Coin Prices During Recessions

Numismatic values are very loosely linked to the fine arts market and bullion markets.

As such, in a deep recession, most people will put their faith in other things than fiat money investments. Nevertheless, cash is king when you need it. Get the balance right.

The bullion market, and particular gold, is seen as a hedge against inflation which will very surely be with us in 2 or 3 years' time, as the World needs to pay off it's debts with inflated fiat money.
I paid off my mortgage in a high inflationary period when my real income stayed much the same, but the numerical dollar value of my income increased rapidly during the 1980's.

Over a 10 to 15 year period the stock market is still the best place to invest. Most people do this through their superannuation or mortgage (or both). It also helps if you have never been divorced; they are always expensive.

I don't invest in coins.
I have been building my coin collection for most of my life.
Nevertheless, the sum value of all of the coins in my collection has been in continuous rise, if a 5 year weighted average value is considered.
But my house value and superannuation have performed better over a 30 year + period.

I am in my mid 70's now, (hopefully with some acquired wisdom), and that has been the past economic experience of my life.

Basically coins are not something people need if and when buying food is important. However, I've been a coin collector for well over 60 years now and so far I've never seen coin prices drop. Stay the same, yes, but so far never gone down. This is something odd too since when you try to buy them and there is a so called recession in progress, they are still the same or even higher in prices.

As with many very large questions, I think the answer is "it depends," and "there is no simple answer."

I think:
- relatively low value coins (think the majority of what is found on e-bay) drop during recessions for the reasons mentioned by others.
- high value coins do not necessarily drop with recessions, e.g. the 2020 market for rare coins seems to me to be quite strong
- finally, and a very important effect, coin prices tend to move to some extent with precious metal prices, which usually go up in recessions or times of financial uncertainty

Finally, I have never seen data and analysis to support answers to broad questions like this. Maybe because the market is too diverse to give a single answer.
Certainly the raw data exists, and one can find analyses of small segments of the market ...

Good stuff.

Zurie:

Very interesting website. Thanks for posting.

Hi,

Thanks for all the replies and information.

I'm planning on buying an Athenian Empire Tetradrachm. Not to make money but because I like them. The ones I am interested are going for about £1000.

However I believe there will be a recession next year and didn't want to buy one and find it dropped in value by 30%. I know it could still drop 30% or more but at least it will be an informed decision.

Thanks again

Whaddya mean NEXT YEAR? You are already in recession: https://www.bbc.com/news/business-52986863




Just looking at that one coin in relation to the original question ...

The deepest recessions since 1950 as measured by GDP and unemployment were 1957-58, 1973-75, 1980-82, 2007-09 and 2020

Here is what the chart says about 1909-S VDB prices in relation to those recessions:
1955-60 Increased in all grades
1970-75 Increased in all grades
1980-85 Increased in all grades
2008-10 Decreased in low, increased in high grades.
2018-20 No change in low, decrease in high

Other periods which saw decreases were 1965-70 and 2010-2016. These were both periods in which PM prices were in the doldrums (declining or stagnant).

My observation from just this one example is that prices can drop in especially severe recessions (since 2007-9 and 2020 were the worst, at least by the numbers), but may be unaffected by most. The only 10 year periods that saw declining prices for the 1909S VDB were 1965-75, and the period since 2005. But it would be hasty to draw conclusions without looking at a lot more examples