Is rapidly rising inflation causing rare coins to rise in value, or is it something else ?

mellado

The rapid rise in higher grade rare coin values
and other collectibles ( comics, baseball, etc)
may be tied to inflationary pressures...but I don’t think so. Inflation of car values, meat, gas, virtually every consumable product has nothing to do w rare coin or collectible values
and is only a very recent phenomenon.

I attribute numismatic price increases to “old age”. Yes, the great majority of higher income collectors pursuing high grade coins are in their 60’s and higher & feel time closing in on them. If they don’t acquire, in desperation, the coins or medals they want / need now, there might not be another chance. I know. I’m 78, still healthy, but I know I’m bidding & paying much higher prices than I should , feeling this may be my last chance. I do wonder what will become of this new high price structure when the current older collector generation passes away?.

Realone

I don't like using the term inflation anymore as a gauge because of the changing definition of inflation by our gov't.
However with salaries rising especially for the new monied techies and real estate investors and stock investors and real estate speculators/flippers as well as asset valuations rising in a number of markets such as real estate, luxury/sport cars, art, bitcoin even gold and silver and collectibles of which coins are part of, I think it makes sense that coins rise too. Whether it is an older collector or a new monied newby it s mainly the chicken and egg story. The enormous gains being made in salaries and/or investments either way will force the assets that they are investing and selling to rise, and coins are now one of them it seems.

BillJones

In one sense people have been stuck at home and had Internet buying as one of their outlets. That has pushed up prices.

One the other side, the lack of shows has limited dealer buying and restocking opportunities. I think that the Summer and Winter FUN Shows were a reflection of that.

I'm old and I've been buying quite a bit of late. It's not because I feel like "I am getting ready to buy the farm." It's just that I have an active mind and a lot of projects going on at once with respect to collectables, which include Roman, British and American coins plus political items.

Pyrite

Coins are a thin enough market for moving with any extra sales.

Pyrite

BillJones said:

In one sense people have been stuck at home and had Internet buying as one of their outlets. That has pushed up prices.

One the other side, the lack of shows has limited dealer buying and restocking opportunities. I think that the Summer and Winter FUN Shows were a reflection of that.

I'm old and I've been buying quite a bit of late. It's not because I feel like "I am getting ready to buy the farm." It's just that I have an active mind and a lot of projects going on at once with respect to collectables, which include Roman, British and American coins plus political items.

That doggone historic interest never dies, does it?

oreville

I used to buy black NGC slabs for $20 premium each back in the late 1980's raising my prices a ;bit each year throughout the 1990's a and 2000's and now I have to pay over $7,000 each for stickerable ones. . inflation has nevrer stopped, just calmed down a bit, between 1987 and 2022 but now it has accelerated in the last two years.

We have not really seen the worst iof the price increases. Will it continue? Probably yes.

Coin collecting has suffered over the past 20 years as there was so much competition from other activities but with the other activities getting shut down the stay-at-home coin collecting hobby has come roaring back for now.

Will it continue? To a lesser extend but it will continue as the younger crowd learn to like the stay-at-home hobbies.

MarkFeld

mellado said:

The rapid rise in higher grade rare coin values
and other collectibles ( comics, baseball, etc)
may be tied to inflationary pressures...but I don’t think so. Inflation of car values, meat, gas, virtually every consumable product has nothing to do w rare coin or collectible values
and is only a very recent phenomenon.

I attribute numismatic price increases to “old age”. Yes, the great majority of higher income collectors pursuing high grade coins are in their 60’s and higher & feel time closing in on them. If they don’t acquire, in desperation, the coins or medals they want / need now, there might not be another chance. I know. I’m 78, still healthy, but I know I’m bidding & paying much higher prices than I should , feeling this may be my last chance. I do wonder what will become of this new high price structure when the current older collector generation passes away?.

If the price increases in rare coins are due to "old age", why was the market so lackluster for years, prior to COVID? There were plenty of old collectors around back then, too. The increase isn't just in higher grade rare coins, either. There's lots of money sloshing around and rare coins, as well as other collectibles, have benefited greatly from that.

john

I do not reconcile any price "increases" in the present coin market environment to be attributable to inflation.

Asset seeking is asset seeking.

oreville

When the Mary Tyler Moore show aired on TV years ago, the opening introduction was very illustrative on how inflation affected consumers in a very obvious way. The scene showed Mary Tyler Moore at a supermarket and picking up a package of meat and looked horrified at the price. She then threw the package into her cart feeling helpless. That personified inflation better than any one else.

But the coin collecting hobby has benefited from a return to the stay-at-home activity as well as a return to collecting items with intrinsic value. . To test that theory has currency and stamp collecting also benefited to a lesser extent as currency and stamps has minimal intrinsic value?

Yet the black NGCslab set I have put together also has lesser intrinsic value. Yet the pricing has zoomed upward steadily over the past 30 plus years. A classic case of supply vs demand.

The collectors seeking these slabs range in age from their 30's 40's 50's and 60's. They are not all old. I only happened to be the first as I loved the look of big gold coins against the black background of the NGC 1.0 slab which the Capital holders started first.

john

1970 @ 5.70-6.25.
1/22 6.8-7.4 (nobody really knows)
That is not sky is falling numbers.

Reference the philatelic market, I will take the offered test of comparison, and vote yes.

Currency? Meh.. don't really follow except Obsoletes and Colonial, and in that area I would again vote yes.

totallyoriginal

If you have not listened to the Jay Martin Show interview with Lynette Zang last week, you may find it interesting to hear some of the points about rare coins that Lynette talked about.

Legend

Shocking news: people stuck at home during covid. They look around to spend their stock market gains: OMG Coins are a supply and demand thing!

TheCoinHound

I would argue that inflation, transitory or not, is just one aspect of a bigger trend. Namely, an increasingly widespread disillusionment with our government and with money itself. Those trends have been in place since the early 70’s, at least, but have greatly accelerated in the past 5 years. Trump, the Fed, COVID and Crypto played big parts in that. I don’t want to turn this into a political thread, but the fact is that our world does seem to be veering into dangerous and uncharted waters. So why coins? We like them, we trust them, and they will be exactly the same when we emerge from these crazy times.

Catbert

Don't forget that baby boomers are retiring at the rate of 10,000 per day!

oreville

Legend said:

Shocking news: people stuck at home during covid. They look around to spend their stock market gains: OMG Coins are a supply and demand thing!

We are in complete agreement.

WilliamJ

At my local coin shop I see some  younger collectors. They are searching and eager to learn. A few teenagers, but most in the 20 to 35 year age plus???   
   Reminds me of myself, not much money to spare, but a few coins to invest, so I try to motivate them just like a few old timers helped me.
  

ms71

There is a deluge of money (including crypto) in the economy, and it's looking for havens. Coins are just a small piece of that, but the "best" material in the coin market is very attractive as a store of value; particularly to those who are drawn by the "collecting" (as opposed to just "gathering/stacking") aspect. Not just the classic 6-figures-and-up items, but everything with obvious, unquestionable quality that has stood the test of time.

BillJones

Talking to some dealers, who are following the auctions, I think we are seeing the "bi-furcated market” again (from 40 years ago, and from the late 1980s) where there are investors and speculators who are paying very high prices for the best material. Then there are the collectors who keep chugging along with nice, but not super material, like I am.

The warning I give to the investors and speculators is the same I gave to them years ago. The collector is the ultimate consumer. When you get way past the collector demand with the prices you pay, you are on dangerous ground financially. After awhile if you just bidding things up against each other simply became you are looking for the “bigger fool,” who will pay more, the correction will come, and it will be severe. Just because prices are going up does not mean that they can’t come down.

oreville

I have to give Laura of Legend Numismatics credit for "coining" the term "great" coins/collection vs "nice" coins/collection.

There is a difference between the two. Nothing wrong with "nice" but not on the same level as "great."

pcgscacgold

How much of the run in prices has occurred because of the record amount of inheritance money being passed down?  I never hear much about that on the forums. For many collectors that money is making it possible to purchase coins they only dreamed about owning. It’s not all crypto money or stock market money. 

TheCoinHound

oreville said:

I have to give Laura of Legend Numismatics credit for "coining" the term "great" coins/collection vs "nice" coins/collection. There is a difference between the two. Nothing wrong with "nice" but not on the same level as "great."

Agreed. Laura has a way with words.