Coin News

Volume 45, Number 7, July 2008

Isle of Man banknotes

Volume 45, Number 7, July 2008

Back to Basics It seems “We’re all doomed” (the words of Private Fraser from Warmington-on-Sea’s Home Guard from Television’s Dad’s Army for those who don’t know) scream at us from the front page of every newspaper and headline and every news website. Rising oil prices, rising food prices, the credit crunch, the housing bubble bursting, unemployment on the rise and a Government that’s seeing its popularity rating plummet almost daily, are all conspiring to ensure that we are, apparently, heading for a huge economic downturn—or so the media would have us believe. Certainly there’s no doubt that things are getting tougher, the fact that it now costs 30 per cent more to fill a tank with diesel than it did this time last year and the fact that our food staples seem to be costing more every week, can only leave us all feeling poorer but I’ll stick my neck out here and say for many of us, at least in our hobby, things really aren’t as bad as they may seem. Most of us won’t be too affected by the credit crunch—many of us are in “late middle-age” and are close to paying off our mortgages if we haven’t done so already. We don’t plan to continue an upward trend on the property ladder and whilst we might have been planning to down-size, we are quite happy to wait until things stabilise a bit. If we are coin collectors the chances are we aren’t on very low incomes and whilst it’s true that we might not all be earning mega-money in the city nor are we struggling to decide whether we should “eat or heat”. The fact that we’ve had enough disposable income to spend on our hobby indicates that we would be considered by many to be “comfortable” and as such we’re not feeling the real effects of the current “crisis” in the same way as some. True, because of rising prices we may well have suddenly found that we have less disposable income than we once had and those collectors on fixed pensions will, I’m sure, be feeling the pinch, but even in their case the current economic downturn doesn’t have to be a disaster and whilst you may not realise it there may be some real plus points in all this for us numismatists. The first plus point comes from the simple fact that if we collect silver or gold our collections have gone up in value—the rise in precious metal prices mean that should we wish to dispose of our beloved coins we may well get more for them than we would have twelve months ago (back in July last year gold hovered around $670 an ounce, at the time of writing it is a shade below $900; silver dipped to below $12 an ounce last summer, today it’s nearer $17). Of course most of us wouldn’t dream of selling, but then we weren’t planning on selling our houses either and yet still felt richer when their prices were going up and seem to feel poorer now—so what’s the difference? The second plus point is that one of the biggest problems in recent years has been the lack of stock availability. In the last decade more and more people have been interested in coins but often they aren’t “collectors” but investors, folk who got stung when the dotcom bubble burst and looked to put their money elsewhere—coins, banknotes, et al, were an attractive option. Now, perhaps, as money is less readily available, we may see some of those coins coming back onto the market as assets are liquidated. Now there’s nothing wrong with investing in coins per se—we would all be gutted if our collections actually lost money, but we can’t help thinking that the place for some of these coins isn’t hidden away in a vault somewhere, but rather in a collectors cabinet, to be treasured by a true numismatist rather than seen as just another part of a portfolio. The third advantage to be taken of this current situation is one that might not be obvious at first and to many it will actually seem a disadvantage—but bear with me. Perhaps now is the time to get back to basics and remember once again why we started collecting coins in the first place. Do you remember when you were so much younger and had less money? Maybe pocket money or the proceeds from your first job? Do you remember when you saved some of that meagre pittance to buy the coin you’d had your eye on for ages? Didn’t the acquisition seem so much sweeter than it does today when your ability to purchase the coins of your choice has got so much easier? Of course it did—the fact that you went out there and found the exact coin that you wanted to spend your money on and then scrimped and saved to get it meant that it became a valuable part of your collection. As life went on so buying coins became easier, as it should. But I bet you still remember those early purchases more fondly than your most recent ones… So if money is a little tight at the moment, if you’re finding that the petrol bill and food bill are conspiring against you and that you don’t have the money to spend on your beloved hobby that you once did—don’t give up, don’t throw in the towel or sell up in despair—far better to take yourself back to your schoolboy days and start picking and choosing the coins your REALLY want and, when you’ve found them save up for them, maybe ask the dealer to put them aside on “layaway” (where you pay him a deposit then a set amount over a set period of time agreed by you both until they are yours) or sell off some of your “lesser” coins to pay for them. That’s how it always used to be—and we enjoyed our hobby then possibly more than many of us do now. When money is plentiful we can buy what we want, we become accumulators. When things are a bit stretched we become collectors again—and that’s not necessarily a bad thing.

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