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Ignorance ain't bliss

First I wanted laugh.

Then it was “uh-oh.” The lesson  just might apply to numismatics, too.

IndyMac Bank of Pasadena, Calif., failed Friday and yet a run on it by depositors seems to have started afterwards if the news footage from yesterday is any guide.

So, after the bank failed, after the government took it over, after the obligations of the Federal Deposit Insurance Corp. to cover any deposit of $100,000 or less were triggered, that’s when people decided to start a run?

How silly is that? Any money to be lost was already lost, and 98 percent of the depositors are covered by the $100,000 guarantee. Why was there a run at all?

The FDIC guarantee should be well known, but it obviously isn’t. How can that be the case in the Internet age with so much information at our fingertips?

Apparently fingertips aren’t close enough. It needs to be in your head.

What’s the numismatic connection? Think about it. Collectors have always stressed knowledge and they are quite right to do so. However, the threat isn’t from our lack of knowledge, but like the bank run, the danger comes from the lack of knowledge of the uninformed.

If coin dealers are going to be put out of business by overzealous regulators, it is the ignorance of those regulators we  should be worried about.

A city council that cannot tell the difference between a fly-by-night motel coin buyer and a community based shop owner is dangerous.

The state department’s seemingly willful blindness in equating collectors of ancient coins with looters is dangerous.

People who buy supposedly bargain coins online from sellers in China are dangerous because all they know is that they bought coins and they lost money.

It isn’t our ignorance that’s the problem. It’s there’s.

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5 Responses to Ignorance ain't bliss

  1. Scott in DC says:

    In your last line, "It isn’t our ignorance that’s the problem. It’s there’s." Besides the obvious grammatical issue (you should have wrote "It’s theirs."), who are the plural "they" you are referring? Are you referring to those in a legislative position making laws that hurt legitimate dealers? Or folks like the unelected State Department not understanding the difference between a collector and a looter? Or are you talking about those who buy Chinese fakes? It seems as if you are trying to paint a with a broad brush and not getting the details across.

    Unfortunately, this ignorance is our problem. It is our problem when we collect ancients and foreign coins that the unelected officials at the State Department can call us looters. It is our problem when legislators attempting to craft consumer protection laws make it difficult for legitimate dealers from being available for our collecting needs. It is our problem when we have to deal with those who buy Chinese made fakes and flood the market making shopping for legitimate coins more difficult.

    As a hobby, we cannot sit by while ignorance changes how we collect. We need to educate those who will impact what we love so that we can allow it to evolve on our own terms and not the terms of the ignorant. We need to educate policy makers and legislators so that thousands of collectors are not instantly turned into scofflaws.

    Finally, as a hobby, we need an instant education campaign that will get the attention of those going to China for the Olympics. If these people buy into the hype without knowing these coins are counterfeit, we will have problems in the months to come. Dealers, some who have been already chronicled in Numismatic News as surly, will become the "bad guy" to those who spent a lot of money on these bogus pieces of metal hoping to get rich. It will not put numismatics in a good light while they try to dump the coins using online auction sites that already have issues.

    Ignorance may be bliss, but the ramifications of their bliss will be our pain.

  2. Dave Harper says:

    Thanks for the comments and catching the typo.

  3. ashish_haralalka says:

    Its their’s not there’s. Please have someone check your grammar before you post the quality of posts is declining by the day. The real danger begins when a coin expert starts to believe they are the expert in everything.

  4. Pierre Fricke says:

    It’s not an issue of people knowing about the FDIC guarantee. It’s an issue about trust in the government and how long it might take to actually get to your money. In this case, it seems the government handled it pretty well in that anyone with less than $100K could get their money within a couple of days.

  5. Mark says:

    That’s fine for the IndyMac people but the FDIC only had funds to conver 1.2% of insured deposits before IndyMac failed. That failure caused the FDIC to use at leat 10% of it’s resources. If just one major bank like Citi, JP Morgan Chase or Bank of America fails, the FDIC will be broke and the government will have to start prining more money just to cover the "insured" deposits further eroding the dollar.

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