Bullion Vs. Numis?

You used to be able to find more plentiful sales grounds for coins when silver was lower. Granted particular key date's rarity insulates them with hefty premiums away from their bullion content. A 38D Walker, CC Morgan, or 16D merc are generally already in the hands of people that know what they are. They have been for many years. Even if those people are not collectors, that does not mean they are ever available at bullion rate. It is because they hold them thinking the coins are worth such premiums. They have always only rarley been in the marketplace compared to the more common coins.

It goes in waves as the bullion market climbs and dips. Rapid higher climbs in the metals market are attached to the general population and economic conditions. Yes, more people sell off the G, VG, and F coins as melters just because of their own situation might call for it.

The opposite side of the market are the people that are trying to leverage themselves into a position for when the market rises yet again. These people gobble up everything and are often seen as the only buyers by most outside the hobby. Since their presence is seen in such numbers by those outside the hobby, the general baseline for values can become blurred into spot translations. Speculators and people only attached to coins through that same blurred understood value is what they can sell it for.....what the bullion gobblers are buying at.

The bullion guys are hardest hitting the AG-F collectors. Such items as common barbers, or SLQ's are now through osmosis into a competition for market share among the buyers....but no one will dare go above X back from spot. The harder the position someone is in, the more they will move down the price into the bullion priced marketplace dictated of course by current spot price of the time..

Bullion prices have drove up the bottom and has nibbled away from the top. Plenty of people are in tough times and selling their collections to spot buyers...The numbers of sellers in those positions erodes the market price every time someone is leveraged into selling a key /or semi key for spot price due to personal financial hardship.

Ebb and flow. It has always been this way in the hobby. Just that 4-6 years ago when everything was sunshine and roses people both inside the hobby and out drove up the market for coins with their disposable income. Similar to the housing market or anything else involving any real amount of money based on speculation of future market conditions. It is now that the newer collectors are actually seeing it happen for the first time.

JMO.

As a follow up on my initial question, where does this leave Numismatics after the economy returns to a more normal state of affairs? Some of you have seen this before, most likely in the 70's. I have heard that a lot of silver was melted at that time and many coins were removed forever from potential collectors' hands. This process of elimination must make what remains even more unique if not rare.

I don't think there is such a thing as a "numismatic premium", only a "numismatic value". The price of a 1909S VDB Lincoln is not based on the copper value + a premium, it's based on the supply of, & demand for, the coin itself.

In times like this coins whose bullion value exceeds their numismatic value will be melted down. If enough coins are melted the numismatic value of the remaining coins will increase.