This past Saturday, my company had a booth at the Kalamazoo (Michigan) Numismatic Club show. This twice-a- year event has been a popular venue for decades for collectors and dealers to meet face to face to conduct business.
The weather was almost perfect for a coin show. It was wet enough outside that people would not be doing yard work. Still, it was not nasty enough to make travel a danger.
My company staffed a corner booth in a prime location. We had lots of merchandise on display from ancient coins, foreign and U.S. collector coins and exonumia to silver bullion coins and bars. The customer traffic was normal for this show. Yet about the only areas where we had any sales were the silver bullion and exonumia. Sales in other categories were almost non-existent. To go with minimal sales, very little merchandise was offered to us to possibly purchase.
As the show went on, a number of dealer friends stopped by our booth to complain that their results on Saturday were exceptionally poor compared to prior shows at this venue. This complaint of a sales slowdown is something we have been hearing from dealers across the country for much of this year. So, are collectors really becoming more cautious? If so, why?
I think that it is probably true that business may be slowing down at many local coin shows. Yes, I do think that the general public is realizing that the American economy is faring worse than the politicians and so-called economic experts are telling us. A general reaction when the economy looks gloomy is that people rein in their spending on discretionary items, with numismatic items being in this category.
However, I suspect that part of the reason for the slowdown in local coin show activity has to do with the expansion of online numismatic sales activity. As an example, between my own company’s listings on its website and on eBay, our online sales account for the majority of paper money sales. As a result of such merchandise selling readily online, we have insignificant currency inventory available to take to shows or put in our showroom displays. Our online sales also tend to dominate the dollar volume of exonumia sales and in some other numismatic categories.
I have heard similar stories from a number of other coin dealers. They tell me that they leave a lot of their best inventory at home instead of bringing it to shows because it sells well online. As a result, a lot of inventory that would be desirable to collectors or other dealers does not go to coin shows.
Now, there are also other contributing factors to a slowdown in numismatic sales at local coin shows and across the market in general. Gold and silver prices are down substantially from their peaks in 2011, with the yellow metal down about 40 percent and silver almost 70 percent lower. The overall barometers of American investor sentiment for acquiring physical precious metals are about as negative as any market watchers have ever seen. There are spurts of demand after significant declines in the spot prices, as happened in the past few months, but interest has fallen off quickly as there was not a significant price rebound.
Another factor to consider is the comparative flood of new coins coming from the U.S. Mint. It was only a few decades ago when collectors could acquire all proof and uncirculated coins issued in a particular year for well under $50. For example, in 1968 that cost was $7.50.
Today, with all the bullion issues, the variety of numismatic issues of the bullion issues, and the tag-along coins (such as the $10 half-ounce gold First Spouse issues and the 5-ounce silver America the Beautiful quarters), a collector could easily spend more than $5,000 to acquire current year issues. So, you have the U.S. Mint draining significant funds from coin collectors that might otherwise be spent with coin dealers, and you have a fatigue level of “too many coin issues to keep up.”
Next, you have to consider the kinds of collector coins the U.S. Mint is producing. The statehood quarter series was tremendously popular with the general public. In contrast, the America the Beautiful series is of much less interest.
The Presidential dollars started off being popular with the public, but fell off quickly enough that the U.S. Mint stopped putting the coins into circulation.
The 2014 Kennedy half dollar issues brought a flurry of interest, but not much coinage coming from the U.S. Mint over the past few years has really caught the public fancy.
Maybe next year’s issues honoring the 100th Anniversary of the Liberty Head (Mercury) dime, Standing Liberty quarter, and Walking Liberty half dollar might bring some spark.
I also speculate that the failure of the U.S. Treasury to abolish the $1 and $2 Federal Reserve Notes, replacing them with circulating coins of the same denominations, is a missed opportunity to expand interest in numismatics.
Beyond the nuts and bolts of collecting rare coins and paper money, you also have to look at the changes in lifestyle of the youngsters growing up. In my generation, newspapers were delivered by neighborhood children who also collected payment from customers. A significant percentage of paper carriers became numismatists because of all the change going through their hands. Today the newspapers themselves collect subscription payments and many adults deliver the issues.
There has also been a trend for children to grow up using the Internet and video games for entertainment and communication, reducing interest in collecting physical objects.
So, while I can understand that many local coin shows may be generating less business for the dealers than in years past, there are several possible contributing factors making this so beyond collectors becoming more cautious with their discretionary spending. We must now keep in mind that there are other areas, such as online trading, where there is substantial trading activity that simply did not exist just a few years ago.
Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He is the owner emeritus and communications officer of Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com). His radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).