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Bedrock of the Community
United States
20753 Posts |
I've been collecting coins for over 60 years. So far never seen coin prices drop for some reason regardless of anything. The greatest amount of coin collectors do it as a hobby so even during recessions, unless desperate, they just don't get rid of coins. Actually the same is true of any collection although the entire hobby may have flopped. Beanie Babies for example. Everyone I know that collected them still have them. No longer a market but they still have them because they weren't an investment, just a hobby. Sport type cards, US Stamps, etc all have lost massive values over the years but people that collected them usually still have them. May have lost interest but still have them. Another reason most people do not get rid of hobby items during bad times is the lack of a place to unload them. Example is those sporting cards just don't have a place to sell them except ebay possibly. Same with US Stamps, Hot Wheel Cars and those dumb Beanie Babies. If your into coins as an investment and if times go bad, the values of the coins may stay the same but finding someone to purchase them may not be easy. Right now with this coin boom being so big we have over 3 coin shows a month around me. Massive amounts of new coin books appearing everywhere. Coin collecting stuff like 2x2's, albums, folders, etc. poping up everywhere. A new TPG service everywhere you look. If times go bad all that will end or really slow down but all that stuff will then be one tables at a really cheap price. Usually at a flea market. At the last coin shows I saw a table with well over 20 different books on coins. Everyone is becoming an expert on coins sort of like all those people that tell you how to buy properties for no money down. |
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Valued Member
United States
130 Posts |
I haven't been collecting long enough to have experienced the 1999-2001 period when things were soft. However, like anything, it's a question of how hard and how long. If the demand drops and some must sell, a correction could occur especially if it takes 3 years to right things and, regardless, there will be some who must sell.. The new stimulus package for business and the lower interest rates could easily keep a recession away. If people spend their $600-$1200 tax rebate, then that will add substantially to the recovery. More likely they will spend it to pay mortgages or credit card debt. Right now, it's a coin flip for the economy and I'd keep an eye out for coin buying opportunities. But, isn't that where we all stand now anyway? :)
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Valued Member
United States
226 Posts |
I for one would be happy if coin prices softened due to our mild economic woes. Coin prices have jumped up considerably since I began collecting in 1998 and buying key dates has been a strain on my coin budget. I don't ever foresee coin values to plummet the way other collectibles have, because Barbie's and beanie babies are fads that come and go. Whereas coins have been around throughout history and have a devout and faithful following. I plan on spending my $600 on a nice 1886 T2 AU-MS IHP
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Pillar of the Community
United States
5318 Posts |
Imo, this "newly discovered" recession has been due since 2000, but merely forestalled by excessive liquidity pumped into markets by AG and now BB (thank you,wise and all-powerful Fed). Nobody wants to hear this...but I don't think the true depth of crisis will be known until the next wave of mortgage resets hits homeowners and rebounds to Wall St. Credit-Suisse did a very nice analysis of the reset schedule which you can find online. If we have an all-out credit/banking panic, do you think credit-crunched homeowners--particularly the fixed-income crowd are going to hold onto collections? Nope--they're going to sell to remain solvent. The same goes for all those bright people who bought bullion at peak prices. So there--is that bleak enough?  Edited by KurtS
01/25/2008 5:12 pm
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Pillar of the Community
United States
1247 Posts |
The answer to your question is that coins can do almost anything. And they have in the past. They've gone with bear markets and against them. The nearest thing to a sure thing is that markets won't do what is "logical" because humans are anything but that. The theory that the all wise, all knowing crowd knows exactly where prices should be (The Efficient Market Hypothesis) is a farce. Markets endlessly overvalue the idea that things will remain the same and undervalue big change. The very concept of investing is not logical. What happens when prices spike? Everyone jumps on the me too band wagon at the precise moment when that spike is bringing them closer to the top--when risks are increasing and rewards are decreasing.
IMO, the best coin investors are people who aren't really investing but are dedicated collectors first. It doesn't matter to them which way it goes. If prices come down they start buying. In some cases prices might not come down at all if there's a dedicated collector base behind something such as Colonials, EACs, Seateds, etc. If their collections become profitable it because they "invested" the same way Warren Buffet "invests"--simply using common sense and discipline. Warren Buffet is not a genius. The stupidity of the "all wise" market just makes him look that way.
A really bad recession in the U.S, IMO, is long over due. The fed may forestall it but I don't think they are going to stop it. Because deficits do matter, debt does matter, consuming more than you produce does matter, not saving does matter. And most important of all, trillions and trillions of dollars in Structured Voodoo Investments do matter.
But little weenie fed chiefs don't matter.
Edited by longnine009
01/25/2008 6:50 pm
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Member
United States
3242 Posts |
Up coming it been here since W (Halibruton)Chaney moved in the oval office.and a new room mate Black water.the USA I was born in a went to war for is now just a company with a elected boss
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Pillar of the Community
United States
1283 Posts |
Lately the US Dollar has been declining as coins have been rising.
It's arguable that recessions can make the coin market decline, and perhaps that's true. I'm sure there's been market analysis that can confirm it either way.
But there seems to be a paradox. A declining economy generally means a weaker dollar, which usually causes gold and silver prices to rise (sound familiar?). And rising gold and silver usually has a positive effect on numismatics.
Market *perception* has a profound affect on precious metals, stocks, bonds, etc. But IMO perception has very little effect on numismatics as a whole. It only affects speculation within the numismatic world itself. Such as the latest craze with Lincoln cents. But I think the entire numismatic world is only adversely affected IF the economy is so bad that enough collectors can no longer afford their hobby.
These are all just my opinions and observations... from an admittedly uneducated perspective. Perhaps somebody with a broader knowledge base can comment.
Edited by USArmyParatrooper
01/26/2008 9:43 pm
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Pillar of the Community
United States
1984 Posts |
First, a point: recessions are measured on past economic data, so recessions are rarely 'upcoming.' When you're in one, you're in one, but you don't know exactly if you're in one and when it started until the data are released.
Second, the idea that we were 'overdue' for a recession is more like a self-fulfilling prophecy. The Fed created the environment for recession by hiking interest rates based on the notion that rising oil prices and home values were inflationary. I happen to have extreme disagreement about those principles. The ratcheting up of interest rates did not appear to be based on any logic that I could see. Hiring wasn't really happening and I don't think wage growth matched the productivity gains that usually offset higher wages. There are a lot of other reasons the Fed should have gone much slower with the rate increases, but hey, I'm not the Fed Chairman, so nobody listens to me.
Third and last, the coin market: a deep recession may cause sellers to come out and dump their coins, but they are selling into a strong bull market in gold and silver, so I look for prices on coins to level off generally, but not decline. Also, remember that recessions work differently for different segments of the economy and different levels of the income ladder. A recession may take lots of people down with it, but there will always be people with money looking for opportunities. If the stock market and real estate are tanking, where is that money going to go? I look for people to try to do anything to keep from selling their extreme coin rarities. If you're an antiques, paper, or art collector, you might get a chance to back up the truck though.
All my opinion, so you know, grain of salt and all that.
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Pillar of the Community
United States
1934 Posts |
There were hard times around 1989-90, too. I was customer service manager at a supermarket that did a million in cash and a million in checks each week. On the 3 - 11 shift, I audited all tills from the day shift and bought all many, many silver coins from the tills. I assumed some people were breaking into their coin stashes -- most likely senior citizens. Sad but true.
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Pillar of the Community
Australia
9428 Posts |
Just package your coins up, and send them to me Western Australia. We are not taking part in the recession, so they will be safe here. If the recession gets to bad over there, please feel free to migrate to W.A., we can't get enough workers. Jobs are everywhere. Steve  |
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Pillar of the Community
United States
628 Posts |
If we go into recession, we won't know until we've been in it a while, usually close to the end of it anyway.
I'll guess good grade collectable coins will fare well.
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Pillar of the Community
United States
1840 Posts |
I haven't been back in collecting for long, but can relate to my other hobby, fishing. During the last few downturns in the economy there were a lot less boats on the water. It was a good thing. All the yahoos went away and, for the most part, the hardcore fishermen were the only ones left. If there is a recession, I think the first people to go will be the uneducated yahoos that keep the Coin Vault in business. I think this will result in a stagnation or decline in coin values which will benefit the hardcore collectors.
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Pillar of the Community
United States
5318 Posts |
quote:
I think the first people to go will be the uneducated yahoos that keep the Coin Vault in business.
Yeah--but I actually feel sorry for all the fixed-income retirees those scumbags prey upon. I hope someday those CV cons are on the street, when I'll toss a few coins their way.  Edited by KurtS
01/27/2008 3:22 pm
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Valued Member
United States
60 Posts |
Lets see. In the early 90s everyone was a dot com expert. The new century was time to be a house flipping genius.
The last couple of big coin shows were shoulder to shoulder with new coin buyers "investing" in coins.
While lots of folks lost big on tech and house bubbles, plenty still rode the wave expertly enough to come out ahead.
The coin market is way less capitalised than most others. I believe that the new, poor (middle class) coin "investors" could cause a panic sell of coins in the $300 to $3500 price range. IMO, bullion type, inexpensive and very high end coins will be the safe bet in the current, near future market.
But who the hell am I to know!?
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Pillar of the Community
United States
1691 Posts |
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Posted 01/25/2008 1:21 pm
