice attractive XF coins
could increase fifty or eighty fold driving the price higher and much of the demand down
to VF or lower. The supply and demand for most Muslim countries appear to be weak
as well with the exception of silver coinage.

I get the sense that a lot of current demand is non-specific; people aren't so much look-
ing for a specific type or date as a country or era. They need very few specific coins so
they can be very price sensitive. While homeland demand will generally be more spec-
ific it remains to be seen how the typical foreign newbie collects other darkside.