#coins

New from r/coins: /u/calkinsc: World error coin gallery now up — from r/ChineseCoins: China launches yuan gold fix in bid to be price maker → https://is.gd/Z5kvRv

Hi, anyone here?

Hi badon

hi Coinstar1

I've read some of your writings--a lot of good info there

Thanks for the compliment. I'm glad you have enjoyed them.

Just curious, have you been following price of silver? It's been going up strongly it seems

I don't really follow precious metals much these days, since I don't have any investments in them. My last precious metals prediction about gold and silver was just to prove I really can do it, for the benefit of a couple of doubters. But, for myself, I don't have much interest in them.

I should qualify that to say I'm not currently investing in precious metals. The coins I'm investing in are typically gold or silver, but at much higher values than their metal content.

Why no interest in investing in metals, may I ask? I know you have fondness for Chinese coins (so do I), but wouldn't metal bullion be a good, liquid hedge against crisis, inflation, etc

Actually yes, the liquidity is the best thing about the precious metals. The few times I have bought them recently was solely as a substitute for cash, not as an investment.

This is pretty persuasive as far as investments are concerned: http://survivingglobalrecession.com/why-collect...

Right.

I should put that URL in the topic for this chan.

Thanks, I'll take a look at that. Given the illiquidity of rare coins, arent you afraid of being stuck in illiquid stuff and left behind if silver & gold prices skyrocket?

Coinstar1: Afraid no, but indeed that can and does happen.

You're making a good case for diversification into precious metals.

However, if I did it, it would only be short term.

And, the profitability of the Chinese coins is so high, I just can't justify tying up money in anything else.

The coins that are most affected by sudden rises in metals are the fancy bullion coins that have smaller premiums above metal value. Those premiums are typically eliminated in rapidly rising metals market conditions.

New from r/coins: /u/christmas_cod: Silver Roosevelt Dime found this weekend! — from r/ChineseCoins: China launches yuan gold fix in bid to be price maker → https://is.gd/lF2EJt

Yeah, I agree the economics strongly favor Chinese modern coins over the long term. Still, it's not clear when the market for Chinese coins will mature. What if theres a currency or economic crisis before that happens? Then wouldn't we expect even the rare ones would lose their premium?

Yes, that's probably what would happen. In that case, as long as it's not too severe, owning the precious metals would be helpful. However, I have decided I prefer to accumulate a modest stockpile of food first. If I get into a situation where I have a need to hold a lot of cash, I would definitely consider putting some of it into precious metals. Unfortunately, operating costs for the Coin Compendium are

high enough that I haven't been able to accumulate any cash.

I should rephrase that to say I've been struggling to balance my coin-buying habit with my CC-habit :)

My cash usually burns a hole in my pocket when I get on ebay, haha.

New from r/coins: /u/CrazyRusFW: Look what beauty I scored tonight! I know I probably overpaid, but I just had to have it. My precious :) — from r/ChineseCoins: China launches yuan gold fix in bid to be price maker → https://is.gd/p1aKpB

ha, yeah that tends to happen

I don't have a high income, but if I did, I think would have more need to keep some precious metals around.

By the way, is the coin compendium getting income from any sources? Advertising?

No, not really. There's a little bit from the ebay affiliate links on the CC forum and my articles, but that's fairly insignificant. I've been working on a plan to improve that situation, but I don't have any slam-dunk good ideas yet. My current strategy is to build a community at the CC forum, which will be able to improve the ebay affiliate income enough for self-sufficiency. That should work, but it

won't be a quick fix.

I've decided I probably need to restrict access to the CC to only active CC forum members, to compel people to participate there, and build a critical mass of active users. And, of course, to ensure the CC's limited resources go only to people who give their blessing to the CC.

I'm really disappointed that I won't be able to keep it 100% free and open, like it currently is, but I think this might be a good compromise, and I think it will be just enough to make the whole thing work. Fortunately, it will still be free of cost for users.

That would be good... it has a lot of information that would be good for users

I have a few other ideas for the future that will improve this funding vs. cost scenario dramatically, but we need some stability first before I can pull that off.

Right now almost all of my time is spent on earning the money to keep the utilities on. When that becomes less taxing for me, I'll be able to pursue the more sophisticated plans I have. That should be exciting.

Maybe have a registry, like NGCs to attract more regular users?

Yes, that's one of my goals.

I originally wanted to do that on the CC itself, but it turns out the CC is easily overloaded due to its complexity, so I have to find another way to do it.

It will probably require custom software, but the custom software can still interact with the CC.

For example, let's say I make the custom software for your PC, phone, etc where you can keep track of your collection. I could rig it up so you can either have it private, public, or anonymously shared.

When people enter their own coins in the collection software, the coins can be automatically and anonymously recorded in the CC's database. So, that will reduce data entry costs, and allow people to receive notifications if their coins turn up somewhere else.

Cool. Is it possible to use blockchain tech to create a coin ownership database or registry?

There are many good examples of things we can do with the CC, but they're just vaporware for now.

Coinstar1: That's a good question. I never considered that possibility.

Coinstar1: Can you describe more about what you're envisioning?

I don't have an concrete ideas, but as I understand it, blockchain technology can be used to create public, tamper-proof ledger of transactions. That could be useful for recording ownership anonymously, maybe?

Speaking of that, you might want to check out #cryptocurrency-collectors - they're like this channel, but they collect physical bitcoins and similar things.

Coinstar1: Yes, that's what I thought you might have in mind. Unfortunately, it would work as a title of ownership, and the chain would be broken as soon as the fisrst person in the chain decided to remain private, or just didn't care about the blockchain.

In any case, we can do the same thing with the CC and supplementary software, without the need for the blockchain tech.

For example, the Elite Panda Coin Club sort of achieves that goal, because everyone who joins it has established proof of possesion of the coins they use to gain membership.

We could easily do the same thing for any other type of coin.

Right.

How about combining that type of proof of membership with a safe platform for buying, selling and trading rare coins? You could use the blockchain to provide a decentralized escrow service

That's a good idea too!

I'll have to give it some thought, and research the concepts involved a bit more.

For now, I had decided that ebay + PayPal is pretty much unbeatable for that purpose.

Anything I did would have to be incredibly impressive to compete with it, considering how safe buying on ebay is for the buyers.

Coinstar1: There are a lot crypto-coin related channels here. You may find it fascinating to join them and watch the discussions.

#bitcoin and #bitcoin-otc come to mind immediately.

Yeah, Ebay is good for buyers. It really almost goes overboard in protecting them. But that is good for bringing liquidity to the market

Ok, I will check them out at some point

Just type /join #whatever-channel

impressive number of users in those channels

Yeah, and those are just a few of them.

There are around 300'000 peoople here.

If you're using Windows, you can get Hexchat, which will make it easier to keep track of it all.

Most of the cutting-edge info becomes known here before the rest of the world learns about it.

Lots of leader-type people are here, and many of them are quite famous, like the founders of Google, Microsoft, etc.

very cool

There's a lot of idiots too, haha.

Anyways, back to that etopic of coins vs. bullion--the chart at the link you sent, Badon, seems to make a convincing case for rare coins vs. bullion from 1984-2007, BUT, I guess it does not have any data for a true crisis period, which we haven't seen. That's why I'm thinking it may be time to focus on bullion rather than coins. Tough choice, decid

ing between food, bullion, or rare Chinese coins.

Yeah, it depends on what you mean by "a true crisis". A lot of people thought they were pretty clever in exchanging their rubles for gold before the collapse of the USSR, but they just ended up exchanging the gold for food at ridiculous costs. IT cost 1 oz of gold to get 2 sacks of potatoes.

Chances are, in a USSR-style currency collapse crisis, the only things with meaningful value will be basics like food and shelter.

Same goes for a mass-invasion like the European people experienced as refugees from the Germans in the WWI and WWII era.

And like the Middle East people are experiencing right now from the USA.

Yeah, that makes sense that some extreme left tail events would make both coins and bullion pretty worthless (short term). Are there many scenarios (short or medium-term) where bullion IS very useful for preserving wealth and securing basics, more so than rare numismatic items?

Not really. Every scenario I can think of where bullion would be useful that way is basically a catastrophe.

Gresham's Law dominates at all times, and it works even in catastrophe. Are you familiar with it?

It says that "bad money drives out good", that's why people hold gold, but buy and sell using fiat.

If the gold and silver are the only "bad money" left in the world, then you can bet there's no food, no shelter, etc.

Cases where precious metals are useful as money are pretty isolated. For example, when countries do business with each other at the national level, it's done in gold.

In the past I have bought numismatic coins using gold bullion, but only because I had a lot of cash in a high inflation time, and the seller just happened to want gold, which saved me the hassle of selling it for fiat.

Mostly isolated events, not market-wide normalcy.

In my view, you only need as much precious metal as you can carry comfortably, if you need to use it for daily essentials, so I don't hold more than that typically.

If you're smuggling your wealth out of a bad country, the rules are different, but once again it's an isolated case, not something everyone is doing.

Or able to do.

What about scenarios where "traditional" assets like stocks, bonds, currencies, etc. are severely impacted, and most people flee to precious metals? Quite a few prominent authors seem to insist that gold and silver are the safest store of wealth when paper assets crumble

Most people I guess wouldn't flee into rare coins, I guess, because that require knowledge and experience.

That's absolutely true. PRecious metals are THE primary substitute for paper assets during uncertain times, because the precious metals are among the most liquid of all hard asset "alternative" stores of value.

The flight to rare coins usually happens after the precious metals market crashes.

That has been the case in recent history, but I'm not so sure if it's a fundamental that always happens, because I haven't researched it well enough yet.

For the last 50 years or so, numismatics is the third tier alternative after precious metals.

Another thing to keep in mind is it's impossible to invest a billion dollars in coins. So, numismatics is always a "hobby", and has never been elevated to mainstream status.

If a billionaire or a country needs to put money into hard assets, coins are typically a fairly insignificant fraction of it.

That could change in the future if numismatics enters a new heyday, which it might be doing.

The trend toward art pricing in Chinese coins is exactly the formula required to make it happen.

Currently, the world's most valuable coins top out at about $10 million USD. If coins get elevated to the same level as art, then the top would be hundreds of millions of dollars, to perhaps even up to $1 billion USD.

Yeah, I just don't see any person putting a billion into coins. A corporation or government, possibly, but that would be a very different environment--a really different environment. It would have to go beyond a hobby, as you put it, and become much more mainstream and mature

I think that's overly optimistic though. A more likely scenario is a hybridization, where the top art-class coins lie between the top numismatics and the top art. So, maybe valuations for artsy Chinsee coins will reach $20 million, while the pure numismatic coins languish at $10 million.

Yes, the combination of being a non-incoming producing asset, and and illiquid asset, makes coins a permanent small-niche investment, for now.

With that said, nothing has as long of a track record as coin investments. Certainly, among hard asset investments that are non-income producing and illiquid, coins are BY FAR the #1 best choice.

Every wealthy family on the planet probably has a coin collection.

If they stay wealthy, that is.

It's just what wealthy people do - invest in art, diamonds, and coins.

Rinse and repeat.

So that raises an interesting question. If art pricing as you put it occurs, then people value the artistic merits of the coins more than the fact that they were minted. So in that art pricing environment, doesn't it become irrelevant whether a coin is Chinese, British, American, Tuvalu? Doesnt' it become unimportant whether a coin is from an offic

ial Chinese mint?

If art pricing happens, the most important factor will be, by definition, the name of the artist.

All of those other factors might still come into play, though. Very often the artist's name is famous BECAUSE he's from a particular mint.

The quality of the art isn't much of a factor. Adolf Hitler was a crappy artist, but solely beacuse he's famous, his art is valuable.

He's not even famous for being an artist, haha.

I picked China as the first place we would see art pricing because of the way Chinese culture values art so much more than other cultures. We have seen hints of art pricing in the American coin market with the Saint Gaudens designs, and the designs by Adolf Weinman.

Yes, it certainly seems like some mints are emphasizing artists names.

That was the first evidence I saw that my guesses about art pricing happening might be correct.

When I started seeing artist's names on COA's from China.

I think you wrote about this elsewhere. Chinese mints like Nanjing mint list the name of the artist on the certificate of authenticity. I don't know how long they have been doing this, but it seems like their standard practice now.

I'm not sure what the oldest coin is, but it seems to have all started around 2014.

For sure, it began in earnest in 2015 or 2016.

In 2015, the mints were complaining if an artist's name was on a COA, and they'd destroy them and print new COA's without the artist's names.

Why do you think that changed? Did the mints realize there was more demand for coins where the artist name is known?

That's why the Shenyang Mint's 2015 2 oz silver lunar goat panda COA with the artist's name is valuable today, and could become a LOT more valuable.

Yes, mints were being asked more often for a specific artist to design a coin, and sales were better for coins that came from artists that already had a loyal fan base.

Feng Yunming was one of the first artists to be treated that way.