Do you think that the cost of Food prices will have an effect on the Foreign coin markets?
ormandh
Posts: 3,111 ✭✭✭
How do you see this affecting collectible coins as for liquidity is concerned? Do you foresee a dip in the market long term or do you think that rarities, in general, will not be affected? I am just curious. Any thoughts or insights from you collectors' outside of the US? -Dan
0
Comments
I, personally, think that we are in unstable times and it will get to the point where the hobby will suffer, but I am not so sure how much it will change the hobby as it pertains to the casual collector. I feel that more product will surface as more people have the need to makes ends meet, so to speak, and flood the market with coins that will not bring a premium. -Dan
As for the question, not yet, but it may in the future. When food prices get high enough that, government subsidies and aid are not enough to get enough food to the lower 40% that live on $2 USD a day or less, that's when it will get crazy bad. That's when that poor 40% will do anything to get food, and won't care if they get shot or not, when their other choice is slow starvation.
It is difficult to say if this will be a positive or negative for the relatively wealthy 1% or 10%, that collect coins and those coin markets. Many of the relatively wealthy are insulated from the conditions and may not even live in the countries that go through difficult times. For those in the countries, it won't be happy times.
FOR SALE Items
BTW----Did you know that 35% of the corn grown in this country goes to the production of ethanol? Talk about taking food from the mouths of babies.
Knowledge is the enemy of fear
I foresee US market collapsing given inflationary pressures and unemployment. World coin market expanding and appreciating in $ denominated value given the depreciating dollar value, especially with the advent of the Internet and easier payment methods.
The net effect for darkside is positive. US market I see a long recovery path.
<< <i>US coins are mostly collected by US collectors. World coins, by a global collector base. US coin prices inflated, World coin prices much lower. No parity in value for similar rarity scale coins. Emerging markets bring new collectors (Asia, Middle East, Latin America) which did not exist prior.
I foresee US market collapsing given inflationary pressures and unemployment. World coin market expanding and appreciating in $ denominated value given the depreciating dollar value, especially with the advent of the Internet and easier payment methods.
The net effect for darkside is positive. US market I see a long recovery path. >>
This makes sense, but do you think that the emerging markets will strictly focus on their own coinage? Or might it be the case that they could/would branch out into the US, British, etc.. coinage?
I am seeing foreign collectors buy beyond their own country's coins. That is my working hypothesis which is currently supported by the expansion of the world coin sales/auctions (and prices) in the past few years. Just track the Heritage World Auction figures and you can witness the expansion.
<< <i>I am actually not talking about starving people. My main point is that the cost of food has risen 25% since last year and is only going to rise more, especially before the summer. My main point is for the middle people(I guess I am not talking to the Richie Rich's in the bunch), the people who have limited expendible cash. For instance, if my grocery bill is $500 a month and it is 25% more for groceries, then I will spend $125 more per month on groceries. If my household budget allows for $150 per month on coins, then I am not going to be able to afford the purchase of my monthly coin(s) with the rising price of food costs. >>
I think you are putting over a very americentric veiw, assuming there is such a word. Coin collecting in the US is very different to the rest of the world. We tend not to suffer from slabinflation outside the US so the dips have less effect. As to spending power these last couple of years of the down turn my spending power has increased dramatically mainly due to the very low interest rates, mine and many with mortgages have seen our housing costs more than half freeing up hundreds of pounds. And as to food prices personnally they only represent about 15% of our incom, so a 25% rise although irritating is hadly going to stop me buying that rare coin I need to fill a gap.
Gazza
Experience the World through Numismatics...it's more than you can imagine.
<< <i>I am actually not talking about starving people. My main point is that the cost of food has risen 25% since last year and is only going to rise more, especially before the summer. My main point is for the middle people(I guess I am not talking to the Richie Rich's in the bunch), the people who have limited expendible cash. For instance, if my grocery bill is $500 a month and it is 25% more for groceries, then I will spend $125 more per month on groceries. If my household budget allows for $150 per month on coins, then I am not going to be able to afford the purchase of my monthly coin(s) with the rising price of food costs. >>
Coin collectors tend to be upper income or at least upper middle class folks. In the U. S., it is mostly the top 20% in income that drives the coin market. I'd expect it to be similar in most other countries where people collect coins. The lower income person or even middle income person may collect, but their purchases are likely a relatively small percentage of dealer traffic. In the U.S., food is about 14% of the overall budget for the middle income family. For those with above average incomes is it more like 5% to 10%. So even a 25% increase in that budget item, is only 1% to 2% of overall income. That may make a difference at the margins, but not a big one. Perhaps, in countries where food is much more expensive (the U. S. has relatively inexpensive food), it may have a bigger impact. Still, the main point that I and others are making, is that coin collecting is an upper-middle class hobby.
Where it may have a big impact is political instability in countries where the poor start rioting because they can not afford to eat, or not enough food is imported to feed the masses. Governments will fall or go totalitarian. Coin collecting tends to disappear as an activity in countries with those kinds of political conditions. However, again, these are mostly poor countries that don't get a lot of attention from world coin collectors to begin with.