Many dealers have to borrow money to finance their inventories. It is standard business practice. It has been so to some degree for as long as I have been a collector. Some dealers over the years have made nice profits for themselves lending money to other dealers.
This is not unusual.
What brings the topic to mind this morning is that the most recent issue of Numismatic News had three full-page ads in it offering money-lending service.
What does this signify?
Does it mean the numismatic community has arrived so to speak and is becoming much more attuned to standard business practices? Are we simply catching up to the world of home equity loans, auto loans or home improvement loans?
Could it signify a growing need among hobbyists for cash? That certainly wouldn’t be good. Borrowers paying back loans might not have the money to go on buying coins at the same space as before.
Might it simply mean that Ben Bernanke’s cheap cash has finally dribbled down to the level of numismatics?
We certainly are not high on the financial food chain. It would take some time to reach our level. We hobbyists are often viewed as mild eccentrics rather than profitable financial clients.
This is a lot to ponder. It seems that by looking at it one way, it could be a negative signal for future business. By looking at it another, it might be a positive signal.
Am I on the fence on this one?
You bet I am. I will keep watching.