State Of The Economy And Coin Prices

I just looked at the Dow Jones Industrial Average range for today:
7882.51 - 8687.11

Quote: In Old Soviet California, they put lien on you!

Good old socialist California. I expect pretty soon they will start taxing our rare coin investments as well. Nice thing is, they don't know what I have nor will they ever. Cache and GPS sounds pretty good to me.

"How will the recent collapse of the financial system and the recession affect coin prices and investments?"

On the short term (the next year or two), this is hard to say. Some folks may be forced to sell to raise cash. But probably, demand will slow down more than anything as folks conserve cash or limit discretionary spending - as they already have done - at least for the lower end material. Bullion (or coinage treated as bullion) is holding well, and should continue to do so and should continue to move up in value. Longer term, looks like there will be much in the way of inflation, and if the inflation is high enough (which it likely will be), then there is the possibility of heightened demand for coins as folks look for any asset with which to preserve value. I would not be surprised to see cumulative inflation on the order of a hundred percent or more over the next few years. Presumably wages will go up too, but not as much as overall prices for things in general. Something has to change in order to repatriate manufacturing back to the US because of the damage being caused by massive trade deficits of the past few years. One way to repatriate manufacturing without legislating trade tariffs is through readjusting the value of currency. A good example of how this can work can be seen in the price of oil when it reached over $140 per barrel. At that price level, the cost of shipping goods from China negated any advantage to manufacturing over there for some businesses. As a result, some US manufacturers closed shop in China and returned to the US. But its only a trickle at this point.

As for investments, seems like "everyone" is selling right now. A mini panic seems to have set in. This is only making things worse, as it feeds on itself. So, it will be hard to find any investment that will do good over the next few months. I expect coins to hold up much better than stocks or bonds or whatever, and so far they have. Fortunately, coins can't be disposed of as easily and quickly as stocks can, and it takes many months for any notable changes in pricing to work its way to collectors.