Inflation Impact on Coin Returns

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itsnotjustme
itsnotjustme Posts: 8,789 ✭✭✭
in U.S. Coin Forum

Have you ever considered the economic cost of holding coins across long periods due to inflation?

Quick Facts based on the CPI change.

The original $20 face of a 1904 Liberty Double Eagle would inflate to $529. While well below the value of a circulated piece today, the gain is far less than it appears at the surface.

$100 face of common silver in 1964 would have an inflation indexed value of $789 today. Again, below the melt value of $1,186, but a far lower gain than it appears on the surface.

And $100 of common wheat cents collected in 1964 looks like a big loss, as there is no realizable metal gain. The inflated value is again $789. I don't see 8 cents each for common wheat cents.

I know most of us have not held such coins for these periods, but someone has always owned all the coins still around today.

Link: in2013dollars.com/1964-dollars-in-2017?amount=100

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Comments

  • Insider2
    Insider2 Posts: 14,452 ✭✭✭✭✭
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    True collectors are not interested in appreciation. You cannot put a price on satisfaction, research, and enjoyment. In the past, some folks have done very well with coins.

    Even buying junk silver can have a purpose other than making a profit.

  • ctf_error_coins
    ctf_error_coins Posts: 15,433 ✭✭✭✭✭
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    I do not like inflation arguments as there is no accounting for a smart phones , internet connection, computers, high end digital cameras, etc .....

  • ricko
    ricko Posts: 98,724 ✭✭✭✭✭
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    Inflation is a numbers game... very real of course, but meaningless to the young and horrifying to the old. ;) Cheers, RickO

  • amwldcoin
    amwldcoin Posts: 11,269 ✭✭✭✭✭
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    Inflation = means for government to collect Capital Gains Tax!

  • ctf_error_coins
    ctf_error_coins Posts: 15,433 ✭✭✭✭✭
    edited December 4, 2017 9:49AM
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    So, my little plastic kayak that I bring out into the pacific ocean has a $500 Fish finder that has Sonar and also has GPS tracking tied into satellites. How much would that have cost me in 1964?

  • amwldcoin
    amwldcoin Posts: 11,269 ✭✭✭✭✭
    edited December 4, 2017 9:56AM
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    That's like comparing how much a hot woman costs when she is 20 vrs 60! >:)
    Tech advances are out the window when it comes to inflation. My 1st computer setup cost me over $4,000 in 1998. Better by far set up now would probably cost $12-1500.

    @ErrorsOnCoins said:
    So, my little plastic kayak that I bring out into the pacific ocean has a $500 Fish finder that has Sonar and also has GPS tracking tied into satellites. How much would that have cost me in 1964?

  • Overdate
    Overdate Posts: 7,318 ✭✭✭✭✭
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    @Insider2 said:
    True collectors are not interested in appreciation.

    Some are and some aren't. A person doesn't have to be a "purist" who totally disregards the coin marketplace to be a true collector.

  • Overdate
    Overdate Posts: 7,318 ✭✭✭✭✭
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    In 1964 a BU roll of 1950-D nickels cost $1,200. That's $10,000 in today's dollars. Today it costs about $300. In real terms it has lost 97% of its 1964 value.

    In 1980 a common-date BU roll of Walking Liberty halves cost $4000. That's $12,000 in today's dollars. Today it costs about $500. In real terms it has lost about 96% of its 1980 value.

    The coin market can be just as prone to bubbles as the stock market.

  • Peace_dollar88
    Peace_dollar88 Posts: 1,256 ✭✭✭✭✭
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    Interesting!

  • rooksmith
    rooksmith Posts: 1,438 ✭✭✭✭✭
    edited April 12, 2022 2:41PM
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    And $100 of common wheat cents collected in 1964 looks like a big loss, as there is no realizable metal gain. The inflated value is again $789. I don't see 8 cents each for common wheat cents.

    IMHO wheat pennies in low grade that are worth only melt values have not kept up with inflation. Rarity and scarcity seem to be the only thing worth collecting. Hoard the Keys! and hopefully the Mint will stop making the awful zinc-filled pennies in 2023, which should make people think about cashing them in for their melt value. That would be good for coin collectors, and might just reignite the popularity of trying to complete a mint/date set of Lincolns.

    “When you don't know what you're talking about, it's hard to know when you're finished.” - Tommy Smothers
  • rooksmith
    rooksmith Posts: 1,438 ✭✭✭✭✭
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    @amwldcoin said:
    That's like comparing how much a hot woman costs when she is 20 vrs 60! >:)
    Tech advances are out the window when it comes to inflation. My 1st computer setup cost me over $4,000 in 1998. Better by far set up now would probably cost $12-1500.

    huh? ;-) :D

    “When you don't know what you're talking about, it's hard to know when you're finished.” - Tommy Smothers
  • MasonG
    MasonG Posts: 7,591 ✭✭✭✭✭
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    @Insider2 said:
    True collectors are not interested in appreciation. You cannot put a price on satisfaction, research, and enjoyment.

    From someone with over 14,000 posts? If you say so. :)

  • Unknown
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  • Unknown
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  • JimW
    JimW Posts: 617 ✭✭✭✭
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    @Insider2 said:
    True collectors are not interested in appreciation. You cannot put a price on satisfaction, research, and enjoyment. In the past, some folks have done very well with coins.

    Even buying junk silver can have a purpose other than making a profit.

    I recently bought a Washington 25c album (silver issues) that was about half full (39 coins I think). I went to my junk silver quarters and filled 26 more holes :)

    Successful BST Transactions: erwindoc, VTchaser, moursund, robkool, RelicKING, Herb_T, Meltdown, ElmerFusterpuck, airplanenut

  • cameonut2011
    cameonut2011 Posts: 10,923 ✭✭✭✭✭
    edited April 12, 2022 6:06PM
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    It means coins will be even worse investments. Prices likely won’t keep up with inflation even if prices rise nominally and you may have capital gains taxes to pay to boot. Factor in high auction house fees, and you eat up much of the sales price.

  • Catbert
    Catbert Posts: 8,258 ✭✭✭✭✭
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    5 year old thread

    Seated Half Society member #38

    "She comes out of the sun in a silk dress,
    running like a water color in the rain...."
  • jmlanzaf
    jmlanzaf Posts: 43,072 ✭✭✭✭✭
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    @Catbert said:
    5 year old thread

    But still relevant. Personally, I appreciate people resurrecting threads rather than starting redundant threads.

    All comments reflect the opinion of the author, even when irrefutably accurate.

  • Catbert
    Catbert Posts: 8,258 ✭✭✭✭✭
    edited April 13, 2022 7:02AM
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    I'm cool with it too, but it is nice if the resurrector would add to the discussion AND note that it is an old thread renewed.

    Seated Half Society member #38

    "She comes out of the sun in a silk dress,
    running like a water color in the rain...."
  • ms71
    ms71 Posts: 1,695 ✭✭✭✭✭
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    @Insider2 said:
    True collectors are not interested in appreciation. You cannot put a price on satisfaction, research, and enjoyment. In the past, some folks have done very well with coins.

    Even buying junk silver can have a purpose other than making a profit.

    I wouldn't say that lack of interest in monetary appreciation makes one a "true collector". I learned after paying substantial "tuition" in this hobby, that what I really wanted was the enjoyment that came from ownership; not the prospect of monetary gain. I certainly can't claim to be any "truer" a collector than anyone else.

    Successful BST transactions: EagleEye, Christos, Proofmorgan, Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins, justindan, doubleeagle07

    Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't an optical illusion, it only looks like an optical illusion.

    My mind reader refuses to charge me. . . . . . .

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