The Core of Numismatics

The numismatic world–and all the related things like paper money, tokens, medals, and things that are even more exonumia than that–is pretty big, actually; not only does it span the world, but it’s big business, too.  There are investors, third party grading services, services that will check the third party grading service and tell you they agree with it, dealers, auction houses, publishing–oh lots of publishing, to the point where there are rare book dealers who specialize in numismatic books, and people talk in awe of others’ numismatic libraries!  I’ve seen no estimates but there just isn’t any way this is not a multi-billion-dollar “industry”–except it’s not an industry, it’s a hobby–in the United States alone.  And I am not including the part of it that’s actually dealing with precious metals that have no added numismatic (or “collector”) value.

All of it–all of it— depends on the collector.  The kid pushing quarters into a 50 State Quarters folder.  And the multimillionaire who bought the 1794 dollar that–many claim–is the very first US silver dollar ever made.  Without collectors who care about a grade, third party grading services would not exist.  The dealers would have no one to buy their stock, or for that matter, to sell them stock either.  Auction houses would have no bidders.  And few would care enough to buy the book before not buying the coin.  So that would wipe out the rare coin book dealers too.

That covers everything in my laundry list except the investor.  Surely the investors would still be out there, buying material and waiting for it to go up in price?  Well, maybe they would for a little while, if all the true collectors vanished.  But an investor is in it primarily to turn around and sell it for a profit later (nothing wrong with that), and for that he needs a buyer.  Now that buyer might be another investor.  Or it could be a collector.  But ultimately, why is the coin valuable?  Because some collector wants it, and wants it badly enough to part with big bucks to purchase a coin that has a face value of fifty cents and maybe ten dollars worth of silver in it.  The collector is the end user of the item, and without an end user, it has no market value. Were it not for us, no investor would care that the dime says 1894 on one side and “S” on the other.  So if we disappeared, the investors would eventually realize that they are now in a bubble… and that very realization would make it burst.

Again, a rare coin’s ultimate value to an investor lies in the fact that a collector wants it.  That having been said, investors entering a market can certainly increase demand that is already there; we’ve all see speculative bubbles, and I’ve been burned by one or two myself.  (The collector that has never made a mistake probably pulls everything out of circulation.  Which could itself be considered a mistake.)

All of those other parts of the hobby are nothing without us collectors.

Does that make them parasites?  Are they exploiting us?  Given the individuals involved are honest, and most are, absolutely not.  (Fraud, on the other hand is always bad.)  You see, we collectors would be almost nothing without them.  We could still collect, but we would be doing it from circulation, with no dealers.  Our collections would be pathetic.  We’d all be at the level of the kid with his coin folder–except we wouldn’t even have the folder, so we’d be wondering what years have “S” mint marks and what ones don’t.  (And if by chance we actually did stumble on something rare, we’d never know it.)  We’d have no idea what was out there, without the books–so the good news, I suppose, would be we’d have no idea how pathetic our collections were.  So yes we need the dealers and writers and publishers almost as badly as they need us.  And third party grading and certification is quite useful (yes! Though we sure like to gripe about them).  And auctions are, bar none, the best way to get your money out of your expensive and eclectic items when that time comes and your collection needs to be offloaded.

All these people make money off of us, but they are worth it.  Of course they are; if they weren’t would we spend our money on them instead of the next coin?  If we woke up one day and decided (for example) “you know these third party grading services are utterly worthless, that coin isn’t worth any more in the slab than out of it,” then suddenly the sounds of cracking slabs would reverberate across the land.  And that would be the end of them–slabs and graders both.  (Of course the fact that the slab really does add value does not mean you should buy the slabbed coin for its label!)

But it must be remembered that even though these individuals greatly enhance our enjoyment of the hobby, we collectors are the core.

Next:  Why the ANA–And Its Leadership–Matters

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