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jwither

Here is a link to an "article" (actually an advertisement) by Heritage for one of their recent auctions.  I include it because prior to and shortly after the bubble peak in Union and ZAR, there were comments posted here which either claimed or implied that the most elite coins don't lose value.

https://coinweek.com/auctions-news/heritage-long-beach-signature-sale-top-5-highest-prices-paid/

Well, this link shows that even in an otherwise relatively healthy economy under the loosest financial conditions ever, elite coins can and do still lose value.  A 1793 NGC MS-65 BN CAC Chain cent sold for $999,000, down from $1.38MM back in 1/2012.  The relative famous 1804 dollar (this one a PCGS PR-62 but probably actually an XF) sold for $2.64MM USD, down from $3.737MM in 4/2008.

There are other cheaper coins profiled in the "article" which did better but when the financial levitation act ends, it should really be a sight to behold to see how far even ultra elite coins decline.

To provide an indication of the existing bubble price level in US coinage, the 1822 half eagle (unique in private hands of three known and my #1 US regular issue coin) last sold in the Eliasberg sale in 1982 for $687,500 USD.  This was when this amount was actually real money for any coin, unlike today.  The PCGS Million Dollar club estimates it's current value at $6MM USD and purportedly, JP Morgan offered $35,000 for one of the two then privately owned coins back in 1941.

I trace the credit mania to around 1982 but fiat money inflation has been persistent since the 1930's.  By my reckoning, every cent and more of the appreciation since 1982 has been due to the credit mania.  Most actually since 1941.

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EWAAN Galleries
On 6/27/2018 at 1:50 AM, jwither said:

Here is a link to an "article" (actually an advertisement) by Heritage for one of their recent auctions.  I include it because prior to and shortly after the bubble peak in Union and ZAR, there were comments posted here which either claimed or implied that the most elite coins don't lose value.

https://coinweek.com/auctions-news/heritage-long-beach-signature-sale-top-5-highest-prices-paid/

Well, this link shows that even in an otherwise relatively healthy economy under the loosest financial conditions ever, elite coins can and do still lose value.  A 1793 NGC MS-65 BN CAC Chain cent sold for $999,000, down from $1.38MM back in 1/2012.  The relative famous 1804 dollar (this one a PCGS PR-62 but probably actually an XF) sold for $2.64MM USD, down from $3.737MM in 4/2008.

There are other cheaper coins profiled in the "article" which did better but when the financial levitation act ends, it should really be a sight to behold to see how far even ultra elite coins decline.

To provide an indication of the existing bubble price level in US coinage, the 1822 half eagle (unique in private hands of three known and my #1 US regular issue coin) last sold in the Eliasberg sale in 1982 for $687,500 USD.  This was when this amount was actually real money for any coin, unlike today.  The PCGS Million Dollar club estimates it's current value at $6MM USD and purportedly, JP Morgan offered $35,000 for one of the two then privately owned coins back in 1941.

I trace the credit mania to around 1982 but fiat money inflation has been persistent since the 1930's.  By my reckoning, every cent and more of the appreciation since 1982 has been due to the credit mania.  Most actually since 1941.

So we are all 100% in agreement numismatics is a bubble? 

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Pierre_Henri

Numismatics is a hobby like weekend fishing or golf.

If Numismatics is a bubble, then so is watching TV or bowling or keeping birds in an aviary.

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jwither
5 hours ago, EWAAN Galleries said:

So we are all 100% in agreement numismatics is a bubble? 

Financially, US coins are absolutely in a bubble, especially those which are subject to disproportionate financial buying.  This also applies to many "collector" (as opposed to "investment") coins with prices disproportionately inflated versus the relative merits.  This even though the US coins most US collectors actually buy have either been stagnant or losing value. 

As for coins elsewhere, it depends upon the coin.  A noticeable proportion are certainly artificially inflated from the loosest credit conditions ever but the ones most at risk are those whose actual collectible merits are disproportionately out of line with the price.

By this comment, I am primarily referring to TPG graded coins in the highest grades selling at inflated prices versus slightly inferior coins whose primary "distinction" is the label on the holder.  These coins aren't remotely "cheap", no matter how much value has been lost from the peak.

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jwither
2 hours ago, Pierre_Henri said:

Numismatics is a hobby like weekend fishing or golf.

If Numismatics is a bubble, then so is watching TV or bowling or keeping birds in an aviary.

Sure, for those who disproportionately spend nominal sums or are actually more interested in their collecting than making money, yes.

Otherwise, that's not how hardly anyone who spends any "noticeable" amount of money treats it.  It certainly hasn't ever been evident on this forum and it isn't evident for anything other than a low minority on the PCGS Forum or NGC Message Boards either.

In a recent set of post on the NGC Message Boards, I stated what I consider to be the obvious fact that buyer (notice I didn't say collector) affinity for most coins bought by the typical profile of the forum contributor on NGC or PCGS isn't remotely what most probably believe.  This is also equally true for this forum or else most participants wouldn't have disappeared.

As I stated in this topic, the affinity of the buyer for what they collect is predominantly a function of two things:

One:  Their general attitude toward collecting.

Two:  The relative numismatic merits (from the coin's attributes) of what the collector buys versus what they paid, the price level and the price structure of what they collect.

For US collectors who are buying the coins typical of the NGC and PCGS forum contributor, there is no reason to believe that these buyers do or will have a strong affinity for what they collect if and when it loses "noticeable" value.  This should be obvious given how (incredibly) common most of their coins actually are or how easy it is to buy it.

Ignoring US contrived definitions of "scarcity", the coins most US collectors buy can be bought either on demand or on short notice even in "high quality"; as in days, weeks or at most a few months.  The series they collect can disproportionately also be completed in days, weeks or at most a few months.

Some of the series are so common that the only actual obstacle to completing it even in one day (literally) in "high quality" (as in the quality most collectors traditionally accepted prior to the invention of contrived standards under TPG) is that there isn't enough time in the day to perform the necessary due diligence; the internet searches and phone calls to the dealer.  The coins are out there on eBay or dealer inventory most or all of the time.

Even with coins that actually somewhat scarce, the internet has made most easy or much easier to buy.  By this, I also refer to most coins with a few hundred examples known, excluding numismatic minutia reflected in specialization mostly due to lower prices.  These coins are almost always available, just not to the exacting (and mostly arbitrary) quality standards that US collectors demand now.

For non-US coins, a noticeable proportion are much harder to buy because it is much scarcer but mostly due to the much lower prices.

In South Africa, I can see that of the two factors I listed, the merits of the coins are generally more favorable than US coins but this is outweighed by the much lower level of interest in actual collecting.

As for myself, that's why I don't buy either anymore.  I haven't collected any US coins since resuming the hobby in 1998.  I stopped collecting South African coinage almost entirely for precisely the reason I am giving here.  I wasn't going to keep most of the coins I used to own and equally wasn't about to add to my collection at the prior exorbitantly inflated price level.

The difference is that I knew this in advance while most reading my comments here aren't even aware of what I am talking about until I just stated it.

Edited by jwither

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Pierre_Henri
15 hours ago, jwither said:

For non-US coins, a noticeable proportion are much harder to buy because it is much scarcer but mostly due to the much lower prices.

Sometimes I really cannot follow your logic

So non-Us coins, (like South African coins?) are much harder to buy due to much lower prices?

So if prices go up, it will be easier to buy them?

Huh?

Wouldn't it be easier to buy them if prices go down?

Or are you saying that less are available on the market because sellers do not want to sell at lower prices?

If so, sellers can ask what they want - they are usually not forced to sell their coins at any price.

Pierre

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jwither
52 minutes ago, Pierre_Henri said:

Sometimes I really cannot follow your logic

So non-Us coins, (like South African coins?) are much harder to buy due to much lower prices?

So if prices go up, it will be easier to buy them?

Huh?

Wouldn't it be easier to buy them if prices go down?

Or are you saying that less are available on the market because sellers do not want to sell at lower prices?

If so, sellers can ask what they want - they are usually not forced to sell their coins at any price.

Pierre

It is the wording in your post highlighted in bold.

In whatever quantity the coins exist, it is almost always harder to buy a coin if the price is lower.  Higher prices invariably bring out the available supply and lower prices constrict it.  It probably isn't that evident with ZAR because most of the coins are quite common but it is for Union.  It's even somewhat true of the pillar coinage I collect which is quite a bit scarcer than both.

But no, sellers can never ask what they want regardless of the current market.  The reason this won't happen is because collector affinity isn't remotely as strong as you imply.  Overwhelmingly, a substantial price increase (a subjective definition I admit) will cause many or most to sell because their affinity for collecting or what they collect isn't that strong.

This is the point of my prior post.  Leading up to the bubble peak and maybe one year later, comments here certainly implied that owners (notice I didn't say collectors) had a much higher affinity for what they had bought (at substantially if not mostly at inflated prices) than they actually did, as proven in spades when prices fell.

In South Africa, it was due to a disproportionate proportion of financial buyers who obviously either have no affinity or a very weak affinity for collecting.  In the US, it's because the relative prices of so many coins are (completely) disproportionate to any sensible evaluation of the coin's relative numismatic merits.

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Cold Sea

I understand the sellers to determine the low end of the price and the buyers the high end. If there is a demand for anything, the price will rise up to a point that the buyers are prepared to pay. If demand decreases, the price will drop to a point that the sellers determine. If prices are at the sellers' low and you are willing to pay premium, then there will always be a seller.

Edited by Cold Sea

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EWAAN Galleries
27 minutes ago, Cold Sea said:

I understand the sellers to determine the low end of the price and the buyers the high end. If there is a demand for anything, the price will rise up to a point that the buyers are prepared to pay. If demand decreases, the price will drop to a point that the sellers determine. If prices are at the sellers' low and you are willing to pay premium, then there will always be a seller.

Exactly. Any coin is only worth what the buyer will pay...just like any commodity or asset for that matter. Look at the property Market In SA. So many banked their monies into land and it will most probably be taken away by the government 

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Coin Database
57 minutes ago, EWAAN Galleries said:

Exactly. Any coin is only worth what the buyer will pay...just like any commodity or asset for that matter. Look at the property Market In SA. So many banked their monies into land and it will most probably be taken away by the government 

I cannot confirm this as of yet, but there are also talks of a recall by Government on gold, which will include gold coins such as Krugerrands and all other numismatical items of gold. This may soon, before the end of this year, end up in Parliament for discussion, which means that anyone still in possession may need to hand them back to the Government. Not sure how or if International buyers will be affected, and if so, how they plan to get this back from them.

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EWAAN Galleries
38 minutes ago, Coin Database said:

I cannot confirm this as of yet, but there are also talks of a recall by Government on gold, which will include gold coins such as Krugerrands and all other numismatical items of gold. This may soon, before the end of this year, end up in Parliament for discussion, which means that anyone still in possession may need to hand them back to the Government. Not sure how or if International buyers will be affected, and if so, how they plan to get this back from them.

Why would they recall gold and numismatics? Where do you get this info from??? And your name? As first time I’m replying you....

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jwither
38 minutes ago, Coin Database said:

I cannot confirm this as of yet, but there are also talks of a recall by Government on gold, which will include gold coins such as Krugerrands and all other numismatical items of gold. This may soon, before the end of this year, end up in Parliament for discussion, which means that anyone still in possession may need to hand them back to the Government. Not sure how or if International buyers will be affected, and if so, how they plan to get this back from them.

Which international buyers are you referring to?  Is it foreigners such as myself buying KR and SA gold coins?

If this is what you mean, no one outside of South Africa will pay any attention to any law paased by the Parliament in your country.  They will tell them to "take a hike" and "stuff it".

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EWAAN Galleries
Just now, jwither said:

Which international buyers are you referring to?  Is it foreigners such as myself buying KR and SA gold coins?

If this is what you mean, no one outside of South Africa will pay any attention to any law paased by the Parliament in your country.  They will tell them to "take a hike" and "stuff it".

Agreed 

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Coin Database
9 minutes ago, EWAAN Galleries said:

Why would they recall gold and numismatics? Where do you get this info from??? And your name? As first time I’m replying you....

Not all Numismatics, but apparently gold coins, which include Veldponde, Krugerrands, Krugerponde, etc. 

I heard this from someone working in Government. It is being discussed currently. But, all information given to me is vague at this point in time and cannot be confirmed as yet.

 

9 minutes ago, jwither said:

Which international buyers are you referring to?  Is it foreigners such as myself buying KR and SA gold coins?

If this is what you mean, no one outside of South Africa will pay any attention to any law paased by the Parliament in your country.  They will tell them to "take a hike" and "stuff it".

Yes, I am referring to International buyers. There are already laws in place which could see government seize all gold in South Africa, including Krugerrands held by places like the Mint and banks on behalf of clients, if the need ever arises. My question, if this eventually happens, what about foreign buyers? How will they be affected?

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1 minute ago, Coin Database said:

Not all Numismatics, but apparently gold coins, which include Veldponde, Krugerrands, Krugerponde, etc. 

I heard this from someone working in Government. It is being discussed currently. But, all information given to me is vague at this point in time and cannot be confirmed as yet.

 

Yes, I am referring to International buyers. There are already laws in place which could see government seize all gold in South Africa, including Krugerrands held by places like the Mint and banks on behalf of clients, if the need ever arises. My question, if this eventually happens, what about foreign buyers? How will they be affected?

Recall for what reason? 

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jwither
2 hours ago, Cold Sea said:

I understand the sellers to determine the low end of the price and the buyers the high end. If there is a demand for anything, the price will rise up to a point that the buyers are prepared to pay. If demand decreases, the price will drop to a point that the sellers determine. If prices are at the sellers' low and you are willing to pay premium, then there will always be a seller.

Yes, you are literally correct and I would call this self evident.  However, this isn't what I was getting at.

To further clarify, when  a buyer decides how much to pay, it's a function of how much they believe they can sell the coin for later (the financial aspect) and the two considerations I listed which drive their affinity for collecting.

Obviously, if buyers believe they will be able to sell for a profit (which is the primary if not exclusive motive for all financial buyers), they will bid up the price to the extent where they subjectively determine they can still profit from a sale later.

But like I told everyone here before many times, ultimately only collectors derive utility from collecting, not anyone else.  As long as the financial asset induced credit mania exists, since many coin buyers also buy gold and silver and since dealers function as market makers, there is or is likely to be a substantial financial component to coin buying.

However, when financial buying disproportionately is more important than real collecting as it was in your country and as it is in the USA versus practically everywhere else, this is when prices are the most susceptible to a sustained price decline or collapse.

As for the comments I have highlighted in bold, this statement is clearly not true in all instances. 

First, many coins (including some in South Africa) are so hard to buy that only "stupid money" prices may compel the seller to part with it.  What this "stupid money price" is isn't even known to the buyer since this type of coin doesn't even have anything resembling an established price.  As an example, how much would it take to buy the 1931 3d, 1/-,  2/- and 2/6 in (near) MS?  Sure the buyers can negotiate a price but they have no baseline from which to negotiate.  "Collectors" in your country also have a hugely inflated opinion of the merits and price potential of practically every "rare" or actually rare coin which makes any kind of agreement in the current weak market unlikely

Second, in many instances, a prospective buyer cannot confirm the coin they want even exists and has no idea who the owner is if it does.  They can attempt to find these coins and these collectors through a dealer who has the best contacts but this may or may not be successful.  What I describe, this is the reality for the pillar coinage I collect and it isn't unusual.

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Coin Database
12 minutes ago, EWAAN Galleries said:

Recall for what reason? 

Really can't say. Do not even know if this will ever go through. But, I was just wondering about some effects of such move should it materialize. I bought a couple of smaller Krugerrands through FNB and it is being held by the Mint. I may need to consider having them send it to me now.

Edited by Coin Database

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EWAAN Galleries
4 minutes ago, Coin Database said:

Really can't say. Do not even know if this will ever go through. But, I was just wondering about some effects of such move should it materialize. I bought a couple of smaller Krugerrands through FNB and it is being held by the Mint. I may need to consider having them send it to me now.

If you buy Krugerrands thru FNB the SA mint does not hold them so I think you seem a bit confused...

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Coin Database
11 minutes ago, EWAAN Galleries said:

If you buy Krugerrands thru FNB the SA mint does not hold them so I think you seem a bit confused...

Yep, I am sorry about that, you are correct. Rand Refinery safeguards the Krugerrands until such time you want to sell or take possession of it. Will still need to get them into my possession though.

Edited by Coin Database

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jwither
4 hours ago, Coin Database said:

Really can't say. Do not even know if this will ever go through. But, I was just wondering about some effects of such move should it materialize. I bought a couple of smaller Krugerrands through FNB and it is being held by the Mint. I may need to consider having them send it to me now.

I don't know anything about the laws in South Africa but have two points to make.

First, there is virtually no chance your government would attempt such a move except out of desperation.  Even in countries in an economic depression such as Venezuela now and Argentina recently, it didn't happen.  Now granted, neither are gold producers but if South Africa wanted to do that, it would be easier to just nationalize the mines.

To my knowledge, South Africa typically if not usually runs a balance of trade deficit and one in the current account.  If this is correct, to initiate this action would send a very negative signal to the outside world which may result in capital flight and make it much harder to attract external investment.  I'm not aware the South African government has any current motive to do that and it's contrary to common sense.

Second, what is your definition of a foreign buyer?

If a foreigner is a non-citizen living in South Africa, it depends upon the statute which is what I presume you were asking. 

My suspicion is that to the extent this applies, it would only apply in practice for immaterial amounts.  This is based upon the assumption that practically anyone of noticeable financial means in your country has at least some  of their financial assets located elsewhere.  Many have one foot out the door, figuratively speaking.

To conclude, my guess (and that's all it is) is that such a statute probably exists but it isn't about to be activated.  In the USA, I presume the  President could issue another executive order, just as FDR did in 1933.

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EWAAN Galleries
On 6/29/2018 at 6:53 PM, Pierre_Henri said:

Numismatics is a hobby like weekend fishing or golf.

If Numismatics is a bubble, then so is watching TV or bowling or keeping birds in an aviary.

I think I'm finally agreeing with you now...Many Thanks :)

Fishing and Golf costs a lot of money weekly....all the expenses weekly...golf clubs, balls, club fees, fishing bait, petrol, etc etc.....

Watching TV, bowling and keeping birds in an aviary also costs some money.

So yes I get it coin collecting is not an investment in anyway whatsoever...it will just keep costing one money with no returns on their monies just like you gave examples above... You couldn't have said it any better :)

 

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Pierre_Henri

Glad you are happy - now go and buy more bitcoins

 

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EWAAN Galleries
30 minutes ago, Pierre_Henri said:

Glad you are happy - now go and buy more bitcoins

 

Are you saying I'm not allowed to spend monies On numismatic? Also are you the Only one allowed to mention Bitcoin on this topic? Cos if I had to bring it up on this thread you would have gone ballistic...

Your posts seems very negative....who says I'm not allowed to invest in Kruger or rare coins... You are not God... You just a human and definitely not in control of this forum which is for all of us :)

We both have been banned already got a week... Wanna go down that road again?

 

Edited by EWAAN Galleries

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GROOVIE COINS

Good evening.

I would like to add to the comment of government seizing gold coins such a krugerrands or numismatic coins such as veld ponde etc. Though government has not hinted at confescation of precious metals and it is not "likely" or conceivable in today's age of unbacked fiat currency, another way this could become a reality is in the form of property expropration without compensation. Yes this has been the topic at the heart of South African politics over the last few months, or ever since the ANC government lost three major metros, Pretoria, Johannesburg and Port Elizabeth. It is none other that a smoke a mirrors beating of the drums to rally in response to loss of support. The common wording being thrown arround is land expropriation without compensation, but the truth is if ever a bill gets proposed to parliament, it will be worded as a "property expropriation without compensation" bill that gets passed. This was the view of a pominant politcal analysist that made it quite clear that property in this sense does not only apply to land, but to anything of ownership by a person, whether a house, car or even business or investments. This is the evil of this expropriation debate, as now everybody is talking about land, but the door is open to any and all possibilities. Not all expropration will take place on a open to wide scrutiny and on a public platform, and on a national scale. Such a bill opens the door to expropriation by any corrupt official of any property on a small town, village or municipal scale. This is where your krugerrands or veld ponde are at risk of confiscation. 

regards Robert

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EWAAN Galleries

I’m glad it’s an open forum with no dictatorship and I can now mention Bitcoin here on this thread :)

 

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