What will soaring gold do to rare coins?
jpkinla
Posts: 822 ✭✭✭
If gold continues to have a tear and really starts a parabolic move do you believe rare coins will soar as well? Or do you believe that generic gold will move higher with a smaller move in rarer gold coins?
I am asking because many of you believe rare gold coins are already too high.....I do not believe that....FYI
If gold goes to $600 to $800, what will rare coins do? If gold breaks $1000, what will rare coins do?
Something is going on and obviously gold is the place to be.....
I am asking because many of you believe rare gold coins are already too high.....I do not believe that....FYI
If gold goes to $600 to $800, what will rare coins do? If gold breaks $1000, what will rare coins do?
Something is going on and obviously gold is the place to be.....
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Comments
I believe that you could sum up his response in so many words, by--
Fastening your seatbelt very snug and hang on for dear life.
<< <i>HRH, had an answer to this question a while back.
I believe that you could sum up his response in so many words, by--
Fastening your seatbelt very snug and hang on for dear life. >>
You should get a copy of his "Mercenary's Guide to Coin Investing". Other than the silly picture of him on the front dressed as a mercenary, he predicts that gold will hit $1,000 per ounce (at least), and then move to several thousand dollars an ounce. The book was published about 25 years ago.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
roadrunner
My only fear is that a recession comes in 2006 due to a drastic slowdown in consumer spending caused by a sudden decline in real estate values....Remember that consumer spending accounts for 2/3 of GDP and any loss of confidence (i.e. decline in the perception of net worth due to declining real estate values) will translate into reduced spending.....Couple that with increased debt loads and I suspect an economic downturn could occur and zap our gold rally....This would of course cause expensive coins to decline as well....
$20 Saint Gaudens Registry Set
Roadrunner,
My only fear is that a recession comes in 2006 due to a drastic slowdown in consumer spending caused by a sudden decline in real estate values....Remember that consumer spending accounts for 2/3 of GDP and any loss of confidence (i.e. decline in the perception of net worth due to declining real estate values) will translate into reduced spending.....Couple that with increased debt loads and I suspect an economic downturn could occur and zap our gold rally....This would of course cause expensive coins to decline as well.... >>
Gold is more global in nature. I'd expect on a downturn you'd have a "flight to safety" . Russia has said they'd going to double their reserves.
How strong are the hands that hold US gold coins at this time?
If the coins jump nicely, will the price bring the nice coins out in large quantities and drop the price or will the hands hold them till another time and the price just keeps on moving?
One thing for sure, it sure looks like something is going to happen here. Reminds me of that Dylan line..."you know something is happening, but you don't know what it is..."
Bottom line: with the continual devalueing of the dollar and the lack of new gold producing mines, the demand will either have to go away or the price will have to jump...and the demand isn't going away.
My Auctions
I had a few MS65 $10 Libs and Indians back around 2003-2004, paid around $2100 for them. And felt they were so undesireable that I was happy to get out of them for $50 profit. Funny how a little shift in market psych can change everything.
JPKinla, I am trying to discount the recession theory in 2006. I think between Helicopter Ben and the rest of the world continuing to issue paper that a recession will not yet emerge. The FED will pump the economy silly before they let houses tumble 20% or more.
Sort of coincides with them removing M3 from public scrutiny.
And even if the FED looses the handle, I still see people flocking to something of value (like gold) to weather the storm.
roadrunner
Your worries about the economy sound like a California worry!!! Buta drop in R Estate prices should be small, if at all. For the U.S. economy to keep plugging along, you need to have Gov't spending, or consumer spending. "Experts" say things are pretty good in the U.S. as a group, and since the holidays are close, consumer spending will continue...
...but watch out for Q1 and Q2 2006. We will then find out if the (Cali and other) real estate states are consumer debt-loaded. BUT IN THE PAST, IT HAS BEEN RESEARCHED, THE HIGH DEBT LOADS OF AMERICAN CONSUMERS HAS NOT BEEN A MAJOR FACTOR OF SPENDING CURBS. But what about the Government?? SPENDING HEAVILY CURRENTLY, and a drawback of Gov't spending could be a major factor.
The economy is poor in the Midwest - my area. People are cutting back because of Delphi, GM and Ford. The worst is yet to come. If there is a Delphi strike, which is probable, GM will have to burn through 6 BILLION A DAY. They will last, it is said, 3 months.... If GM has to file "anything", it will be a ripple effect throughout the World.
GOLD: 20% return past 15 years, (or ONLY 1.23% a YEAR AVERAGE). 12% return in 5 years, (yawn), BUT 9.4% in one year, and 4.5% return past MONTH. If the past is any indicator, this recent jump in value is few and far between. I still believe gold will hit 450 before 500. I keep saying that, and now nervous on my prediction, but there really is no reason to move to gold. LOW INTEREST RATES, and LOOOOOOOWWWW INFLATION. Gold historically has been the inflation hedge. John, banks and consumers could care less of the coin market. Higher spot gold prices should help it though. I read something years ago that the ASIA crisis hurt gold, (Early 1990's), because 80%, (YES EIGHTY PERCENT) of all gold PURCHASES were from far east consumers. The rest was banks, investors. That was at a time when BANKS were unloading gold. So the demand was shot at that time. If banks reverse this trend, then demand of course increases. You still have the risk of higher interest rates (Money managers, banks would rather have bonds then gold), and/of any possible currency crisis. BOTH these two will effect gold negatively.
Commodities have shot up in past three years - steel because of China, (but China's demand to buy steel NOW is drastically slowing down) and lumber, etc. from housing starts.
The economy will continue to do well because of building needs (Florida still booming, and hurricane damage in the south -and jobs). The economy will suffer if GM runs into big trouble. There is no reason for inflation, or then, gold to go up much more.
If gold is having a "tear" at 4.5% return in a month, what words would you use for these past month returns???
DOW UP 5.7%
SP 500 UP 6.6%
NASDAQ UP 6.9%
GOLD was the LOSER...
Gold is up from $260 to $490 over the past 5 years. 88% gain.
There's no compounding in physical gold so how one gets 12% is a mystery. Regardless, it far beats out stocks which have lost ground......bigger YAWN. The payback in physical gold or gold shares is when the curve moves exponentially. But by the time are you'll be wondering where your growth stocks went to.
As Ronald Reagan said, "there you go again." Bringing in the 15 year history of gold when it has NO relevance to what is occurring today. Cue for Dollardude to mention the 75 year history of gold......where are you Dude? You don't see Central Banks dumping gold to control the price anymore as they did thru the 1990's.....and you won't. That game is up. They know they have lost that battle. The Brits look like utter fools at this point for having dumped the majority of their gold back at $260/oz. Idjuts.
Low Inflation? ...spoken like a true BLS or FED Official. Since the BLS has permanently altered the means to calculate the CPI I doubt we can see much more than 10-12% inflation even under the worse of conditions (20% was the high in 1980). If we went back to that older calculation we would be around 7-9% at the moment. No inflation right?
Higher interest rates turning gold? Another common public misconception.......almost as good as the one that hurricanes are good for the economy (lol). Think again. In 1978-1980 it took more than a year or two of 10%, or 12% or 15% interest rates to turn the commodity tide. Try closer to 18%. Do you really think that a quick tweek to say 8% interest rates will bury gold? Momentum plays a large role.
There was a large din who predicted $400 gold before $450 last time around. They were quite wrong. Now the new game is $450 before $500? We'll just keep stacking up $50 increments.
roadrunner
I see the psychological $500 level broken by this Wednesday.....Then maybe a pullback to the $470-$480....area
$20 Saint Gaudens Registry Set
hands and dealers and collectors had windfall profits from selling and dealing in the
metals. They tended to put these profits back into the hobby and Morgans, gold, WL
halfs and several other coins were the major beneficiaries of this buying.
Things are different now. The public doesn't own vast quantities of metal so there may
be little profit for dealers except on stock and somewhat increased sales. Collectors
will have the values of their coins increase and this could be a huge psychological boost
but may not do a great deal to put a lot of money in their pockets.
In any case money flowing into these sectors won't necessarily be spent on similar coins.
The money, as always, will be used for adding to collections or for pursuing whatever's
hot. I would not expect the same huge increases in numismatic silver and gold this time.
roadrunner
WHAT ARE YOU TALKING ABOUT???? THE BIG RUN UP IN SILVER/GOLD in 79,80 WAS INFLUENCED BY THE HUNT BROTHERS, WHO TRIED TO CORNER THE SILVER MARKET!!! AND INTEREST RATES AT 14% AND HIGHER. THE WORST OUR COUNTRY HAS EVER SEEN. 20% INFLATION. WE HAVE NOOOO HOARDERS TODAY, (I DON'T KNOW WHAT THEY WERE THINKING), AND WHAT INFLATION???? GAS HAS GONE DOWN A TON, AND COMMODITIES ARE UP BECAUSE OF YES, HURRICANE BUILDING/JOBS IN THE SOUTH. DON'T TRY TO TELL ME A HURRICANE, (WHICH IS LIKE A WAR ZONE DOWN THERE) ISN'T IN A SICK WAY, GOOD FOR THE ECONOMY.
The Detroit News had an article about all the men down in Louisiana, and Mississippi, from all over, working. Some of the women down there were quoted saying, "There all plenty of men for us all over. Never seen it like this!" Flights with one-way tickets to the south common now.
Everything is cheap to me. Except housing for some, but you watch, that will come down a bit. Then where's this inflation? Plenty of used cars, new ones with HUGE discounts never seen before, we are buying goods/services made from cheap overseas labor, etc. Where's the price increases coming from???
You are dreaming of a time that will never come again. Or it is so rare. Like me saying, "LOOK AT WHAT THE DOW HAS DONE SINCE 1930!!!????
KEEP BUYING GOLD BY THE TON THEN IF IT WILL GO UP 10% MORE!!! You should mortgage your watered-stock home and buy GOLD!!!! WOULDN'T YOU? SHOULDN'T YOU?
I have to disagree with you on this one my friend.....I see price increases in everything I use and touch.....What scares me is real estate because everyone feels rich and one house just isn't enough which is why a lot of people I know have been buying extra homes as a speculation....
I have to think the only way our country can pay back the debt is 1) raise taxes which Bush won't do and couldn't raise it high enough to pay down debt....2) cut spending (yeah right!)....won't happen as there are too many entitlement programs which are off limits.....3)pay the debt with cheaper dollars i.e. print money.....
Which do you think our politicians are going to do? Goods and services will be higher in nominal dollar terms.....
Look at the price of gold in terms of foreign currencies:
Gold in terms of foreign currencies other than the dollar
$20 Saint Gaudens Registry Set
This is good stuff, eh? I think the Gov will borrow more money - Issue 30-year treasuries again, WITH THESE LOW RATES STILL, is the way to go for them. They will do that.
So about the gold. If it is really that great of a future return, then you're doing well with your collection, and BUY MORE then. Right?
Once gone, you won't see anything except durable goods (cars, appliances, etc.) that go down in price. Health care, tuition, foods,
fuels, timber, PM's, professional services and technical trades, fees, taxes, etc. all continuing to rise dramatically. So what isn't going up or hasn't gone up in price other than SUV's and Hummers?
Since when did the Hunts corner gold in the 1970's. You have your facts messed up. Gold took off in the 1970's due to releashing the fixed price on it in 1971. Of course LBJ's massive spending also helped. Hunts did corner silver but the Feds changed the margin requirements when the other traders were getting their butts whipped. Buffet probably has the equivalent of a corner on silver now but you don't see action being taken against him. Darn Buffet is just as stupid as the Hunts (lol). Bill Gates too from what I read.
Let's all pray for more Hurricanes, more wars and more 9-11's so the economy can be boosted up. And a good volcanic eruption or two should really keep the road crews busy too. One good cat 5 hurricane is worth +$200 Billion to the economy. Any guesses as to how that $200 BILL is derived? It doesn't come from selling gold.
3 or 4 good hurricanes and we can wipe out this year's trade deficit.
roadrunner
for the right rare coins with the right look
up UP AND AWAY zoom...................................
but it has to be the RIGHT rare coins with the RIGHT look to them this is the KEY!!
Good post for the "other side" of what I see. I still should have bought your 1875-s quarter...
Of course we don't want hurricanes, war zones, etc., BUT THEY HAVE HAPPENED IN 2005, so it will be a "boost" factor for the economy. Every year it's something the negative liberal press has to keep America in the complaint/whining dept. And things keep ticking along, year after year.
Fuels (natural gas/oil futures for the 3-6 month timeframe) have gone down 40% the past month!! Of course the press wouldn't talk much about that. It's good news...
Gallon of milk has been the same to me, for over 5 years. Food, with globalization, better technology, shouldn't go up much. But healthcare, there's an interesting one. (Am I on the open forum?)
Healthcare: I believe in a round about way, if you want to live forever, you should pay for it yourself. It is an interesting subject around here: The auto firms want to back out of retirement benefits. GM promises you all your years that healthcare is covered, even when you are retired. But what are you going to do if your company that simply made a PROMISE, runs out of money and says, "too bad?". Is the government supposed to take care of your healthcare too?? Maybe we are all living too long now, and one shouldn't count on a company or the government to take care of it. I know, I know, I am one of the "better off" ones who can (and does) pay for his and family's (one child, divorced, paying all three) healthcare. But is not the higher costs in relation to better care to help everyone live longer??? Maybe cheaper care, less research and development, and live LESS??? Catch-22. Healthcare shouldn't be part of inflation hedge. It should be one's ability to prolong mortality.
All in all in relation to low inflation. Except healthcare I guess. With globalization, there will be CHEAPER WAGES, and this factor, a biggie, will keep goods and services competitive, (or in other words, lower priced). Deflation will play a part in the U.S. vs. Inflationary concerns, in the future.
BTW, our stock charts (from 7 different allocation firms) - Small cap, Mid cap and lage cap growth AND value - are currently at their greatest bullish signals since 1996. It will be interesting to see what truly happens.
Wait 'til you see our "low" dollar currency move against the euro and the yen. It's so low now, difficult for it to go lower. Then watch when you see U.S. corporate earnings reports with a stronger dollar.
US coin growth is internal. What faith do you have that the current prosperity based on our Real Estate market will continue??
I just don't buy it. The Japanese stock market experienced a similar euphoric "recovery" shortly after the market tanked in the 1980's.
That turned out to be little more than a bear market rally.
Interesting that all of your indicators point to extreme bullishness.
The word on all the sites I frequent is just the opposite, that a rollover has been imminent and nothing but "high hopes" are fueling the current stock market. Guess that's what makes markets.
Lots of hopes and fears in both directions.
One thing is without question is that the gold market has been on a steady long term rise since 2001. After 20 years of being beaten down, I'll continue to hang my hat on the gold chart. Until the world gets its finances in order, not much will change. And let's not forget that our experiment with an all fiat currency is only about 30 years old. Hardly enough time to find all the bugs.
I'll buy wars as a booster to the economy because for the past 100 years or so they have been fought on other country's soil. All we have to do is gear up the economy, print money, and go. But natural disasters occurring in our country take out just as much money as is being pumped in. There are winners and losers economically. Jobs are lost, esp good ones.
Another reason why oil prices have subsided is that the Europeans and others (the USA too) have been dipping into their strategic reserves to make up the 20% or so shortfall needed in the US since Katrina hit. I don't know when those imports are going away but they will. Those countries will not empty their reserves just for our sakes. This should have an impact on our oil prices when winter arrives.
roadrunner
Partner / Executive VP
Heritage Auctions
I dont think we are off to the races nor do I think economic disaster is around the corner. The closest example of where we might be now is the 70's. Lots of volatility. In the end we went nowhere.
One comment about the dollar though is that it does not need to be strong...just relatively strong. Europe and Japan have their own problems. Until one of these regions can overcome their own difficulties, the USD will be the preferred currency of choice.
Knowledge is the enemy of fear
I will never forget the cover of Newseek about a year ago titled "The incredible shrinking dollar".....The greenback has been on a tear since then....
$20 Saint Gaudens Registry Set
but to relate from a mfg newsletter I get......you can watch for a significant price jump in Taiwanese imported goods Prices as currently Taiwan is experiencing labor "unrest" in that labor rights groups are organizing the workers of other nationalities in Taiwan.
West coast ports are loaded with Taiwan goods and a price jump in Taiwan due to labor costs added to increases due to a strenghtening dollar will make that $1 widget in Walmart $1.20 overnight.
In the bedding industry....prices are up 25+% (upto 50%) in the last 12 months. Right now--LAZY BOY told dealers to not promise customers ANYTHING. The only company in the US that made the ingredients for foam is NO LONGER in Buloxi. The factory doesn't exist. All furniture that is manufactured with foam is experiencing significant increases.
I have a little chithole 16 thousand sg ft shop in a pretty rotten part of town and about a quarter mile from me is a development of about 50 zero lot line homes that 2 years ago were preselling for 250. They are just getting finished and current sales are 439. I'm amazed at SoCal prices and if they head south then we are in big trouble.