The market is always cyclical. Currently there are enough buyers driving prices up for the quality pieces. Advanced collectors know what they want and what is truly scarce.
With the advent of the grading services some 18 years ago, many coins are now holdered in high grades, but are lifeless, cleaned and ugly. There are truckloads of MS64 this and MS65 that, that every dealer has marked at retail prices but the coins are neither scarce nor worth the money relative to their true condition and eye appeal.
However, it seems to me that the run up in prices in 89' was due to mutual fund money trying to make coins a predictable commodity for trade and investment. Without extensive study and expertise, coins do not make good investments overall. As such, without the buying pressure from a large influx of capital coming from the mutual fund companies, I do not think those same conditions that caused the 89' runup are in place today.
Surely there will be a correction at some point, as the equilibrium between supply and demand changes to the supply side. What coins will be affected will have to be seen. Probably the more common the greater the correction.
As for the popular collector coins in the $500.00 and under range I don't think there will be any noticeable or adverse correction for that market.
The President claims he didn't lie about taxes for those earning less then $250,000 a year with public mandated health insurance yet his own justice department has said they will use the right of the government to tax when the states appeals go to court.
<< <i>Glad you enjoyed the cryptic answer. I should have worked for the Oracle of Delphi. >>
Might not have been a particularly good occupation for a "Bear" - those "Oracles" had a bad habit of sacrificing animals to the gods and then taking out their livers to see just what the Gods had ordained for the person paying for his "prophacy".
Hmmm - maybe we could predict this market with a few carefully chosen sacrifices
Collecting eye-appealing Proof and MS Indian Head Cents, 1858 Flying Eagle and IHC patterns and beautiful toned coins.
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” Mark Twain Newmismatist
How many billionaires are there reading this? How many foreigners stashing high grade proof gold in Europe? We buy MS63 barber quarters. I don't really care to hear about these insanely rich buying coins because they're bored with their other toys. I think the old saying "apples and oranges" applies here.
This is a little long, but an interesting article I took off the gold forum that makes perfect sense in relationship to our coin market.
The Greater Depression
Last week we discussed foreign currency crises and the increase in the US dollar exchange rate during the Nineties. Starting with Brazil in 1992 one currency crisis after another spread across the globe causing capital flight. Net foreign investment in the United States totaled thirty eight billion dollars in 1992 and increased to over five hundred billion dollars during the past four quarters. Cumulative net foreign investment since 1992 has been almost three trillion dollars. Most of this foreign capital found a home in US bonds, increasing US bond prices throughout the 1990s. Rising bond prices mean lower interest rates. The interest on 30-year Treasury Notes fell from an average of 8.61% in 1990 to 5.02% as of yesterday and the yield on 90-day Treasury Bills decreased from 7.75% to only 0.87% in the same period.Lower interest rates meant that corporate borrowing costs declined and that lead to an almost instantaneous increase in corporate profits. Higher profits justified higher stock prices and the thus the stock market bubble was born.The reduction in interest rates that stemmed directly from the influx of capital also caused an increase in corporate cash flows. More cash flow allowed companies to increase research and development, invest in capital expansion projects and spend more money on marketing. More people were needed for all this; unemployment fell from seven and a half percent in 1992 to less than four percent in 2000.More jobs meant more consumers, and Americans know how to consume. The increase in consumption increased corporate sales, which boosted corporate profits over and above the benefit of lower interest rates. The increase in profits meant higher stock prices and since currency crises were continuously occurring throughout the Nineties, the booming stock market started to attract its share of foreign capital investment.Foreign capital investment also created demand for dollars, increasing the dollar exchange rate. Foreign investors were able to compound their returns on the US stock and bond markets with gains in the dollar exchange rate, making US investments even more attractive. Capital kept pouring into the United States.As you can see the cycle was self propagating: it started with foreign capital investment boosting bond prices and lowering interest rates, the affect of which was to stimulate the economy and that resulted in higher investment returns that attracted even more foreign capital investment.Rising stock and bond prices also made Americans feel wealthier, giving them that extra incentive to spend just a little bit more at the mall, at the car dealership and on their homes. But falling interest rates also meant lower mortgage rates and that, thanks to all the foreign capital being poured into the country, enabled many more Americans to buy homes.The demand for houses caused a real estate boom. Rising real estate prices have a greater wealth effect than rising stock prices. Wealthy-feeling consumers spent all they had: the personal savings rate dropped from 7.26% in 1991 to 1.69% in 2001. Not having any money did not stop them from spending. Household credit market debt increased by 140% from 1991 to 2003. Not only are debt levels historically high, the amount of disposable income going towards servicing that debt is the highest it’s been in at least twenty three years, as far back as my data goes. This is despite record low interest rates. Not surprisingly, non-business bankruptcy filings increased by 120% from 1990 to 2002. But these were the good times: the “New Era” of sustainable economic expansion with no inflation because of increased productivity. Isn’t that what Greenspan said? I find it disconcerting that during the most exceptional economic expansion the United States has seen since the Roaring Twenties we are also seeing record bankruptcies, record debt levels, a record low savings rate and record low interest rates. The latter, of course, means that the Fed is between a rock and a hard place. “But that is not all,” as the Cat in the Hat said.So much foreign capital made its way into the United Sates that the dollar exchange rate, on average, more than doubled from 1990 to 2002. The stronger dollar made foreign products more competitive in US markets and made US products more expensive on foreign markets, causing the US trade deficit to increase from thirty one billion dollars in 1991 to its current level of about five hundred billion dollars.The good news is that large trade deficits can be eliminated. The bad news is that a large trade deficit is almost always followed by a recession, the magnitude of which is proportional to the trade deficit. Given the size of its trade deficit, it would be a pleasant surprise if the United States can eliminate its current trade deficit by a mere recession. The magnitude of the deficit suggests a depression is more likely.A recession is defined as at least two consecutive quarters of decline in gross domestic product. If it lasts more than a few quarters and is associated with rising unemployment, a general decline in prices and a loss of purchasing power, it becomes a depression.Recessions occur when excess inventory accumulated during the expansion phase of a business cycle has to be absorbed into the economy during the ensuing contraction phase. Depressions, on the other hand, occur when the economy has to catch up with excess production capacity. This takes much longer than merely working off inventory.When there is excess production capacity companies cut their prices to try and stay in business. Think of the rebates we have been seeing in the auto industry as an example. Companies also cut costs by reducing their work force, and so unemployment rises. Higher unemployment means fewer consumers and fewer consumers mean less sales.Consumers now have no purchasing power left: they spent all their money and all the money they could borrow. Corporations will have no choice but to engage in price wars and in the short term that will lead either to lower prices (deflationary depression) or stagnant prices. There is a probability that fiat inflation of the money supply could ward off deflation. We will most likely see a prolonged period of economic stagnation if it does.Lastly, the massive influx of foreign capital and the debt driven economic expansion lead to a considerable investment in infrastructure. Manufacturing capacity currently exceeds production by 33%, a historically low level of capacity utilization and this is what causes depressions.It is unlikely that we will see capacity utilization increase until consumer balance sheets are fixed, and that could take a long time. As Doug Casey often said, when the history books are written the coming contraction could well become known as the “Greater Depression”. I find it hard to imagine that the US dollar is going to reverse its downward trend while US consumers pay off their debt, file more bankruptcies and see more of their friends collect unemployment insurance. And a declining dollar means higher gold prices in US dollars. Paul van Eeden
Same as I have been buying, PCGS 66-67 red Lincolns from mid 20's thru 1942. Just being a small collector/investor, I think Laura's market will collapse before the collectors market. But, I'm sure she's right. It will be awhile. The big money comes in hard and fast, but as soon as it looks unstable, they are the first to dump. I just believe this internet thing is the biggest factor in the coin market. Just as big as the slabbing companies. JMHO of course. But I'm willing to take a chance on my own opinion, not someone elses. I can take losing money for my mistakes, but not from listening to someone else. Been there, done that. Steve
I think it's mostly collectors buying and this applies to everything from circ buffalos, to moderns, to million dollar monsters of the 19th century. While those buying the expensive coins may have investment in the back of their minds so do most of those buying the VF indians or the '70's proof sets.
It's still likely that speculation will develop and not impossible that it has already, but it certainly hasn't become rampant yet.
Fears about the nation's current debt levels are overblown. As much as I hate to agree with Dubya, growth WILL take care of our CURRENT (public and private) debt and trade deficits. On the other hand, I suspect that the current administration will do everything it can to keep our Federal Budget increasing faster than any conceivable growth rate. THAT scares me.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Mr. Eureka -- yes, this is the essence of the matter. The current debt level is manageable, as long is it is brought under control with some discipline, and also, as long as people realize that some degree of compromise (ie, reduction) in social security benefits will be necessary.
The challenge is that it will take 10 - 15 years of prudence and discipline to get things under control. It will be hard to address without a crisis, and if a crisis comes first, it won't be fun for any of us.
This Thread reminds me of the Chinese proverb where four blindmen are trying to describe an elephant based only on the part of the elephant they were able to touch and feel. Obviously the blindman who touched the ear of the elephant had a different take than the blindman who handled the tusk, or the other who handled the leg, and the other who handled the tail. Each is corrrect yet each doesn't have a true synopsis of what the elephant really is.
Each Dealer and Collector here is describing this Market with blinders on- only able to grasp that which is what they are experiencing- what they touch and feel.
why should my benefits be compromised because of the current administration's lack of discipline and resolve??
Two reasons:
1. There is no money in the "social security fund". All the "fund" contains is an IOU from the Treasury. Your social security payments are long gone. Discipline and resolve can't bring it back. Somebody is going to need to get taxed so that you can get paid.
2. You and your fellow citizens chose to trust our leaders when you elected them. I.e., you #%&*'ed up!
BTW, are we OT yet?
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Well, if Laura says that there are billionaire players in the market right now......
Here's the thing. The ENTIRE coin market is only $2B or so. Heck, there are a lot of $2B+ companies listed in the Fortune500 that most of us have never heard of. The point being, what we do is relatively small and it doesn't take too many deep pockets to shake it up.
I once asked Legend Steve, if you threw all the SDs in the world into a pile and then bought it, how much would it cost? He estimated about $25M. That is chump change for the enterprising billionaire.
I actually agreed with the figure. You have about 40 dates, perhaps an average of 250 extant per date - 10,000 coins total. Figure $2500/coin and you are there. Not sure we counted the 1870-S coins
Now, of course, if someone actually tried doing this, they could only buy so many quietly before prices started going up.
Yes there are indeed SEVERAL BILLIONARES building collections ( not just hoarding coins) right now. They could not buy up the entire coin market.
The numbers you and Legend Steve figured at GROSSLY incorrect (I know $25 million for SD's can be surpassed just by holdings that I am aware of). The size of the coin market far exceeds $2 billion dollars. You don't know what trades hands on any given day.
Why is it so difficult for people to NOT scorn the big collectors? Its grossly ignorant to think that if they went away, the coin market would continue to be strong. And to say they move in and out-NOT so! There are multiple Norweb liek collections being built that the world does not know about. WHen will everyone here get it through their heads-NOT EVERY GREAT COLLECTION WILL EVER APPEAR ON ANY REGISTRY!
I dodn't understand how people who do not trade everyday-that is see who's doing all the buying and selling can comment.
I need some beauty rest! Flame away!
Laura Sperber
JUST SAY NO TO WANNABES! They lurk and prey on unwitting collectors in chatrooms!
Dunno. If a billionaire decides that it would be nice to have a comprehensive run of proof gold, who knows what else they might like to buy.
There are goofy collectors in this world with seemingly unlimited funds - go through the Malcolm Forbes gallery in NYC if you are not convinced!
Terry Brand accumulated probably half of all extant 1844 dimes (recently auctioned by Heritage). He thought they were "cool".
I agree that 10M folks in China are not going to develop an insatible desire for US coins. The odds are much higher that ONE major player in the US could do something like I have suggested.
Laura-
I'll agree that tons of stuff is traded out of the public eye. I also know that you've advertised your sales volume enough for me to have a good idea how big Legend is. Given that you guys are the gatekeepers for a healthy pecentage of the big deals, we can go from there. You could probably talk me up on the 2B figure, but I still believe that the overall coin market is small enough for heavy hitters to make an impact if they want to.
I think everyone is right. The market is going to crash at any moment. Now is the time to unload your top quality 19th century type for any reasonable liquid offer........
You know, I really AM bullish on coins, but some of the comments on these boards leave me no choice but to try to curb the "irrational exuberance". That said....
OK, Laura, you wanna talk about billionaires? OK, fine. How many are playing the coin game today? Of those, how many of them are passionate enough about their coins to hold on through the duration of the bull market and stick around when the market turns south? Get real! When real money is at play, it behaves like real money. They will run like YN's at a Neverneverland picnic!
BTW, the majority of my net worth is in rare coins.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
There is no single "market". Here are my observations for a very limited segment:
Patterns haven't peaked. There is still great interest in those that are "interesting". The market has been flooded with "Standard Silver" patterns (and the like) that have gone begging, making the overall market look weak. I felt bad for ANR at the last auction - everything went back to the book. These have NEVER been interesting, in my opinion. I'm still buying all the nice 1856-1858 PCGS small cent patterns I can find, P 65 or better. I know others who feel the same way in their areas of interest.
Copper - for IHC and FE cents, there are none around. Substandard MS coins and proofs are all that's available. Nice MS65R IHC or better coins, even if overpriced, are getting snapped up fast - at auction or on web sites. FE cents are bringing strong prices in all grades.
I recognize this is a small segment of the market, so take it for what it's worth.....
"My friends who see my collection sometimes ask what something costs. I tell them and they are in awe at my stupidity." (Baccaruda, 12/03).I find it hard to believe that he (Trump) rushed to some hotel to meet girls of loose morals, although ours are undoubtedly the best in the world. (Putin 1/17) Gone but not forgotten. IGWT, Speedy, Bear, BigE, HokieFore, John Burns, Russ, TahoeDale, Dahlonega, Astrorat, Stewart Blay, Oldhoopster, Broadstruck, Ricko.
I have been researching my first pattern purchase for quite awhile. And I learned very quickly that I don't want to have anything to do with that standard silver crap. If you look at the pops they are 10 or 50 times more common than the others which may cost only 2x as much. I may eventually buy one, but only one just to have as a design example.
You know, I really AM bullish on coins, but some of the comments on these boards leave me no choice but to try to curb the "irrational exuberance". That said....
Uh, oh - the last time a public figure uttered those words, the economy of the world crashed...
No way. There's so many new people who never bought coins before getting into it so there's a steady stream of new money coming into the business which accounts for such competiveness for better material. Further, there's been a lot of good news in the business in general as well as profits for the new people who in turn are talking about it, learning more and focusing rather than just throwing money into whatever comes their way ( or is pitched to them) that it's become a very positive and fun time in the business.
The coin business really has grown by leaps and bounds.
I think that some sectors of the coin market have peaked and have shallow depth of buyers and conviction...
Those coin collectors/investors who have a high ratio of Dollars:Sense could see some very thinly capitalized sectors of coin collecting correct very quickly and significantly...
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
Comments
Bear - Perhaps you misunderstood. The "B" in "B.S." stands for Bull, not Bear. But thank you for sharing the secret of your beautiful lawn!
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Camelot
With the advent of the grading services some 18 years ago, many coins are now holdered in high grades, but are lifeless, cleaned and ugly. There are truckloads of MS64 this and MS65 that, that every dealer has marked at retail prices but the coins are neither scarce nor worth the money relative to their true condition and eye appeal.
However, it seems to me that the run up in prices in 89' was due to mutual fund money trying to make coins a predictable commodity for trade and investment. Without extensive study and expertise, coins do not make good investments overall. As such, without the buying pressure from a large influx of capital coming from the mutual fund companies, I do not think those same conditions that caused the 89' runup are in place today.
Surely there will be a correction at some point, as the equilibrium between supply and demand changes to the supply side. What coins will be affected will have to be seen. Probably the more common the greater the correction.
As for the popular collector coins in the $500.00 and under range I don't think there will be any noticeable or adverse correction for that market.
At that time we shall see if 2004 was a good coin year or not. Appologies
will be expected to be offered and graciously accepted.
As for my final word as to whether the market has peaked or has
further to go.....................................................................Yes, I think so.
Camelot
Camelot
Les
for the Oracle of Delphi.
Camelot
<< <i>Glad you enjoyed the cryptic answer. I should have worked for the Oracle of Delphi. >>
Might not have been a particularly good occupation for a "Bear" - those "Oracles" had a bad habit of sacrificing animals to the gods and then taking out their livers to see just what the Gods had ordained for the person paying for his "prophacy".
Hmmm - maybe we could predict this market with a few carefully chosen sacrifices
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” Mark Twain
Newmismatist
The Greater Depression
Last week we discussed foreign currency crises and the increase in the US dollar exchange rate during the Nineties. Starting with Brazil in 1992 one currency crisis after another spread across the globe causing capital flight. Net foreign investment in the United States totaled thirty eight billion dollars in 1992 and increased to over five hundred billion dollars during the past four quarters. Cumulative net foreign investment since 1992 has been almost three trillion dollars. Most of this foreign capital found a home in US bonds, increasing US bond prices throughout the 1990s. Rising bond prices mean lower interest rates. The interest on 30-year Treasury Notes fell from an average of 8.61% in 1990 to 5.02% as of yesterday and the yield on 90-day Treasury Bills decreased from 7.75% to only 0.87% in the same period.Lower interest rates meant that corporate borrowing costs declined and that lead to an almost instantaneous increase in corporate profits. Higher profits justified higher stock prices and the thus the stock market bubble was born.The reduction in interest rates that stemmed directly from the influx of capital also caused an increase in corporate cash flows. More cash flow allowed companies to increase research and development, invest in capital expansion projects and spend more money on marketing. More people were needed for all this; unemployment fell from seven and a half percent in 1992 to less than four percent in 2000.More jobs meant more consumers, and Americans know how to consume. The increase in consumption increased corporate sales, which boosted corporate profits over and above the benefit of lower interest rates. The increase in profits meant higher stock prices and since currency crises were continuously occurring throughout the Nineties, the booming stock market started to attract its share of foreign capital investment.Foreign capital investment also created demand for dollars, increasing the dollar exchange rate. Foreign investors were able to compound their returns on the US stock and bond markets with gains in the dollar exchange rate, making US investments even more attractive. Capital kept pouring into the United States.As you can see the cycle was self propagating: it started with foreign capital investment boosting bond prices and lowering interest rates, the affect of which was to stimulate the economy and that resulted in higher investment returns that attracted even more foreign capital investment.Rising stock and bond prices also made Americans feel wealthier, giving them that extra incentive to spend just a little bit more at the mall, at the car dealership and on their homes. But falling interest rates also meant lower mortgage rates and that, thanks to all the foreign capital being poured into the country, enabled many more Americans to buy homes.The demand for houses caused a real estate boom. Rising real estate prices have a greater wealth effect than rising stock prices. Wealthy-feeling consumers spent all they had: the personal savings rate dropped from 7.26% in 1991 to 1.69% in 2001. Not having any money did not stop them from spending. Household credit market debt increased by 140% from 1991 to 2003. Not only are debt levels historically high, the amount of disposable income going towards servicing that debt is the highest it’s been in at least twenty three years, as far back as my data goes. This is despite record low interest rates. Not surprisingly, non-business bankruptcy filings increased by 120% from 1990 to 2002. But these were the good times: the “New Era” of sustainable economic expansion with no inflation because of increased productivity. Isn’t that what Greenspan said? I find it disconcerting that during the most exceptional economic expansion the United States has seen since the Roaring Twenties we are also seeing record bankruptcies, record debt levels, a record low savings rate and record low interest rates. The latter, of course, means that the Fed is between a rock and a hard place. “But that is not all,” as the Cat in the Hat said.So much foreign capital made its way into the United Sates that the dollar exchange rate, on average, more than doubled from 1990 to 2002. The stronger dollar made foreign products more competitive in US markets and made US products more expensive on foreign markets, causing the US trade deficit to increase from thirty one billion dollars in 1991 to its current level of about five hundred billion dollars.The good news is that large trade deficits can be eliminated. The bad news is that a large trade deficit is almost always followed by a recession, the magnitude of which is proportional to the trade deficit. Given the size of its trade deficit, it would be a pleasant surprise if the United States can eliminate its current trade deficit by a mere recession. The magnitude of the deficit suggests a depression is more likely.A recession is defined as at least two consecutive quarters of decline in gross domestic product. If it lasts more than a few quarters and is associated with rising unemployment, a general decline in prices and a loss of purchasing power, it becomes a depression.Recessions occur when excess inventory accumulated during the expansion phase of a business cycle has to be absorbed into the economy during the ensuing contraction phase. Depressions, on the other hand, occur when the economy has to catch up with excess production capacity. This takes much longer than merely working off inventory.When there is excess production capacity companies cut their prices to try and stay in business. Think of the rebates we have been seeing in the auto industry as an example. Companies also cut costs by reducing their work force, and so unemployment rises. Higher unemployment means fewer consumers and fewer consumers mean less sales.Consumers now have no purchasing power left: they spent all their money and all the money they could borrow. Corporations will have no choice but to engage in price wars and in the short term that will lead either to lower prices (deflationary depression) or stagnant prices. There is a probability that fiat inflation of the money supply could ward off deflation. We will most likely see a prolonged period of economic stagnation if it does.Lastly, the massive influx of foreign capital and the debt driven economic expansion lead to a considerable investment in infrastructure. Manufacturing capacity currently exceeds production by 33%, a historically low level of capacity utilization and this is what causes depressions.It is unlikely that we will see capacity utilization increase until consumer balance sheets are fixed, and that could take a long time. As Doug Casey often said, when the history books are written the coming contraction could well become known as the “Greater Depression”. I find it hard to imagine that the US dollar is going to reverse its downward trend while US consumers pay off their debt, file more bankruptcies and see more of their friends collect unemployment insurance. And a declining dollar means higher gold prices in US dollars.
Paul van Eeden
route66 Steve.......what will you be buying this year?????
to moderns, to million dollar monsters of the 19th century. While those buying the
expensive coins may have investment in the back of their minds so do most of those
buying the VF indians or the '70's proof sets.
It's still likely that speculation will develop and not impossible that it has already, but
it certainly hasn't become rampant yet.
it to bed last night. Well, if you must, let er rip.
Camelot
My 1866 Philly Mint Set
Fears about the nation's current debt levels are overblown. As much as I hate to agree with Dubya, growth WILL take care of our CURRENT (public and private) debt and trade deficits. On the other hand, I suspect that the current administration will do everything it can to keep our Federal Budget increasing faster than any conceivable growth rate. THAT scares me.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
The challenge is that it will take 10 - 15 years of prudence and discipline to get things under control. It will be hard to address without a crisis, and if a crisis comes first, it won't be fun for any of us.
There goes another nights worth of sleep shot to hell.
Camelot
why should my benefits be compromised because of the current administration's lack of discipline and resolve??
al h.
<< <i>as long as people realize that some degree of compromise (ie, reduction) in social security benefits will be necessary.
why should my benefits be compromised because of the current administration's lack of discipline and resolve??
al h.
You certainly wouldn't expect the members of the New Aristocracy to have to give up any of their benefits, would you. Your money is their money.
Camelot
Each Dealer and Collector here is describing this Market with blinders on- only able to grasp that which is what they are experiencing- what they touch and feel.
Is it possible all are right?
peacockcoins
Two reasons:
1. There is no money in the "social security fund". All the "fund" contains is an IOU from the Treasury. Your social security payments are long gone. Discipline and resolve can't bring it back. Somebody is going to need to get taxed so that you can get paid.
2. You and your fellow citizens chose to trust our leaders when you elected them. I.e., you #%&*'ed up!
BTW, are we OT yet?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Privatisation of SS would do the trick less painfully.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Here's the thing. The ENTIRE coin market is only $2B or so. Heck, there are a lot of $2B+ companies listed in the Fortune500 that most of us have never heard of. The point being, what we do is relatively small and it doesn't take too many deep pockets to shake it up.
I once asked Legend Steve, if you threw all the SDs in the world into a pile and then bought it, how much would it cost? He estimated about $25M. That is chump change for the enterprising billionaire.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I actually agreed with the figure. You have about 40 dates, perhaps an average of 250 extant per date - 10,000 coins total. Figure $2500/coin and you are there. Not sure we counted the 1870-S coins
Now, of course, if someone actually tried doing this, they could only buy so many quietly before prices started going up.
Let me put it this way:
You could argue that SD's could triple if two billionaires decided to buy as many as they can get.
Likewise, you could argue that SD's could triple if 1% of the population of China decided to each buy one SD.
Both scenarios are far fetched.
I'll stick with Franklin Mint gold, thank you.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Yes there are indeed SEVERAL BILLIONARES building collections ( not just hoarding coins) right now. They could not buy up the entire coin market.
The numbers you and Legend Steve figured at GROSSLY incorrect (I know $25 million for SD's can be surpassed just by holdings that I am aware of). The size of the coin market far exceeds $2 billion dollars. You don't know what trades hands on any given day.
Why is it so difficult for people to NOT scorn the big collectors? Its grossly ignorant to think that if they went away, the coin market would continue to be strong. And to say they move in and out-NOT so! There are multiple Norweb liek collections being built that the world does not know about. WHen will everyone here get it through their heads-NOT EVERY GREAT COLLECTION WILL EVER APPEAR ON ANY REGISTRY!
I dodn't understand how people who do not trade everyday-that is see who's doing all the buying and selling can comment.
I need some beauty rest! Flame away!
JUST SAY NO TO WANNABES! They lurk and prey on unwitting collectors in chatrooms!
Dunno. If a billionaire decides that it would be nice to have a comprehensive run of proof gold, who knows what else they might like to buy.
There are goofy collectors in this world with seemingly unlimited funds - go through the Malcolm Forbes gallery in NYC if you are not convinced!
Terry Brand accumulated probably half of all extant 1844 dimes (recently auctioned by Heritage). He thought they were "cool".
I agree that 10M folks in China are not going to develop an insatible desire for US coins. The odds are much higher that ONE major player in the US could do something like I have suggested.
Laura-
I'll agree that tons of stuff is traded out of the public eye. I also know that you've advertised your sales volume enough for me to have a good idea how big Legend is. Given that you guys are the gatekeepers for a healthy pecentage of the big deals, we can go from there. You could probably talk me up on the 2B figure, but I still believe that the overall coin market is small enough for heavy hitters to make an impact if they want to.
Camelot
OK, Laura, you wanna talk about billionaires? OK, fine. How many are playing the coin game today? Of those, how many of them are passionate enough about their coins to hold on through the duration of the bull market and stick around when the market turns south? Get real! When real money is at play, it behaves like real money. They will run like YN's at a Neverneverland picnic!
BTW, the majority of my net worth is in rare coins.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I guess if the water in the tub goes down, we go down the drain together.
my final words on the subject are, Glub, Glub, Glub.
Camelot
I hear the heavy stomping of my billionaire friend wanting to buy up all of the Franklin Mint stuff!
Irrational exuberance indeed.
Camelot
Patterns haven't peaked. There is still great interest in those that are "interesting". The market has been flooded with "Standard Silver" patterns (and the like) that have gone begging, making the overall market look weak. I felt bad for ANR at the last auction - everything went back to the book. These have NEVER been interesting, in my opinion. I'm still buying all the nice 1856-1858 PCGS small cent patterns I can find, P 65 or better. I know others who feel the same way in their areas of interest.
Copper - for IHC and FE cents, there are none around. Substandard MS coins and proofs are all that's available. Nice MS65R IHC or better coins, even if overpriced, are getting snapped up fast - at auction or on web sites. FE cents are bringing strong prices in all grades.
I recognize this is a small segment of the market, so take it for what it's worth.....
I have two of them in the dime denomination. Heavy Roman coinage influence!
Uh, oh - the last time a public figure uttered those words, the economy of the world crashed...
The coin business really has grown by leaps and bounds.
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Those coin collectors/investors who have a high ratio of Dollars:Sense could see some very thinly capitalized sectors of coin collecting correct very quickly and significantly...
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"