Aug 9, 2010 | commentary, grading
Dominion Grading Service is now closed. After David Lawrence Rare Coins purchased the remnants of PCI from a bankruptcy auction, relocated the service to Virginia Beach, and began to accept grading submissions in May 2008. DGS offered two new services to collectors: AuthtiVIEW, a free imaging service for coins valued over $100; and the Visual Population Report. Both services made use of technology to bring new services to their customers.
But this was not enough. Over the last two years, DGS has stagnated. There have been no new services, no new innovations, and nothing to excite their potential customers. At shows, while DLRC’s booth is a bit sedate compared to other auction companies, DLRC did little to improve and promote DGS. DGS acknowledge their stagnation noting that “both PCGS and NGC have made great strides and improvements to their grading technologies and practices and we no longer feel that our services are needed.”
In a previous post, I discussed that the long term health and existence of other grading services matter. It is important for other grading services to exist because competition is good. Competition makes every service better. Competition forces grading services to innovate to try to distinguish themselves from the others in their field. This is good for the consumer who will get a better value for their fees.
There was a lot DGS could have done to distinguish themselves from the other services with only expenses in technology. Yes, I know the economy is not doing well. I also know that most MBA programs teach that building the infrastructure will pay dividends in the future. It takes a little imagination and marketing to break through the crowd and distinguish themselves from other serves. John Feigenbaum, president of DLRC and DGS whose biography says that he earned a Bachelor of Science degree in Marketing Management from Virginia Tech (not a slouch school!), should have known better rather than let the service stagnate until it withered away almost unnoticed.
Jun 24, 2010 | ANA, commentary, shows
American Numismatic Association Executive Director Larry Shepherd was interviewed by David Lisot for CoinTelevision.com about the ANA’s decision to base its summer World’s Fair of Money in Chicago.
Shepherd opens his remarks saying that “[this] is not a knee jerk reaction as some publications made it out to be.” He reiterated that this was a well thought process. The problem seems that each one of his arguments have answers that could be addressed with another perspective. Here are counters to two of his main points.
One of the factors Shepherd cites as a reason for Chicago being a good place for a coin show is the lack of other major coin shows in the area. It is interesting that the ANA did not consider the Chicago International Coin Fair (CICF) and Chicago Paper Money Expo (CPMX) major shows. CICF and CPMX have been held in the Rosemont area for a while and is now owned by Krause Publications, founded by Board of Governors member Chet Krause and where President Cliff Mishler was once CEO. In addition to CICF and CPMX, the Mid America Coin Expo was moved the Schaumburg in 2008 and starting next year, the Central States Numismatic Society moved their annual show to Rosemont for 2011 and Schaumburg for the succeeding five years.
Even if you discount the CSNS show because of timing, that is three major shows already in Chicago. Although Shepherd can argue that the World’s Fair of Money is a bigger show, it is probably the biggest coin show in North America, if not the world. So why not share the wealth with other cities?
The other issue that Shepherd brought up is that he said that (paraphrasing) an organization cannot call up a city and say you are bringing the world’s largest coin show to their city in a few years—tell the mayor. After consulting with someone in another industry confirmed what Shepherd said that cities are looking for a financial commitment. They want the organization to guarantee floor space (and associated rent) in the convention center and hotel usage that will represent the potential income from the various taxes governments charge.
Shepherd mentions that meeting the guarantees is becoming difficult because of online travel sites that undercut the prices agreed upon in the contract to use the city facilities. If the organization does not sell the minimum guaranteed rooms, the organization must make up the tax losses to the city. What Shepherd does not tell you is that an organization can negotiate this with the city. What he does say is that this is that this is not an issue in Chicago… except that the location is not in Chicago. The proposed location is in Rosemont, just east of Chicago O’Hare International Airport and 17 miles northwest of downtown Chicago. It is also a limited access area with a limited number of hotels nearby making guarantees unnecessary since most people going to the show will stay in a nearby hotel.
Rather than trying to negotiate with municipalities to host a show that does millions of dollars of business in addition to a multi-million dollar rare coin auction, Shepherd recommended this enclave outside of Chicago near the second busiest airport in the United States surrounded by suburbs and not exactly a tourist destination.
In the past, Shepherd discussed the scheduling and handling of the ANA shows so as to not lose money. One consideration was to find what he described as “a good bourse city” primarily to make the dealers happy. What he never mentioned is what would make the ANA collectors happy. Rather, Shepherd is saying that it is not enough to use what is probably the world’s largest numismatic show as the destination in different cities as outreach to its members and future members, the ANA, a non-profit organization, is using the show to make a profit and enforce profits for its dealers. I am for dealers making profits, but I am against this profit motive as a driving factor for the placement of the ANA convention.
The Chicagoland area is a wonderful place and Chicago is a great city. But to be the only area that the ANA uses for its premier convention is an insult to cities all over the country capable of hosting a successful show and an indictment on Shepherd’s inability to think creatively.
Jun 21, 2010 | commentary, ethics, shows
There are a people in the numismatic industry I like, but there are some I watch with amusement for various reasons. One of those I watch with a certain amount of amusement is Laura Sperber of Legend Numismatics from Lincroft, New Jersey. Sperber and Legend deals with a higher end segment of the market where their “lower-end” products cost more than $1,000.
There is nothing wrong with the high-end market, but most of the people I have associated with in numismatics that are not dealers look at $1,000 as being out of our budget. We are happy finding nice coins and putting together fun sets that may not be the type of coins that Legend and similar companies would sell.
While I respect Sperber for her views on the market, she acts and writes like it the view of everyone who participates in the market. Thus is the case with her Market Report regarding the recently ended Whitman Baltimore Coin and Currency Expo.
Sperber opens her tome noting that the show was “decent but quiet.” As with many June shows in Baltimore, it is not as active as the March or November shows and Sperber notes that the timing and the location works against this show. This is a fair comment and something the people at Whitman needs to consider in the future.
What is not fair is that her views are caveated at the beginning saying that the dealers she spoke with “on our level” was a few paragraphs before a section titled “When Dreck Rules.” On one hand she is saying that, “we know of a few smaller dealers who had nice coins and did VERY well.” Then a few paragraphs down she noted that, “[there] were few fresh and nice coins in anyones display case.” Which is it? Were there dealers with nice coins or where there few nice coins? It cannot be both.
Sperber also forgets that there are more aspects of the market than this “on [her] level.” Some of us are on a budget whose budget may not include paying thousands of dollars for coins. But we like to look and even learn so that maybe if that coin ever becomes affordable we can consider a purchase. She disparages some who she said were not serious buyers who “came to kick some tires and chat.” Using this logic, we are not to go to a high-end dealer to look, ask questions, and learn. Maybe, people did not like the quality of your coins; after all, you said that there were not enough “fresh and nice coins in anyones [sic] display case”
But according to Sperber, “we need cool and better CAC stickered coins” as if CAC stickered coins are the answer to her problems. It is hard to say whether CAC coins are the answer, but the concept of a coin having eye appeal and being entombed in a plastic slab stickered by someone else does not give the coin good eye appeal. In fact, a high grade coin, with our without the sticker, can be quite ugly. As someone who is not a fan of toned coins, I find many toned coins unattractive, yet I have seen a few with a CAC sticker that I would never buy even if offered as a raw coin.
What Sperber does not tell you is that she and/or Legend Numismatics have a stake in the CAC. That lack of disclosure in her promoting of the CAC is disingenuous, at best. In the future, Sperber should caveat discussion she is involved with about the CAC noting her association.
I understand that the good people at Legend Numismatics have to make a living, but it is time for Laura Sperber to show some respect for the entire numismatic community and not just those who can afford what her company sells. Sperber has demonstrated an interesting perspective on the market that could be respected if she does not come off as a Jersey-tuff person as she has done on other occasions. Even this Brooklyn-born blogger is turned off by that Jersey-tuff attitude. She must start to learn that there is room for everyone in the numismatics market including the tire kickers, looky loos, low-end buyers, and those of us having fun. Until then, if I should be looking for a coin of that caliber I will probably not purchase it from Laura Sperber or Legend Numismatics.
Mar 12, 2010 | commentary, legal, scams
Over the last few months I have been receiving invites to join Numis Network. Numis Network is a multi-level marketing (MLM) program whose primary purpose seems to have people recruit a network of other interested people and have them join the network. There is a fee to join and a commission that is paid up the organization chart as new members join.
Multi-level marketing goes under many names: network marketing, direct selling, referral marketing, and pyramid selling. Regardless of the name, it is a marketing scheme where the structure creates a marketing and sales force through the use of compensating promoters for selling products but creating additional distributors. The multiple levels creates a type of pyramid where those closer to the top of the pyramid makes the most money. Numis Network exhibits all of the characteristics of an MLM scheme. It emphasizes the network, growing the network, and receiving commission from the network.
It is important to note that a MLM scheme is not the same as a Ponzi scheme (which is what Bernie Madoff did) since there is supposed to be real marketing behind the network. In the case of Numis Network, they try to keep this scheme on this side of legal by touting their compensation is derived from the sales of certified coins. Numis Network uses a binary plan to grow the network using two subtrees, a power leg, which has new members, and the profit leg, which has your direct recruits. The key is supposed to be that your profit leg provides your best chance to make money. However, I found the following in Wikipedia:
In truth this benefit is slight because the new members who are recruited by your ancestors are shared among all the available leaf nodes. For example, your immediate ancestor in the tree only puts half of his new recruits in your downline, on average. Likewise, his ancestor only puts one fourth of his recruits in your downline. Following this argument to the root of the tree, the total approaches just one person recruiting for your downline (1/2 + 1/4 + 1/8 + 1/16 + 1/32 + … + 1/2n, where n is your tree depth). This is often insignificant in comparison to the number of people required in your downline to make yourself profitable.
If you calculate the amount of compensation per person diminishes as the number of downline people increases. In order to make money, you would need to recruit quite a few people and have them buy and/or sell coins in order for you to make a profit.
The only people making money in a MLM scheme are those at the top of the overall pyramid—the root node. Not only are they making money on the your initial purchases, but they are collecting on the commissions from the new recruits, which they earn a share of every one of them since they are at the root of the scheme. Remember, they are also the ones selling the coins. Once you buy the coins to resell, they have made their profit and it is up to you to sell the coins at a higher profit in order to earn a large enough commission.
Most of the people who have sent an email note asking me to join will probably never see a profit. I hope they can earn back their original investment.
While it is legal to create a pyramid scheme whose compensation is based on a real sales commission, the truth of the matter is that the further you are away from the top of the pyramid, the less money you will make. And think about it, how many coins would you have to sell to make a profit and how many coins could be sold? How many coins will you have to sell in order to break even after spending $500 (for the Fast Track Collector’s Kit) or the $75 (Basic option) plus the $9.95 per month for the Numis Network ecommerce website? Think about how the premiums on bullion coins have lowered as the US Mint has raised the supply then ask yourself if there are enough interested customers out there to even sustain the effort.
Since Numis Network is located in Tampa, Florida you may want to familiarize yourself with the well written advice from Florida Attorney General Bill McCollum. If there are any questions, you may want to contact Attorney General McCollum’s office for assistance.
While Numis Network may technically be legal I question its ethics. It is something I would never be involved with. If someone were to ask me for advice I would suggest that you not involve yourself with this program.
Jan 17, 2010 | administrative, commentary
The Coin Collectors Blog is a labor of love. I love numismatics. I love to collect various numismatic items. I love to write and I love to write about what I do numismatically. Entries on this blog range from my experiences, to news about numismatics, to my opinions. It is one person speaking from one corner of the numismatic world.
In real life, I am an expert in information security which I use to help the federal government keep their systems safe. It is a difficult job but gratifying when the systems I work on are hardened to prevent the issues you might have read about in the newspapers. I have been working professionally with computers for over 30 years and spanned quite a bit of interesting computer history—but that will be the topic of another blog (stay tuned). Numismatics and learning about numismatics is an enjoyable hobby that I used to escape from the bits and bytes of my working life.
Recently, someone came across my July 22, 2008 post Paper v. Coin Dollars where I make the case for the US to cease production of the paper $1 federal reserve note. The reader did not like what I said and posted an anonymous comment that began “The whole dollar coin scheme is a leftist globalist scheme anyway.”
Excuse me? If this commenter thought that post was leftist, I wonder what that person would think of my Reforming America’s Currency series?
The posts I make to this blog are purposely non-political. Everything I write on this blog are either reporting the news or observations. Editorial content has no political slant or agenda. It is what I feel is the best for the hobby and country.
I do not mind if readers disagree with me. In fact, I would love to hear from more people who disagree with me because it provides a different point of view that I can learn from. But please do not accuse me of having a political agenda because my only agenda on this blog is numismatics.
Aug 7, 2009 | ANA, commentary, shows
I am not attending the American Numismatic Association’s World’s Fair of Money® this week. I would like to attend, but the show is in Los Angeles, which is about 2,690 miles from the Washington, DC metropolitan area. Although this is closer than the 2,800 miles I would have had to travel to Portland, Oregon for this year’s National Money Show,™ both were too far to travel—especially in this economic climate.
I know the ANA had to make it up to Portland for moving the 2007 National Money Show to Charlotte. However, by doing this, the ANA has prevented a few people from attending at least one show this year.
Although I would not mind both shows being East Coast affairs, I can understand the need for a national organization to hold its conventions to make it accessible to both coasts, but to hold both on the West Coast reduces accessibility for those of us in the east.
Next year, the National Money Show will be in Fort Worth, Texas and the World’s Fair of Money will be held in Boston. Fort Worth, home of a branch of the Bureau of Engraving and Printing, will be more accessible from the West Coast than Boston. Although not perfect, it is better than if both shows would be on the East Coast.
I hope that in the future the ANA will make every attempt to diversify the location of their shows so that everyone can be included.
Jul 31, 2009 | commentary
We are living in interesting times. The economy has problems and the experts cannot decide whether we are seeing a recovery or experiencing the proverbial dead cat bounce. Politics has gone berserk as the 24-hour news cycle cannot make heads or tails of the events in Washington as they watch the sausage making process of how to deal with 17-percent of the gross domestic product.
Collectors may have thought that we could withdraw into our world of numismatics and ride out this storm. The economy may be bad, but a creative collector can find other ways of enjoying the hobby. But this might now be the case.
From online forums to printed publication, there have been stories of collectors not being treated well by dealers. Stories have ranged from ignoring people at shows to dealers being rude in their own shops.
When I returned to collecting after my first wife died I felt a bit intimidated. I was interested in the hobby but I had forgotten what I had learned many years earlier. After 20 years away I found that the entire hobby changed with the growth of third-party grading. I was overwhelmed! But I found a dealer who was willing to talk with me, answer my questions, and point me in the right direction. I was so grateful that I purchased a starter collection of Peace Dollars from that dealer at a fair price.
Then I moved onto shows. I went to the Baltimore show for the first time and was awe struck by the size. But I was able to walk around the floor and talk to almost anyone about collecting. They were not put off by my questions and I was satisfied with their answers. This continued when I attended by first American Numismatic Association show when a large auction house allowed me to look at a $4 Stella even after I told the dealer that I could not afford the coin.
Over the last year I have noticed a change in the attitude of dealers. I have been ignored at some tables and practically chased away the table of a very well known dealer. I thought these were isolated incidents until I read the stories of people being accused of being tire kickers and wasting dealer’s time.
What is happening to the hobby?
Is the economy affecting dealers so much that in their haste to just make money they are chasing away future customers? Don’t they realize that a tire kicker may eventually be a buyer?
I know there are a lot of good dealers because I make sure I talk with many of them at the Baltimore show. But what about the other dealers? Are these rude dealers giving the hobby a bad name?
I am not against dealers making a living. In fact, I cheer for their success so that I can sit at their tables or visit their shops to ask questions and learn more about the hobby. I want them to be successful so that they can be there to help me find that special coin.
I know that times are difficult and that some online auction sites may be cutting into your business. But if you can hang in there, the economy will improve and business will return. In the mean time, please be nice to that young numismatist who walks up to your table with her father in tow to ask what their folder of circulated State Quarters are worth. It would not hurt to use this as an educational moment and build good will with a future customer.
Jun 26, 2009 | commentary, shows
Earlier this week I read Top 10 “Coin Dealer Ethics” by Susan Headley of About.com. The article is a compilation of the ten most incredible stories she has collected about the less-than-ethical behavior of some coin dealers.
The same day, noted numismatic researcher and author Roger Burdette posted a note on the Collectors’ Society forums that read:
Coin-business people are often the newcomer’s earliest contact with the hobby. That is the best, and often only, chance to create a positive impression of coin collecting. When coin-businesses project an attitude of integrity, honesty, veracity and patience the “newby” is more likely to find the hobby appealing.
With millions of people casually collecting state quarters and other circulating novelties, the typical coin show bourse is still the same-old-same-old. So many dealers exhibit callous, impatient and careless attitudes that I can’t blame new potential collectors when they switch to beanie babies or ceramic insulators.
[I spent about ½ hour at the recent Baltimore show. As I was leaving I saw the perfect turn-off to coin collecting. A teen approached a dealer’s table with a folder of state quarters, and asked what they were worth. The dealer glanced at the cover and said “Junk, Nothin’“ and turned away. The teen walked out, his hopes clearly deflated. Is this how “first contact” is handled in our hobby? ]
As with every story, there are two sides.
Those of us who enjoy this hobby wants to encourage others to join us and have as wonderful experiences as we have. We talk about these wonderful shows with rows of tables with dealers selling almost every type of coin known in the collecting world. When these new collectors find their way to Baltimore for their first show, its size can be intimidating.
On the other hand, the dealer is a business person. Dealers on the bourse floor are trying to earn a living—which may not be easy in these economic times. They earn that living by selling what they think their buyers want. When walking the bourse floor, if all the dealers seem to be selling similar merchandise, it is because the dealers are showing what they think will sell. If you are not interested in what they are selling, someone is and they would rather talk with those who are willing to buy the merchandise. Even though we think of it as a hobby, it is the dealer’s livelihood.
This does not mean that the dealer should take advantage of a novice or non-collector. It also does not mean that a dealer should be rude to the teenager with a 50 State Quarters album. After all, that young person could be a future client or decide to avoid your offering in the future.
We may not be able to send every dealer to charm school, but we can help those new, novice, and non-collectors survive the bourse floor. A thought I had was that local clubs could sponsor “Numismatic Ambassadors.” The Numismatic Ambassador would be available at the shows to answer the questions of the new or novice collector. Ambassadors would be at a table just outside or near the entry as well as walking the floor wearing something to identify them to those looking for help. At American Numismatic Association shows, the host clubs can work with the ANA to supply Numismatic Ambassadors supplemented by other members.
If you are in a club and there is a show in your area, suggest that the club work with the show organizers to provide Numismatic Ambassadors for the show. Convince the show organizers to advertise that the Numismatic Ambassadors will be available to help the inexperienced collector and who is sponsoring the program. This will help the show organizer attract more people. It will also allow the club to meet new people and possibly sign up new members.
What do you think?
Jun 20, 2009 | coins, commentary, fun
While attending the Whitman Baltimore Coin and Currency Show, I was privileged to have a conversation with American Numismatic Association Vice President and Presidential candidate Patti Finner. Finner was in her usual location, the Kids Korner at the show. While talking about various aspects of numismatics, I asked about keeping people interested during that period after being a Young Numismatist and rediscovering the hobby later on.
I understood the problem when I returned to the hobby in my 40s after aspects of my life settled. I was collecting state quarters out of change and placing them in a colorful folder before diving back in. When I returned to numismatics, I continued the traditional collecting as I did when I was younger. I found old folders and albums, updated them to new materials, and started to buy coins from local dealers, online, and coin shows. I was filling albums, buying lots, and selling off the excess so that the proceeds could be used to support my new habit.
Over the last few years I have filled up many albums, purchased some key coins, and created a nice collection of series by date and mint mark. While there was something satisfying about this, I wanted more.
More came in the form of registry sets, bullion silver with different designs, as well as medals and tokens that have meaning to me. I then discovered that collecting this exonumia was not only fun but it was not expensive. But I was having a difficult time figuring out how to make this interesting to an average collector. Then I spoke with Ms. Finner.
Finner’s idea is to create a personal album of coins. Regardless of how you organize the collection, her idea is to document where you received the coin, how much it is worth or you paid for it, when it was acquired, and any other facts about the coin that is important to you. She told me how some were creating databases or writing it on paper and placing it between pages, and a few other ideas.
When I returned home after the show, I opened a three-ring notebook containing paper currency and saw the two 1912 Russian notes that belonged to my late grandfather when his family arrived in the United States from Lithuania. The notes were given to me after my grandfather passed away. While thinking about what Ms. Finner had said, I typed information regarding their provenance: who they belonged to, how I obtained them, and other information about the notes including estimates of their value. The page I created was inserted into the binder behind the note.
I thought this was a great idea that I started to create pages for the notes and other items in that binder. For example, I have ticket stubs from the 1986 National League Championship Series and World Series. I created pages for those items including box scores that I found online. Documenting a collection like this takes it from a series of coins to a personal collection. It adds history and provenance to the collection.
After telling this to a friend, he created his own album. My friend had taken the coin boards that the US Mint has been producing the first three years of the Presidential Dollars and created pages to hold the boards and a sheet of paper where he could document the history of the coins. He used a one-pocket mylar page creating a pocket using a food sealing machine. He created two binders for each of his children and is considering doing the same for the 50 State Quarters.
For those 20- and 30-somethings who are establishing themselves in their careers and with families, this is an opportunity to create a family collection and tell a story that documents the family history with the coins. For those with children, it is also something you can do together.
This can be done using coins, tokens, currency, medals, or anything collectible. Make it a project. Share the project. But the most important thing to remember is to make it fun!
Feb 22, 2009 | commentary, economy, gold
The big news of the week is that the gold spot price spiked over $1,000 this week before profit takers caused the price to back off to a close of $993.20. Gold has been on a steady rise since the week of January 12, when the markets were worried during the last week of the Bush administration with nothing concrete being offered by the incoming Obama administration. Markets continue to be skittish about the economy.
Recently, we have learned that the new openness of the Obama administration has a price. The administration and congress have pulled back the covers of the Emergency Economic Stabilization Act (TARP) revealing that the banks and brokerages were not using the money to open capital markets and were practicing “business as usual.” Recently, we learned that the nation’s two largest banks are not as healthy as initially reported. This is making everyone uneasy about the economy.
With the financial markets in turmoil, investors are running to the gold markets. Gold has been the traditional safe haven for the equity markets. Pundits have been reminding us how gold was used as the standard currency at the beginning of the Great Depression. With the markets failing, foreign trade partners were demanding payment in gold causing much of the United State’s wealth to be shipped overseas. This did not not leave enough gold to back circulating currency causing money to be a scarce resource. As Franklin D. Roosevelt began his presidency, he ordered a 4-day bank holiday and an embargo on the use of gold in overseas transaction. A month later, Roosevelt ordered a nationwide gold recall (Executive Order 6102).
The Gold Reserve Act of 1933 made Executive Order 6102 the law. Gold ownership and the restriction on the use of gold contracts started to ease in 1965 with full ownership granted in 1977. Under 31 U.S.C. §5118, gold contracts with the government are not permitted as well as issuing gold or silver as circulating currency. The United States was officially off the gold standard.
For us collectors, the economy may help keep the coin markets active. But which part of the coin market? Reports from the recent Long Beach Expo noted that there was strong business, especially in with gold coins. It was also pointed out that the auction at the Long Beach show held by Heritage Auction Galleries realized $13 million for a catalog that had a significant number of gold coins. I can understand why the people who manage the Long Beach Expo and Heritage Auction Galleries would want to show the bright side of the weekend, but I suspect that the reports are misleading to the overall state of numismatics.
There were no reports on silver or “common” and less expensive collectibles.
Silver, which is more abundant than gold and has significant industrial uses, is up 25-percent in 2009 while gold is only up 13-percent. It seems to be effecting the industrial market more than the coin market.
While gold may be the investment of choice for those leaving of other equity markets, other coins do not seem to be selling as well. The PCGS3000 Market Summary Index has been falling since last October. Other PCGS indices have moved lower with the exception of the Proof Gold Coin Index, which has remained flat.
Downward pressure on the coin market observed by PCGS can be traced to the news of bad economics event. With the flow of money and seizing of capital markets, buyers have less discretionary funds to purchase coins. As a result, there maybe a higher supply from people wanting to sell in order to convert their coins into spendable currency. The basics of the Law of Supply and Demand dictates that when the supply is high but the demand is low, the downward pressure caused by the lower demand will force the prices down. For those still in the market, the elasticity of demand in the overall market, which takes into consideration lowered incomes, may continue to put downward pressure on prices creating bargains for some formerly higher priced coins.
Since numismatics is an industry that relies on its customers to have discretionary income to purchase its products and since economic indicators say that people now have less discretionary income, I wonder if the positive press from Long Beach may be the result of investors entering the market looking for safe havens. The markets have seen this before in 1980 and in 1990 where the 1980 market was because of manipulation and 1990 increases was because of economic factors.
Before you run out and buy gold or gold-based investments, understand that following the two biggest gold spikes in history, gold had dipped to the lowest levels of the year within a few months months. After reaching $850.00 on January 21, 1980, ($2,178.05 adjusted for inflation), gold dropped to $481.50 on February 18, a 43-percent decline. Following the February 7, 1990 closing price of $423.75 ($684.56 adjust for inflation), gold closed 20-percent lower at $345.85 on June 14, 1980. The PCGS3000 also notes similar drops in their index during the same period.
There are quite a few analysts who are predicting that gold prices could surpass $1,500 and $2,000 per ounce. It is conceivable to think that if gold reaches $2,000 per ounce without market manipulation, we would be in a depression that could eventually make the 1930s look like a picnic in comparison.
Please remember that I am not an investment advisor or analyst. I am collector with a background in public policy trying to read the tea leaves to understand if it is time to sell my gold leaf!
In the mean time, I have cut back on my numismatic purchases. This year, I will be looking to fill the holes in the modern sections of my albums before buying higher priced coins. I will probably not purchase any coins for my registry sets and limit the number of coins I send off to be graded. I might purchase a bulk package of cents to fill up the Whitman coin board I purchased last year.
Are you limiting your collecting activities this year? Let me know by posting your comment here.
Gold chart courtesy of Kitco.com.
Image of The New York Times front page from March 6, 1933 courtesy of Charleston Voice.
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