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I own lots of collectable coins from the 70's (mostly mint dollars and quarters.) Some of my friends are telling me that the US economy is going to crash and the the dollar is going to lose its value. This got me thinking. In the unlikely event that this happens (hyper inflation, a drastic drop in value compared to other currencies or a complete loss of value), how would that effect the value on my coins?

This may not be the best place to ask this question. Please help me get it to the right place.

Hoytman
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1 Answers1

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Yes, their value would collapse.

But not for the reason you might think.

It's not because they're the same currency, per se.

But rather because a major collapse in the US dollar's value would be part of a much larger economic collapse. Which means that disposable wealth would be rare, and the demand for indulgences such as collectors' coins would dry up. At the same time, you'd have lots of owners of such coins trying to liquidate their assets. So, there'd probably be both a big increase in supply, and a big decrease in demand, leading to plummeting prices.

Promoters of any number of yieldless "investments" such as bitcoin, gold, or collectables, will tell you that their investment would be a safe-haven in times of crisis. But at times of major crises, the correlations (the betas) tend towards one. Hedges stop being hedges.

410 gone
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  • Its interesting that you mentioned bitcoins (which recently got my attention.) I would think that their ease of transfer, inherent supply cap and world wide acceptance would support their value in a time of economic trouble. – Hoytman Sep 05 '15 at 15:56
  • @Hoytman it's hard to guess at when a ponzi bubble will pop, but those who guess correctly will take a lot of money off those who guess wrongly – 410 gone Sep 05 '15 at 16:10
  • I think they already have – Hoytman Sep 05 '15 at 16:49
  • @Hoytman if it ain't got to zero, it ain't popped yet – 410 gone Sep 05 '15 at 16:51