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Caution signaled in Berlin

Word from the bourse floor of the World Money Fair held over the weekend in Berlin, Germany, was that business was kind of slow.

I was not there, so I could not see for myself.

My superiors decided that this was not a year to spend the money on travel to Europe.

It appears I am not alone in cutting out the show.

If our business decision is typical, many other individuals who would ordinarily attend would have made the same decision to stay away.

That would account for less business and less crowded aisles.

The portion of the European Union that uses the euro now is reportedly experiencing deflation – falling prices – compared to one year ago despite the fact that the exchange rate of the euro has dropped dramatically in terms of the U.S. dollar to $1.13.

Deflation means that money spent next month or next year goes further than money spent today.

The logical result is people postpone expenses as long as they can to get the most value for their money.

That includes going to coin shows.

Europeans also are holding their breaths over the situation in Greece.

Fears include runs on banks there, repudiation of debt and even the return of the drachma.

All these are potential scenarios persuade people to be cautious.

Russia is experiencing sanctions and the economic fallout from oil prices that are down by half.

The ruble has dropped by more than half since the last show.

Russian buyers were big spenders at previous Berlin gatherings.

There is a question mark over how fast the Chinese economy can grow this year.

Declines in its importation of raw materials from iron ore to copper ripple through much of the world.

The result is places like Australia, which exports raw materials, are retrenching.

The Australian dollar is below 78 U.S. cents, a decline of 26 percent or so in less than two years. Canada's dollar has similarly declined.

Put another way, a coin that is priced in U.S. dollars that is unchanged in price will still require Australians to pay 26 percent more.

That is not a recipe for new spending by Australians.

And so it goes.

All these factors may have played out in Berlin, or none of them.

Whatever the cause, caution was the order of the day at the intersection of international numismatic business in Berlin.

Buzz blogger Dave Harper is winner of the 2014 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."