Volume 53, Number 8, August 2016
Looking on the bright side SO we voted “out” . . . as we go to press with this issue of COIN NEWS we are experiencing a few of the promised (threatened?) effects of the “leave” vote in the Brexit referendum with the Stock Exchange fluctuating wildly (some companies making a killing, others dying in front of our eyes) and the British pound at a 30 year low. Now, as I write we are only a week in and the real issues may be still to be faced, but there is no doubt that the surprise decision of the British people to turn their backs on the EU, even if it never actually happens (and there are plenty of conspiracy theorists who believe it won’t, no matter what the vote), has dealt a bit of a blow to the smooth order of things, at least as far as the economy is concerned. It may settle down, it may get worse, as yet we don’t know but perhaps as coin collectors we might want to look at the effect it may, or may not have on us. Now you may think the world of European politics has little to do with us as numismatists, particularly those of us specialising in British coinage, but as assuredly as it will creep into everybody’s everyday life so Brexit won’t pass us by completely. However, the effects on us may well be less detrimental, indeed may be more beneficial than you may think. To make this assertion I must make assumptions, assumptions that by their nature will be sweeping and won’t encompass all of our readers, however, looking at the “classic” demographic of a coin collector/COIN NEWS reader, i.e. over 45, reasonably affluent, either retired or in a secure job and of above average intelligence (yes you really are I promise), you are less likely to be detrimentally affected by the vote than most. Yes, some pensions may be affected but unless you’re retiring in the immediate future that won’t affect you and the chances are you’re not planning to move up or down the property ladder like those in their 20s or 30s, you’re secure where you are, your job is relatively safe and things will pretty much carry on as they were—until you want to go abroad that is, then the exchange rate will make a coffee and bagel in New York look like a three course meal in Mayfair! But that’s you as a person. What about as a collector? Will Brexit affect your hobby? Well, the first thing to think about is that exchange rate and I’m afraid that if you buy a number of your coins from abroad you will notice a difference: you will see your invoices creeping up a bit—but let’s be candid about this for a moment. If you’re regularly buying your coins from America (that’s where the exchange rate is really hurting, the vote saw the Euro slide too, so we are still getting more Euros per pound than we were just a few years ago), then you’re probably buying coins you really, really want rather than just “on a whim”. Purchases and money, in those cases, become less important; conversely if you’re one of our many overseas readers you’ll notice how the cost of your coins from British dealers has just, in effect, got a lot cheaper! So whilst there will be a few winners and losers with the exchange rate things will, realistically, not change too much in our hobby because of sterling’s fall. What though about the actual price of coins? Won’t they start going up? This is a distinct possibility as people look at the FTSE, look at interest rates and decide they need to put their money in more tangible assets. We’ve already seen a gold spike and who is to say that won’t have a knock on effect onto other coins? On the surface that seems like a bad thing, after all we are collectors and want to add to our collections, price hikes make that difficult—but here’s the thing, it’s like house prices, whilst they are on the up we all feel that little bit richer and we spend accordingly. We spend not because we actually have more money, few of us ever actually ever re-mortgage when our house value goes up and if we do it’s for major expenses not for “fun money”, but because of the feel-good factor; in our heads we are richer even if we never see the cold hard cash. It’s the same with our collections: if the price of coins goes up we may grumble a little about not being able to add to our collections but we are secretly quite pleased that what we already have is now worth quite a bit more— whether we realise the asset or not. And of course there’s that always pleasurable feeling when someone compliments us on our financial nous for putting our money into something concrete rather than stocks and shares, even though we didn’t realise that is what we were doing when we found our first 1905 shilling in change all those years ago! Of course we have no idea where this whole “Brexit” thing is going, we have no idea whether it will be good or bad for Britain, for Europe, for the world, but right now we can say it won’t be a disaster for our hobby. If prices go down (very little chance of that as people move into assets and away from the stock market) then we get to add to our collections. If prices follow gold and go up, well we’re all that little bit richer . . . so whether you voted in or out, whether your holiday is suffering or not, you can perhaps, as a coin collector, see the silver lining, or should that be the gold one?
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