Is Indian Gold Worth Collecting?

One problem with gold as an asset is that it has value simply because it's precious. Your car doesn't need it even as a catalyst. So compared to oil gold price would be expected to be much more volatile.

Except for governments. Much of the world's gold is held by governments. It's a hedge. It's a source of off-the-books funding for slushy activities like proxy wars and underfunded pet programs (I've been known to do this...).
When a government like India, Brazil, China, South Africa, Russia, Iran or the US accumulates gold the price is stable. But when they dump reserves, look out below. Ten billion dollars worth sold over a week would probably send gold to $500.

I like gold coins. But I also like the Breitling watch I wear. It cost me four off-the-books eagles 20 years ago. Without those eagles I wouldn't have it.

I would assume a person who has little to no debt and a nice nest egg stashed away, would prefer higher interest rates. Can you imagine being able to simply go into your bank and buy a 10k CD that pays 6 or 7 percent interest...that would be sweet.

Of course the flip side to that coin is high rates on your car and mortgage payments. For people with small or no debt, I would think higher interest rates could be beneficial. I think that's what Terry is eluding to above about 75 year old people chasing risky investments because they can't make money in conventional fashions.

There's really no easy money to be made right now. My great grandfather had about 250k in CDs upon his passing in the late 80s. It worked great for him because he locked in at very high interest rates and had zero debt to worry about. It's hard on younger people who are starting out and have no choice but to borrow money from banks and high rates. You better do your borrowing very soon...

I think we are floating on a sea of zero percent interest rates. When the Fed finally starts to raise rates this stock market will probably head south. I don't know how all this will affect prices of gold and silver coins. If there is enough fear then maybe gold prices will go up, but if we head for another recession then gold will probably go down even faster. There is really no place to hide if this economy falls apart. Government bonds will help you keep what you have but you won't make any money. 30 year bond only pays a little over 3%. So you have a million dollars in long term government bonds and you will get 3% before taxes. That will be much less than %30,000 a year on a million bucks. You might as well just buy your favorite coins.

It is worth noting that the consistent maintenance of a near-zero interest rate has driven most "savers" into either hard assets (gold, silver, commodities, land, water) or speculation (stocks, houses, 401k plans) -- cash is the new "bad thing" and being gone after with abandon. More have gone for speculation than cash and hard assets.

To paraphrase Hobbes, it would have been better to quickly suffer a bite from a menacing dog and allow our wounds to heal over time; instead we "feed the beast" (favoring speculation over hard assets) and risk getting devoured in one hungry gulp by a government-sized monster. Government's continuing insistence on selling the financiers' myth that constant speculation is the only way to build wealth has benefits to no one save Wall Street and the Fed.

That being said, gold (and to a lesser extent, silver) are questionable assets in a time of government crisis, since they only retain value in as much as there is a buyer to purchase them from you or a seller who will accept them in a transaction of goods. If we were to suddenly return to the 1600s, barter goods (foods, fresh water, medicine, guns and ammunition) would be immensely more valuable. The historic use of gold as a form of money is derived entirely from the fact that there has always been a buyer for gold at some price level, up to the use of gold or silver to pay taxes and mortgages to the Crown or Government; if this were to be disrupted by a complete government or economic collapse in, say, the US, gold would rapidly be converted to goods in the form of the outflow of specie to countries with a functioning economy. Those who still had gold would trade it for goods, and those who did not have gold would be forced into barter (goods and services for like commerce.) This would have the effect of greatly increasing the relative value of goods vs. gold, and "investors" such as they were would gladly dump all their remaining gold for more-profitable and much more useful goods. Gold may look pretty, but it can't heal you, feed you, quench your thirst, or defend you, and therefore its "value" is more extrinsic than intrinsic.

I agree with you, Terry.

Funny thing is CDN ran a piece this week on Walking Liberty half dollars, based on prices in 1989 vs. today. The lone table they posted was for 1919, and it shows that an MS65 1919-D Walker purchased in 1989 has appreciated >750% in value in less than 20 years, and almost all of the scarcer and key dates and mint marks have increased 30 to over 300% in collector grades.

This has to be balanced against inflation (how much was a $1000 coin in 1989, if measured in 2015 dollars?)

Even with inflation taken into account key date coins in popular series (walkers, morgans, SLQ, IHC) seem to win way more than they lose when it comes to appreciation, the market bubble of '08 not withstanding.

About $2,600 if you believe the manipulated CPI index. In the real world possibly as much as twice that. So you need about 300 - 350% increase to break even.