Do central banks trust each other?
That was the question asked yesterday when the news broke that Germany will reduce its gold holdings at the New York Federal Reserve and eliminate it completely at the Banque de France.
For a coin collector like me, such questions border on the philosophical. The question can be endlessly discussed, but what practical impact does it have on the day-to-day lives of the nation’s collectors and dealers?
Trust is an important concept in numismatics.
The business could not function without it.
Yet there is a noticeable dearth of it among some people when it comes to dealers.
I had several emails yesterday from a sender who wanted to know the best way to find out the value of coins.
He told me nothing of himself, nor what coins or other items he wanted to know the value of.
So he obviously did not trust me well enough to provide me with basic information.
I sent a short email response that estate lawyers pay coin dealers for appraisals.
He replied a little while later that he did not trust the dealers in his city. Could I name one?
I told him it was against company policy to prefer one of our advertisers over another, but I also told him that to make a determination of who should do an appraisal, a dealer should be given some idea of what he would be asked to appraise.
The sender or somebody he knows obviously has some numismatic items and is looking to learn their value.
At some point, that somebody is going to have to trust somebody else to provide guidance.
Who will that be?
Will he get full value for whatever it is he has?
That’s a question of much greater importance to me and to my readers than whether the Bundesbank is becoming leery of trusting other central banks.
More people have lost more money on their coin holdings by leaving them to uninformed heirs than from any jiggle in bullion prices caused by the more lofty questions of international finance.