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Coin prices are going to fall?


kopeikin
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I sense there is another bout of financial depression around the corner. If this is the case, coin market is going to be hit as hard as all other types of financial securities. I think the coins as an investment are closely following middle to high risk mutual funds. This type of investments is soaring high in time of financial glory and make investors bankrupt in unfavorable investment times. Financial investment experts, please forgive me for being such an amateur. Note that I collect the coins not for profit. I buy them for fun. Nevertheless, what do you think - are our Russian coin collections going soon to be sold for food and fuel or we still are going to enjoy collecting for a while. Any thoughts?

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Well the rare coin market has thus far been pretty impervious to the current mess, but if it deepens that could change.

 

I started collecting Russian Imperial when it was quite inexpensive. I was able, for instance, to pick up a partial proof set (1862 5, 10, 15, 20 kopeks (silver) and a poltina, all in PF62 or 63) for well under a thousand dollars back in 1996. I simply could not have afforded to build the collection I did back then, at today's prices. And in the US it does seem as if it's almost impossible to find decent Russian material anymore.

 

If the prices were to collapse, the current owners of the quality pieces will probably try to hang on to them rather than take a loss, but at some point they may have no choice but to sell if they really end up having to choose between their collections and "food or fuel", and many people who cannot afford this hobby now have another shot at it. It will be a buying opportunity. Either way, the coins will be there still. The stuff I collect has been around already for much longer than I myself will own it, even if I never sell.

 

Of course if we _all_ have to sell to get food or fuel, then of course no one is collecting any more. At that point, our coin collecting issues are far from the worst things we have to deal with.

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Yes - Picasso for some bread. If that happens - who cares if you were putting your money into coins or into 401K. As I heard it on one radio show - in preparation for that - buy guns to protect yourself and your family.

In the short term, I see good Russian material selling above the peak prices of 2008. So go figure.

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If coin prices drop then so will my payments toward my retirement. I'll reinvest in coins as I firmly believe they are here to stay, collecting will never die out. Coins aren't like Beanie Babies.

 

Now if precious metals stay the same or drop, I'll buy it up like crazy if it drops for sure. Stays the same, anything at melt.

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Coins are not liquid enough to sell at the perceived top hoping to "reload" later at lower prices. Bid/ask spread (transaction cost) is also quite wide. One can try to offload some high value coins - but timing is always difficult and - what if you never get a chance to buy them back? :shock: Of course, if precious metal content of your collection is significant, one could hedge it without actually selling your coins.

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Once gold and silver drop back, prices will too. We saw this happen in the 1980 when silver spiked when the Hunt Brothers tried to control the market. Prices fell back when the market settled.

 

Comparing 1980 to today is apples to oranges. Gold/silver are high in price in relative $ terms, but not in relation to the trillions of dollars of debt and inflation/amount of fiat currency being produced in recent years.

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