Will QE2 affect rare coins?
bidask
Posts: 14,029 ✭✭✭✭✭
With the dollar falling and other hard assets making big moves up seems rare coins should follow.
But they don't seem to be.....except for occasional pieces that have not been on the market for a long time and the appear at auction.
It seems more should be happening, for example, should we expect another wave of foregn buying of our rarest coins because of the exchange rate?
A prominent dealer told me that most of US proof gold is owned by the Japanese.
Or is the hobby of rare coin collecting really an outlier that cannot be compared to other bonafide hard asset investments affected by the dollar?
It seems if really rare coins were going to make a move....this is the time period to do so.
Your thoughts?
But they don't seem to be.....except for occasional pieces that have not been on the market for a long time and the appear at auction.
It seems more should be happening, for example, should we expect another wave of foregn buying of our rarest coins because of the exchange rate?
A prominent dealer told me that most of US proof gold is owned by the Japanese.
Or is the hobby of rare coin collecting really an outlier that cannot be compared to other bonafide hard asset investments affected by the dollar?
It seems if really rare coins were going to make a move....this is the time period to do so.
Your thoughts?
I manage money. I earn money. I save money .
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
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Seems to me that if the stock market and PM's are headed higher together, and I think that's the case, then rare coins should follow....eventually. Right now I think many are just slowly accumulating great coins at much better prices than they were in 2007-2008.
roadrunner
I generally view coins from the collector viewpoint and frankly have a hard time grappling with the investment angle, especially where coins are priced related to other goods and assets.
Others here have suggested as much. Global arbitrage of skilled labor leading to a gutting of the middle class, inability to relocate for new jobs due to underwater mortgages, yada yada.
Hey look a penny!
Collecting for the common man will go back to its humble roots of inexpensive examples taken from circulation that are placed in Whitman folders.
But that's just my opinion, an opinion of a man watching his beloved country being destroyed before his eyes...
<< <i>I don't get the QE2 reference. >>
I didn't get it until I looked it up on Google. I thought maybe Her Highness the Queen was going to buy US rare coins. With the royal family's ridiculous wealth and stupid spending I would imagine that would probably indeed have an effect on rare coin prices.
I have often read that rare coins are characterized and categorized as similar to other hard assets as investments.
Personally I mildly believe this.
Hence my question, should that affect rare coins?
I am really not sure but will be interesting to see.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Yes, your rare coins will be worth more but the real question is "what can I buy with the extra dollars that I get for my rare coins?" Unfortunately the answer will probably be "less than you could before they created 600 billion more dollars" because QE2 is going to make everyone want more dollars for what they are selling.
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>
<< <i>I don't get the QE2 reference. >>
I didn't get it until I looked it up on Google. I thought maybe Her Highness the Queen was going to buy US rare coins. >>
No, but she did send me an email recently that there's some 16.5 million pounds in the Royal Treasury that she wants to give me.
60 years into this hobby and I'm still working on my Lincoln set!
What's the projected value of treasuries that will be issued in the next 6-8 months?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>The fed just announced yesterday they are going to buy back 600 billion dollars of treasuries over the next 6-8 months.
What's the projected value of treasuries that will be issued in the next 6-8 months? >>
I thought I read that does not include an additional 35 billion a month coming due each month over the same time frame...
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>QE stands for quantitative easing whereby essentially the government prints money and buys back their own debt forcing interests down which has a negative impact on the dollar. The fed just announced yesterday they are going to buy back 600 billion dollars of treasuries over the next 6-8 months.
I have often read that rare coins are characterized and categorized as similar to other hard assets as investments.
Personally I mildly believe this.
Hence my question, should that affect rare coins?
I am really not sure but will be interesting to see. >>
I knew about the Fed action. I did not know the abbreviation and did not relish having to outbid the Windsors in coin auctions.
As for the $600B? It's a fart in a windstorm.
<< <i>The fed just announced yesterday they are going to buy back 600 billion dollars of treasuries over the next 6-8 months.
What's the projected value of treasuries that will be issued in the next 6-8 months? >>
The joke on CNBC was that the Fed is going to make public tons of details about what they will be purchasing before they purchase ("everything but the CUSIP number") and that "the trade" was to front run the Fed.
Anyway, you can't think of this as "why issue stuff and buy similar things?"
See, QE2 is "quantitative easing 2".... the key word is "quantity" They will literally print more money and buy these securities AND also go out and ask people for loans (that is.... sell more treasuries.) (think running a counterfeiting scheme AND running a ponzi scheme)
In the famous words from "In Living Color" :: Mo Money, Mo Money, Mo Money !!
rare
you said rare.
rare coins aren't tied directly to the metals market. They are more closely tied to interest and in the money area... money. If people are rich and feeling rich, then we're good to go. Now, if the metals market is making people rich, one might find the wealth effect from that making more money available for rare coin collecting.
But QE2 and rare coins? Right now, no connection at all. Where's the wealthy feeling? The market is up a few percent, but not many are feeling the glee. We need broader recovery. How about tying rare coins prices to "no longer needing any QE cause the economy is back on track" ?
``https://ebay.us/m/KxolR5
To just about everyone "QE2" is Britain's Queen Elizabeth II.
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But imagine for a moment you live in Australia, a country rich in minerals and mining.
They are not printing money.....they are selling to the world.
Take a look at this chart.
currency comparison of us dollar and aussie dollar
If you are an australian coin collector and you collect rare us coins, your purchasing power has increased 20% in the last 5 months.
So a rare coin bringing 50k US can be bot for 40k thru currency exchange today.
I am sure there are other examples of foreign currencies that have materially strengthened against our dollar. Those foregn coin collectors could be buying our us coins at a discount to what we pay.....likewise their coins should cost more as well.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>QE2 is a fancy name for "create more money," 600 billion more dollars in this case. >>
That's because the focus groups were unanimous in panning "Destroying the Value of the Dollars in Your Pocket" as the new fancy name for "creating money out of thin air".
<< <i>I am sure there are other examples of foreign currencies that have materially strengthened against our dollar. >>
Lessee.... Canadian Dollar, Aussie Dollar, Yen, .... so many out there. pick one and look it up.
We just need more foreign collectors of US coins.
As for the 600 billion. Do you think it stops there? That's all that's been commited. About 75 Billion a month for six months or so and then it gets revisited. They are trying to steepen the yield curve and will be buying at the short end to achieve it. Again, the Fed wants the rest of us out of cash and will punish those that hold it. I was able to make a huge score by buying TBT prior to the Fed announcement and more at 2:16pm after the announcement on a Day Trade. Basically TBT a bearish long bond position. Again, it makes no sense to fight the Fed. If you can't fight them, join them. I do hope that our newly elected officially will at least slow them down.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>As for coins, I think high value raities will get the biggest boot from QE2 . Bullion is still the best bet for the masses IMO. >>
You think the recovery is already being well felt by the wealthy?
Soooo - let me get this straight:
The government borrows money in the past and gives IOU's in the form of Treasury Bonds. The government then buys those IOU's back for current cash - and some say the government is borrowing more money? What am I missing here?
All that's happening in my mind is illiquid assets are becoming liquid .... and we the taxpayers are saving huge amounts of interest in the meantime. What's not to like?
<< <i>Methinks smoe of you guys have been to too many Tea Parties! LOL
Soooo - let me get this straight:
The government borrows money in the past and gives IOU's in the form of Treasury Bonds. The government then buys those IOU's back for current cash - and some say the government is borrowing more money? What am I missing here?
All that's happening in my mind is illiquid assets are becoming liquid .... and we the taxpayers are saving huge amounts of interest in the meantime. What's not to like? >>
Nah, not a TeaParty....... A Victory Party
Me thinks smoe of you are jealous of all the victory parties we attended after Tuesday night. I'm personally inviting all to the next one in two years.
1) The Fed is inflating all asset classes EXCEPT for cash savers by introduction of QE2. Cash is longer king. We saw day 1 yesterday. Cash savers will be punished. Smoe call it a money grab by the Fed. I concur
2) When the stock market goes up folks and businesses feel more wealthy. Therefore they are more likely to spend or invest. The Fed is encouraging us to take risk and they provide the net. Jump in the pool or miss a good party. Good times.
3) Q2E has nothing to do with interest rates. They are already at historic lows. Bernanke said they were likely to remain that way for an indefinate period of time. Our lifetimes? Perhaps. Prolonged low interest rates. Goggle Japan and lost decade(s). Savers will be punished unmercifully via a slow steady drip.
4) Currently, a lot of balance sheets have a lot of debt and next to no equity. QE2 is nothing more then fresh cash to force those to deleverage. Make your balance sheet shinny and clean. It's impossible to get a loan if your balance sheet is all icky. As far as illiquid assets becoming liquid............What rug exactly do these illiquid assets get swept under? That must be some raunchy rug. Who's going to be the brave soul that eventually shakes it out?
My advise is to jump on The USS FED for the time being. ALL Aboard. Pass the Grey Poupon please. Just make sure you have the Captain drop you off via his helicopter before the USS FED runs aground. There will be signs when to jump out of the pool..........Until then, party on Garth
MJ
edited for spelling
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I think quantitative easing will be a wealth destroyer for the middle and upper middle class. Combined with the weak economy, it will curtail buying of five-figure and six-figure coins, and may accelerate selling of these same coins as owners deplete their assets to survive financially. The ultra-high-end coins may not be affected, but the next tier down certainly looks vulnerable.
My Adolph A. Weinman signature
<< <i>Methinks smoe of you guys have been to too many Tea Parties! LOL
Soooo - let me get this straight:
The government borrows money in the past and gives IOU's in the form of Treasury Bonds. The government then buys those IOU's back for current cash - and some say the government is borrowing more money? What am I missing here?
All that's happening in my mind is illiquid assets are becoming liquid .... and we the taxpayers are saving huge amounts of interest in the meantime. What's not to like? >>
Me thinks that some of you put too much trust in those that ultimately determine your quality of life.
QE2 is the equivalent of you transferring the balance of a credit card to a new credit card to avoid the payment. As you continue to do this each time the bill comes in, it eventually spirals out of control to where there is no way you will ever be able to pay off the balance. The difference here is that sooner or later the credit card companies will cut you off and quit giving you new credit cards. In the case of QE2, since our creditors (China and Japan) have cut us off by not loaning us more money (buying our treasury bonds), the Fed has become the credit card company and is indirectly buying the debt.
The Fed is seeing to it that that this bill for the debt is being passed on to you and I. We will pay with devaluation of our dollar savings, price increases to compensate for the dollar devaluation, and a monster of an I.O.U. (the bonds themselves) that will be passed on to future generations. Keep in mind that there is always current interest due on the government's debt and all of this new debt is being created primarily to keep up with the interest payments. And they put Bernie Madoff in prison for this kind of behavior!
Debt is the lifeblood of the financial industry. Loaning you and I, and now Washington, money is what puts money in their pockets. As an agent for the financial industry, the Fed's modern role is to assist in creating demand for credit. Their number one tool is low interest rates. Market bubbles (dot.com, real estate, commodities and now maybe even rare coins) are created with this demand as speculators have cheap money at their disposal. A market "bubble" is nothing more than an overpriced market that was fueled by careless speculation. Eventually the speculator realizes he was "had" and the rush to get out is even more dramatic than the rush to get in.
Even with record low interest rates, the American people have gotten smarter. They have learned that the true fix is to get out of debt and to save. Realizing this, the Fed has engineered a way to force you out of your dollar savings. By destroying the value of your dollars (QE2) they are forcing savings to be converted into speculative investments in order to maintain their value. This drives up markets, including the value of rare coins, for the wrong reasons and creates the illusion that all is well. The Fed pretends to believe the fix to an economy that spent more than it had is to generate more spending funded by more credit. In reality they are just doing what they do best - creating demand for credit.
It's a snowball heading down the mountain. How will all this end? Very, very badly for those that drink the kool aid or the tea and do not prepare for the consequences. Lifelong savings that are sitting in the bank will be destroyed. It has nothing to do with politicians and everything to do with those who control the politicians. Learn how bubbles are created, learn how to see them forming, get in on the ground floor and get out before the elevator reaches the top. Right now the elevator has already reached the "dollar" penthouse and is on it's way back down. The Fed wants you out of dollars and will make it unprofitable for you to remain in dollars. Learn to play the game and profit from your knowledge. It's the only thing you can do to protect your financial security.
No Way Out: Stimulus and Money Printing Are the Only Path Left
I would ask this question: the cheapened dollar makes stocks, rare coins and bullion automatically more pricey, followed by an undermining of our credit throughout the world with consequent increased interest rates.
What is the practical way to prepare for this? Coins rise in value as the dollar falls, then rise again as inflation drives people to "limited quantity" goods like gold and truly rare coins and collectables Is this the time to convert cash to bullion or is there another play here to protect yourself, like loading up on stocks or betting on foreign currencies? Does this mean we can anticipate the Dow at 20,000 based on devalued American dollars?
Commems and Early Type
<< <i>We lay people really appreciate the lucid discussion here, it's great to hear from so many knowledgable forum members on this topic.
I would ask this question: the cheapened dollar makes stocks, rare coins and bullion automatically more pricey, followed by an undermining of our credit throughout the world with consequent increased interest rates.
What is the practical way to prepare for this? Coins rise in value as the dollar falls, then rise again as inflation drives people to "limited quantity" goods like gold and truly rare coins and collectables Is this the time to convert cash to bullion or is there another play here to protect yourself, like loading up on stocks or betting on foreign currencies? Does this mean we can anticipate the Dow at 20,000 based on devalued American dollars? >>
You can expect the Fed to do everything in its power to keep the Dow bubble intact. You can be best prepared by learning their game and playing it well. Since dollar value is dropping, convert your dollars into something that is rising in value. But never forget that what goes up must come down. I would forget foreign currencies as all central banks are currently devaluing their currency. They want us out of dollars and into markets. Might as well play along and profit. Gold and silver coins are an excellent avenue, just be prepared to sell when the top is near.
No Way Out: Stimulus and Money Printing Are the Only Path Left
CNBC Alternative Investing Site
<< <i>This gets an Award for most confusing / misleading topic title.
To just about everyone "QE2" is Britain's Queen Elizabeth II.
When I read this title I thought that the ship QE2 had sunk and salvagers were bringing up rare coins from the ocean floor wreckage.
<< <i>
<< <i>Methinks smoe of you guys have been to too many Tea Parties! LOL
Soooo - let me get this straight:
The government borrows money in the past and gives IOU's in the form of Treasury Bonds. The government then buys those IOU's back for current cash - and some say the government is borrowing more money? What am I missing here?
All that's happening in my mind is illiquid assets are becoming liquid .... and we the taxpayers are saving huge amounts of interest in the meantime. What's not to like? >>
Me thinks that some of you put too much trust in those that ultimately determine your quality of life.
QE2 is the equivalent of you transferring the balance of a credit card to a new credit card to avoid the payment. As you continue to do this each time the bill comes in, it eventually spirals out of control to where there is no way you will ever be able to pay off the balance. The difference here is that sooner or later the credit card companies will cut you off and quit giving you new credit cards. In the case of QE2, since our creditors (China and Japan) have cut us off by not loaning us more money (buying our treasury bonds), the Fed has become the credit card company and is indirectly buying the debt.
The Fed is seeing to it that that this bill for the debt is being passed on to you and I. We will pay with devaluation of our dollar savings, price increases to compensate for the dollar devaluation, and a monster of an I.O.U. (the bonds themselves) that will be passed on to future generations. Keep in mind that there is always current interest due on the government's debt and all of this new debt is being created primarily to keep up with the interest payments. And they put Bernie Madoff in prison for this kind of behavior!
Debt is the lifeblood of the financial industry. Loaning you and I, and now Washington, money is what puts money in their pockets. As an agent for the financial industry, the Fed's modern role is to assist in creating demand for credit. Their number one tool is low interest rates. Market bubbles (dot.com, real estate, commodities and now maybe even rare coins) are created with this demand as speculators have cheap money at their disposal. A market "bubble" is nothing more than an overpriced market that was fueled by careless speculation. Eventually the speculator realizes he was "had" and the rush to get out is even more dramatic than the rush to get in.
Even with record low interest rates, the American people have gotten smarter. They have learned that the true fix is to get out of debt and to save. Realizing this, the Fed has engineered a way to force you out of your dollar savings. By destroying the value of your dollars (QE2) they are forcing savings to be converted into speculative investments in order to maintain their value. This drives up markets, including the value of rare coins, for the wrong reasons and creates the illusion that all is well. The Fed pretends to believe the fix to an economy that spent more than it had is to generate more spending funded by more credit. In reality they are just doing what they do best - creating demand for credit.
It's a snowball heading down the mountain. How will all this end? Very, very badly for those that drink the kool aid or the tea and do not prepare for the consequences. Lifelong savings that are sitting in the bank will be destroyed. It has nothing to do with politicians and everything to do with those who control the politicians. Learn how bubbles are created, learn how to see them forming, get in on the ground floor and get out before the elevator reaches the top. Right now the elevator has already reached the "dollar" penthouse and is on it's way back down. The Fed wants you out of dollars and will make it unprofitable for you to remain in dollars. Learn to play the game and profit from your knowledge. It's the only thing you can do to protect your financial security. >>
Waiiiit a minute - you can't have it both ways. You can't say all the money is going to interest rates to service the debt and then not acknowlege the vast savings that record low interest rates are causing. Bottom line is this: fiscal policy DEMANDS inflation. Without the abilility to inflate the economy 6% while reporting it as 2-3% for Social Security purposes, the country is bankrupt. We WILL inflate - and there's nothing wrong with it. Deflation is the devil here, folks. Printing new money to buy old borrowings and at the same time driving interest rates to record lows? Brilliant! All hail the Fed.
<< <i>Methinks smoe of you guys have been to too many Tea Parties! LOL
Soooo - let me get this straight:
The government borrows money in the past and gives IOU's in the form of Treasury Bonds. The government then buys those IOU's back for current cash - and some say the government is borrowing more money? What am I missing here?
All that's happening in my mind is illiquid assets are becoming liquid .... and we the taxpayers are saving huge amounts of interest in the meantime. What's not to like? >>
Buys back with newly printed cash that would not have been printed otherwise if it weren't for QE2. Saving interest would also be another benefit.
With this method, the government is printing more money that never existed and would not have existed if not for QE2.
Someone asked about how much in Treasuries will the government sell over these next few months that they are buying Treasuries. (essentially asking why are they both buying AND selling) My point was they printed new moneythat we never had before to buy AND are borrowing more money from the same suckers that loaned it to us in the first place: Mo Money... Mo Money... Mo Money!
I'm not surprised that Justacommeman thinks QE2 will help rare coins.
Those with a particular wealth can keep doing what they do in up or down economic times. But, I still ask, are those less fortunate wealthy who held back now feeling well enough and wealthy enough to increase rare coin purchases? I don't think we're out of the woods yet, and would look more to the "no longer need of any QE" as a watershed event....
but then again, I'm not that wealthy.
The problem of constantly pushing off debt down the road is what got us to where we are today. That in a nutshell describes our economy over the past 30 years. Regardless of any immediate illusory savings, such a scheme always ends of toppling on its creators. The FED/Treasury/Big Banks have many means to induce liquidity without resorting to the simple purchase of TBonds. Currency swaps, repos, derivatives, GSE's, agency debt purchases, FED foreign custodial account purchases, POMO's, direct stock market purchases via the exchange stabilization fund, and a host of other methods are at their disposal. If one looks at just the money supply it's quite apparent it hasn't kept up with TBond purchases, TARP, QE1 or QE2. These guys now have basically undetectable methods not viewable by J6P to induce unlimited liquidity that work around the standard monetary system. They don't need approval by congress or anyone else. There's no way they could have done this work in the light of day without being exposed.
The rare coin market is driven mainly by collectors, but only at specific times. The rare coin markets of 1977-1980, 1988-1990, 2005-2008 were heavily infiltrated by investors and speculators, many of which used to be just collectors or dealers. When the investors show back up, the collector is pushed to the side as market dynamics change. The rare coin market is never just collector oriented.
roadrunner
In the end, all of this will have cost us nothing and saved us billions. While keeping us out of a Depression. Brilliant.
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>Bottom line: The Fed is destroying the value of your money. If they can't do it with inflation they will do it with devaluation. Thank you Fed.
Oh, puh-leeze. Show me one thing other than the precious metal bubble that costs you more than it did before the crash. Oil? Nope. House? Nope. Car? Nope. The Fed ain't destroying nothing - they're saving the darn country billions in interest payments and keeping us out of a Depression.
<< <i>
<< <i>Bottom line: The Fed is destroying the value of your money. If they can't do it with inflation they will do it with devaluation. Thank you Fed.
Oh, puh-leeze. Show me one thing other than the precious metal bubble that costs you more than it did before the crash. Oil? Nope. House? Nope. Car? Nope. The Fed ain't destroying nothing - they're saving the darn country billions in interest payments and keeping us out of a Depression. >>
For one thing, the longer line of Americans needing government assistance is costing me more. You're forgetting that Fed policy created the crash and all of the bubble markets, an effect that took time to boil over. Other than instant devaluation of the dollars in your wallet, the effect of current policy will be felt later. Lay off the kool aid.
No Way Out: Stimulus and Money Printing Are the Only Path Left
We are talking QE2 - not your fantasies about what may or may not have caused the crash. I'm still waiting for hard evidence of all this destruction being caused by the Fed. A higher Australian dollar? Shocking - how will we afford all those necessities we import from the Aussies?
No Way Out: Stimulus and Money Printing Are the Only Path Left
Germany's finance minister Wolfgang Schaeuble said on German television that "with all due respect, US policy is clueless."
Obviously not a rare coin collector!
As mentioned QE2 is trying to make sitting in cash a bad idea. Money will move to riskier assets. Their price will increase. People will feel wealther and spend more. An additional effect that is supposed to happen is the large banking institutions holding these Treasuries will have more money to lend. Unfortunately, they haven't self soothed from the home and commercial real estate lending crash. The commercial lending crash is still happening to some extent. So, I can't help but wonder if the banks will hold the liquidity and use it for their own ends instead of lending it. No one can force them to lend. The result from that is a small wealth effect and similarly small increase in spending, in my opinion. "A short lived sugar rush." This is why I don't see an effect on the rare coin market.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>We are in debt $10 trillion dollars - we HAVE to have inflation. Without inflation, the debt becomes even more staggering. Without inflation, Social Security bankrupts the nation. All hail inflation! >>
So, you're argument is to reduce the true value of government debt by reducing the true value of the American citizens' holdings? Drink more kool aid.
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>Note to tradedollarnut - we are bankrupt. The only thing keeping us afloat are the Treasuries (I.O.U.'s) being bought with money created out of thin air. Who do you think is on the hook for the I.O.U.'s? The very same people that ultimately pay all government debt. >>
Past decisions that have nothing to do w/ the Fed and QE2. Given the FACT that we owe all this money and have Social Security deficit looming, how about YOU come up w/ a different course of action for the Fed. What would YOU do given reality? No fantasies about not having borrowed in the 1st place - that wasn't the Fed.