By Kathleen Duncan -  Pinnacle Rarities

With the scary headlines in the economic world today, we are pleased at the stability of rare coin prices. The market corrected late last year and has since stabilized. Dealers at Long Beach seemed comfortable that prices were not about to take another dive, and were seemingly spending a bit more than they had at the FUN show.

Two major auctions were held in conjunction with last week’s thrice yearly Long Beach convention: the pre-show Goldberg Sale and Heritage’s sale during the show. Part 2 of the famous Naftzger Large Cents, which totaled $3.2 million themselves, highlighted the Goldberg venue. Many of the issues were exceptionally scarce as well as very high-quality . It was therefore no surprise that prices were robust, with four coins selling well into six figures. Heritage had the usual mix of everything and prices were about what we’ve come to expect from the new level…all over the board. The low-end material is bringing low prices and the nice material is trading at levels on average of 20% below 2008 summer numbers. There is still big money being spent, albeit more cautiously than in early 2008.

Though Long Beach has not been a great collector show for at least a couple years, there were plenty of them present last week, many to buy. Dealer-to-dealer business was sluggish, as has been the case since October. We did notice that dealers were focusing on their want lists more intensely, which led to several unexpected sales for us from people who in the past have been too busy to get around to our table. We have also had a surprising number of new client sales over the past couple months, a good omen going forward. We found fewer coins than normal to buy, indicating that most of the great material remains in strong hands. Fortunately, our collector base keeps our inventory replenished, as we are continually making both small and large purchases from our clients. (Thank you!)

The “Inflation” Stimulus Package
The Senate voted approval of President Obama’s economic stimulus package, which will cost $800 billion. These funds to be injected into the economy must first be taxed or borrowed out of the economy. This will eventually cause interest rates to go up, as it will be difficult to attract investors at the current levels, which are basically zero. Although I doubt this package will be good for the economy, it will most certainly stimulate inflation.

It is depressing that Washington has decided the cure for the economy’s ills is government overspending, when the trouble was caused by consumer overspending. People over-borrowed for homes they couldn’t afford and banks did the same with bad investments. Now Washington is borrowing $800 billion that it can’t afford. This is a good idea, why? The Heritage Foundation calculated that this stimulus bill will increase the national debt to $14 trillion in fiscal 2010 – 95% of the entire national GDP. The obvious result will be big time inflation, which should send precious metals higher still. Rare coins and other tangible assets, which historically have faired well in times of inflation, should also do fine.

Related posts:

1. FUN Displayed Strong Collector Demand
2. Superior Galleries Realizes Strong Prices in July 26, 2008 Baltimore Elite Auction
3. Superior Galleries Realizes Strong Prices in April 10, 2008 Santa Clara Elite Auction
4. Unusual Items: 1836 Gobrecht Dollar, Judd-63 Name Below Base, Starless Obverse and Reverse
5. Strong Market Boosts September ’07 Long Beach Expo
6. Jack Lee – One of the Great Collector-Dealers of Our Time
7. The “Deal Shopping” Mentality and Rare Coin Prices
8. Gold futures close near $900 as oil prices surge
9. Smythe results strong
10. Mind-Boggling Prices for Washington Quarters