Gasoline here in Iola, Wis., is $3.099 a gallon as this is written, and it has gotten me thinking. In fact, I might even be delighted to pay this price now that I know that an energy company executive bought a great American rarity as announced in last week?s paper.
Do you believe it? Am I crazy? Maybe. Or maybe I am crazy like a fox.
In last week?s issue we carried a story on Page 4 announcing the private-treaty sale sale of the Wolcott specimen of the 1792 copper pattern cent for $660,000. This Judd-2, Pollack-2 pattern is historically important. It is very rare. The price indicates this. Heritage is to be congratulated.
Now what does this have to do with my possibly being delighted to pay such high prices to keep my automobile?s gas tank full? Well, we don?t know who bought the 1792 pattern. All that Heritage President Greg Rohan would say is that it was purchased by ?an East Coast energy company executive.?
Now I realize that such a description could apply to the president of ExxonMobil, or a mid-level executive of a regional electric company, but nevertheless, it got me thinking about the interrelationships we all tend either to take for granted or ignore.
I am sure with today?s prices, it is fun to work for an energy company. I am sure the PowerPoint graphs in their corporate meetings show very nice uptrends. Congratulations and financial rewards are passed out all around.
At least one person is using his wealth to invest in a significant numismatic rarity. Its price is more than 50 percent higher than it was just two years ago.
Plotting this and other price gains on charts is attracting other money into numismatics at all levels. Some people buy the major rarities. Others can afford less, but they are paying higher and higher prices for 1909-S VDB cents or bullion-related American Eagle coins.
I know that my gas money is being recycled at least in part back into numismatics. I know that my livelihood is benefiting from higher gas prices. This comes not just from the indirect investment pitch that says, ?Prices of everything are going up. This is inflation. Inflation is a threat to your financial well being. Gold is an inflation hedge. It can protect you from inflation. It has done so for thousands of years. Coins are considered to be a hedge in a bit of a piggyback inference. Therefore, buy gold and any coins that might strike your fancy.? That is the usual sales pitch.
Now I can see the dots have been connected further for me. I buy gas at a high price. I contribute to higher corporate profits. Those profits get paid in part to executives who in turn bid up the price of coins. I get to write a story about it. It helps sell my papers to readers who are attracted to numismatics because of the rising prices of recent years. These purchases by executives add fuel to that uptrend. Repeat the process over and over.
Clever of me to notice that, right? Well, good try, but I am no more happy about paying more for gasoline than the next guy at the pump, who might be a pizza delivery guy or a farmer whose operating costs are going through the roof.
I understand the economics of it, but abstractions are cold comfort. This is especially true since nobody here is rushing to my desk to tell me I am getting a large raise based on the new higher prices of collector coins.
The higher gasoline prices might lead me to order less pizza, depriving the delivery guy of some income, thereby causing him to reduce his purchases. It pays to remember that there are many more collectors who are average people whose hobby budgets come from taking what is left after paying their mortgage, grocery, gasoline and other bills. Their combined purchasing power is what keeps me here year after year and not just during the boomtimes that generate all the headlines and cause noncollectors to give us our 15 minutes of fame every quarter century or so.
Even with this plausible benefit, I know I am not a fox. I am a human being who reacts the same way you do.
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