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Weak Dollar Sends Metals Sales Overseas
By Richard Giedroyc, World Coin News
April 09, 2008

"It's the economy." We've all heard that comment before regarding American politics, but just how is the U.S economy impacting the world coin collecting scene? Ask anyone who attended the January New York International Numismatic Convention and they'll attest to how many of the better coins went overseas due to the weak exchange rate for the U.S. dollar.

Kushan coins of India dating from the second to the fourth century A.D. were auctioned March 16 in Ahmedabad, India, by Todywalla Auctions for as much as 421,000 rupees (about $10,000 U.S.) per lot. The entire Kushan coin collection section of the auction had been estimated at 260,000 rupees. The bidders were all from India, not from abroad.

Coin dealer Joel Anderson, mentioned in the story about coin technology advances, made the recent comment, "With the falling value of the dollar, the replacement costs of many foreign coins are rapidly increasing, so expect to see the prices go up."

Coin dealer Bob Reis (Anything Anywhere, Numismatics, etc. & Dribbles of Discourse) of Raleigh, N.C. said in his March bid or buy list, "This is like 1980, but the underlying causes are different. Massive quantities of gold and silver are being put in the ground all over the world. There is certainly some bubbliness to this situation, but when it pops there will be a lot of bullion out of circulation, so I figure the busted price levels, whenever they arrive, to be considerably higher than we used to be used to," adding, "But the low dollar and the increase in money elsewhere has moved the other sectors too, and that makes for queasy situations when a coin or note is offered for triple or quadruple of what it says in the catalog [Krause Standard Catalog of World Coins] and it sells."

Stephen Album of Santa Rosa, Calif. is a dealer specializing in oriental numismatics. In the commentary on his recent fixed price list No. 232 Album says of the current surge in precious metal prices, "These skyscraping figures have caused us to re-evaluate the pricing of precious metal coins."

Album continues, "However, we must first attempt to determine whether this is yet another 'bubble,' like the Hunt brothers' manipulation of gold and silver in 1979/1980, Morgan dollars in 1989/1990, [and] home prices in the U.S. in 2005/2006. Will precious metals indeed eventually finalize in the current range, or will we see a collapse back to the standard prices of two or three years ago, both about half the current level."

Album says, "My own brief opinions here are that the rapidly rising wealth in India and China has undoubtedly boosted the demand for gold and silver within these huge nations.

"Similarly, the demise in the stock, bond, and real estate markets in Europe and America has encouraged investors to choose precious metals. These two influences are nonetheless very different, the first likely to survive forever, the second likely to disappear once the current proto-recession is surmounted. It is of course unpredictable which of these two factors will emerge as more influential once the Western economies rebound."

Album then concludes, "My gut feeling is that economic growth in the emerging countries, including India and China, will far outweigh the post-recession demand reduction in the West."

Perhaps we in the United States have been spoiled by the lack of competition for the coins we want to collect? Could we be entering a new phase in coin collecting history in which the individual collector in the United States no longer has to worry about the collector next door, but the collector half way around the world that may now be competing for the same coin and may have the resources and be willing to pay more than is the collector in the United States?

You have to admit, it's something to think about.



Weak Dollar Sends Metals Sales Overseas

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