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
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?