Numisphere Podcast - Coins, Currency, Bullion
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Numisphere Podcast - Coins, Currency, Bullion
A 2023 Review of Precious Metals and Numismatics
Can precious metals and rare coins fortify your financial future amid global uncertainty? This episode takes you on a journey through the 2023 metals and numismatic markets, revealing how gold and silver have once again proven to be the saviors in shaky times, and how rare coins have captivated both collectors and investors. We delve into the impact of inflation, geopolitical upheavals, and economic fluctuations, providing insights into the burgeoning industrial demand for silver and the BRICS nations' challenge to the dollar's supremacy in commodity trading. Join us as we uncover how these factors have shaped the market and what it means for the stability of your own portfolio.
As the narrative unfolds, you'll be captivated by the resurgence of coin shows and the dynamic convergence of the digital and physical collecting spaces. We discuss the latest trends that are reshaping how enthusiasts engage with their passion and what the normalization of bullion premiums means for your wallet. With the national debt hitting an astounding 34 trillion dollars and international confidence in the US dollar potentially faltering, we offer a critical analysis of the wider economic implications. So, tune in to navigate the currents of collecting and investing with us, and discover how to safeguard your assets against the unpredictable tides of tomorrow's economy.
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Disclaimer: The views and opinions expressed on The Numisphere Podcast are for informational and entertainment purposes only and should not be considered financial advice. The content shared by the hosts, guests, or any participants of the podcast is purely their own opinion and not intended to be a substitute for professional financial advice. Always consult with a qualified financial advisor before making any financial decisions. The Numisphere Podcast, including its hosts and guests, does not assume any responsibility for any actions taken upon the advice given in the podcast episodes.
Welcome back to the Neumasphere. I'm Tyler O'Connor and I'm TJ O'Connor. As we enter into the new year, we want to take a moment and reflect back on 2023 and discuss how the metals and pneumatic markets perform and share some of our thoughts with you, TJ. Why don't you kick us off about sharing your opinion on how the metals markets performed last year?
TJ O'Connor:Well, 2023 was certainly an interesting year. We experienced quite a bit of price volatility, especially coming out of Q1 and into Q2. Some of the price volatility was impacted by factors such as inflation concerns. There was also some geopolitical tensions, to say the least. Obviously, we've seen that front line in the news. And then there's also been fluctuating global economic conditions that have led to a lot of central bank purchasing and holding of precious metals, which has been very interesting.
TJ O'Connor:Both the gold and the silver sector has been bought up by droves in the central banks. Now this raising demand isn't just impacted on a central bank level, but it's also been impacted on a collector level or an investor level, where now precious metals are being seen more as a safe haven asset as they have been in the past, and that being a safe haven asset in times of instability and uncertainty for economics have driven people back to metals as one of the crucial items to hold in their investment portfolio. Now, silver in particular has been a very unique one. We've seen a lot of additional applications be brought into effect for silver, and those are being put in industrial levels across the board. We've seen that certainly within the solar panel and within the battery and within the communication network segments of industry, and I think that the call for utilizing silver is only going to be increasing as we go forward, but we'll talk about that more in our projection.
TJ O'Connor:So, with that, I think that, with the central bank buying, this has also been one of the geopolitical factors has been the implementation of BRICS growing its forces, and we're seeing now that BRICS will be putting into effect alternative units of exchange besides the US dollar in order to execute trade for commodities. And what's even more interesting to me is that the BRICS nations are now going to be putting together commodities backing for these currencies, so that could definitely play out to some interesting factors coming up for us Absolutely Now. With that being said, let's find out the exciting numismatic highlights of 2023.
Tyler O'Connor:So, in my opinion, the numismatic industry has really grown dramatically over the last couple of years. We saw this incredible peak come out of COVID-2021, sod nice stabilizing in 2022 and 23,. Given a very unique landscape for investing, for collecting. I think it showed a lot of resilience. So we saw some amazing coins coming out to market. The rare coin aspect has just been incredible.
Tyler O'Connor:Stacks Bauer's has been putting out some awesome stuff Amazing stuff coming through Collections that we just don't see and amazing quality, and there are buyers for it. So there's no doubt that not only is physical gold and silver and other precious metals being held for investment, but these higher grade, very rare US coins are definitely being held not just for collectors but for those investors to hold on to for a long time and, moreover, we saw the gold spot price rising. It drew a lot more attention for the average Joe to turn into holding metals. But that's definitely carried over to the numismatic aspect as well, and it's been really interesting to see that you have all kinds of new people that suddenly got stirred up into it because they were concerned for whatever economic reasons, Thank you. And then suddenly they convert into oh well, I really like these coins, I like the history right, and now you've got yourself a genuine collector who's also investing, which is great.
Tyler O'Connor:But some of the stuff that we saw come to market. I mean we saw stuff from the Lysberg collections, the Dr William Alden collection. It's just killer stuff, Like there was a 1855 Kellogg and Cole $50 gold piece sold for $780,000.
TJ O'Connor:$80,000. I mean, when you talk about the premium pieces within the numismatic market, those highlight items coming through. There were certainly a lot of them in 2023.
Tyler O'Connor:Oh yeah, I mean one auction alone. It was a stacks auction, I think. Over six coins went heavily into six figures.
TJ O'Connor:My goodness.
Tyler O'Connor:And there were several coins that went into the seven figures, right. It's just been a very, very interesting change, because we're seeing stuff that only 10 years ago may have sold to 300,000, and now it's pushing 6 to 800.
TJ O'Connor:Yeah.
Tyler O'Connor:So the value is just growing dramatically. It's really impressive to see it and it's kind of a unique time in history to see the expansion of people seeing coins as a true store of value Absolutely, and that's been really cool. Another coin that sold was the 1860 Clark Gruber and Co Pikes Peak $20. That one's sold for $552,000. We haven't seen it. Look it up. Gorgeous coin, definitely awesome. So, yeah, I think that the industry as a whole, for the newsmatic side, it's just thriving. I don't see it going away. I do see, you know, there's definitely some contraction to the average collector and I'll talk about that in a little bit too, but I think it's still something that we can all do and those that have the extra money to do it In 2023, we're certainly doing it. Yeah, absolutely.
TJ O'Connor:I think that 2023 overall was a very unique time and there was a lot of dramatic and emotional ups and downs throughout the year. Just a few Yep and I have to say you know, whether it be small softening within those mid-range to low-range coins and a heightened acceleration in the premium coins and the rare coins just overall, there's been a lot of motion happening within the industry itself. Absolutely, I know for myself that you have some of the highlights that I saw in 2023, I'd have to say that gold trading at its all-time high certainly brought a ton of attention back on to precious metals, and that was just recently here in the end of Q4 for 2023. And I think it's also a good time for that to happen. As we go into some economic uncertainties here, with the US budget not having been approved, that being on deck this coming January and into February, it might be something that people see as a viable hedge against some type of dollar contraction and its value. I think they're already seeing that. Yeah, absolutely.
TJ O'Connor:But in addition to gold hitting its all-time high, I think that another highlight was to see the premiums, specifically in silver contract over the time period from Q1 to Q2 and then moving into Q3 and Q4. Seeing that kind of come down dramatically and really get close to that spot price of silver has made the bullion market more accessible. Has made the bullion market more accessible all around for consumers that want to get in. So, whether it be that small-time consumer that's just looking to pick up an ounce or two and they're just getting started, or even if it's an investor that was waiting to make a move for the large sum, having those premiums contracting gave them that opportunity to take advantage of what's happening in the market right now.
Tyler O'Connor:I mean, we saw Silver Eagle premiums 15 plus.
TJ O'Connor:Yeah, yeah, I think at one point we were knocking on the door of $18 over the spot price of silver and some people were taking advantage and going even beyond that I know.
Tyler O'Connor:Here we were advising customers. It's just not the time to buy Silver Eagles. There was no reason to be paying such a dramatic premium and inevitably it'll come down. And I think recently, I mean, you could get them four dollars over almost.
TJ O'Connor:Exactly. It's odd how that happened, you know, and at first we had rumblings of supply shortages throughout the market, but somehow, in a miraculous event, come mid-year the supply issues had resolved themselves, but supposedly the bank collapse that had been intended that might have sparked the interest in Q1 and Q2 had been resolved as well. That's still yet to be seen here, obviously, again making 2024 a very interesting possibility for all of us. So, in addition to the contraction in the silver premiums and gold hitting its all-time high, I have to say that the overall highlight is the growth of the coin collecting industry in a whole, and I'm being inclusive with bullion stackers, in addition to numismatic collectors. Here we have an estimated 9.6 billion dollar market valuation for 2023. And this has a CAGR or forecasted to go at 10.4 percent, carrying us to almost 20.8 billion dollar market valuation for 2031.
TJ O'Connor:I know that this is from those collectors that have been coming in by giving, by being given those opportunities of lower premium costing precious metals or bringing in that attention to gold and silver. But really the highlight for me is in 2023, my most astute observation is the amount of information that has been available to the consumer this year just seems unprecedented to me. Anything that you would like to know is right at your fingertips and there's just so many people that are contributing to the education of what's happening right now and the value of precious metals in an economic situation like this. But in addition to the amount, it's more about the amount of ways that people are able to receive this. Here we are we're doing a podcast. We're trying to get the information out to people. People can see us through a video. This is increasing all around, helping educate the consumer base and bring awareness to the potential benefits of having precious metals as an economic hedge in your portfolio. Definitely so. That's my segment on highlights. What do you have for highlights on 2023?
Tyler O'Connor:So some of the biggest things I saw on 23 was just this resurgence of coin shows.
Tyler O'Connor:While there are definitely some that have been kind of falling to the wayside, failing dropping off the staples, I'm seeing them just perform really, really well and attending them has been fantastic. Everything from Baltimore Fun Show I mean all of them Long Beach they're all performing very well and they're getting people back out there. So it's not just those on the digital side, but I'm actually seeing and I think you may have been with me when we were up in Manchester that we were meeting people off of what not and they were attending their first show. So you took people from this digital realm and they're actually coming out to kind of the traditional realm of coin shows and it was really interesting and it was awesome to be able to kind of mesh those two worlds right, Because these were people I followed. I had never really seen their faces, because all you ever see is their hands, and here I am sitting on a park bench just chatting with them out of the blue like oh yeah, wait, I know you, I follow you.
TJ O'Connor:Yeah, it's so odd that you say this because it's almost the antithesis of what people expect the coin industry to be right, the anti-technology, the anti-moving forward with any type of change from the traditional handwritten receipt and we do business by a handshake, right. But here we are. This is almost like an organic migration into the digital realm, with numismatics by people like that what not community coming into the show realm, participating in a way that they haven't been able to participate before. They're no longer able to hide behind a camera, they have to be face to face with somebody and that's a different environment, for sure. But it's really interesting to see that organic migration into the digital realm, maybe even shows making some additional efforts to reach out you know, putting out newsletters reaching out through subscriptions, keeping people aware of what's going on.
TJ O'Connor:I know we've seen a lot of development like that happen in the shows and I honestly hope it continues, because it seems to be more closely….
Tyler O'Connor:I think that they really have to to survive, right? I mean, that's how it goes. So yeah, you've got the guys that have been telling the show for the last 50 years. They know about it, but how does everybody else figure out about it? If you don't have that digital presence where you can mesh those two worlds, you're not going to have new people attending, it's just you're going to die. That's what's going to happen at the show.
TJ O'Connor:I'd ask myself how many people under the age of 30 are actually looking at a newspaper to find out when the local corn show is going to be taking place.
Tyler O'Connor:I mean even older. Now, realistically I would say almost the 45 and under them graphic are on their phones. It's a digital world for them. It is that ease and convenience of let's do a quick Google search or let's see what's going on. Oh yeah, I saw this in a coin group that there was a show over here. Let's go.
TJ O'Connor:And don't get me wrong, it's not that I want to dehumanitize what's going on in the numismatic and ambillion stacking community. That's not what I'm inferring. I just think that that organic migration is making that information more available and making the hobby more accessible, which is ultimately helping contribute to this growth, like that's CAGR of 10.4%. No doubt it would be a very exciting time to see this industry get over a 20 billion market valuation that would be amazing.
Tyler O'Connor:Fantastic for all of us, no doubt. So the other thing that I really picked up out of 2023, you mentioned the stabilizing premiums for bullion, but I'm also seeing, on the numismatic side, so crazy prices that you were seeing on like 19, 21 piece dollar. They're actually coming down back to reasonable prices and you're seeing that across the board. It's on all of those kind of key date mid tier type coins. You're not having to pay two, three times what they were worth. They're coming back down to a reasonable price of where they should be.
TJ O'Connor:Do you think that this is kind of like a rebalancing from the hype that was produced in 2020, when we all went? Into lockdown and everybody had some extra money to spend.
Tyler O'Connor:Oh, definitely yeah the free government money and the unemployment checks and all that extra that we had is definitely gone All right. So people aren't willing to take that average coin and pay a 20% over what it's worth anymore.
TJ O'Connor:We're saying we're getting a little bit more frugal now that the fossil may have been turned off and we're actually conscious about what we're.
Tyler O'Connor:We have to be aware of how we're spending our money no doubt Agreed, and I think that's across the board for everybody. Unfortunately, given the economic times, yeah, which, again, if you're in that situation, there's still coins at a price point that you can get if you have the money to do it. And the other thing that I really saw in 23 is kind of the other side of the coin is people that were collecting through all of that hype, or long-term collectors that were entering into hardship. There was a lot of sales, there was a lot of people selling inventory back into the market, which was great from the business side right.
Tyler O'Connor:And you're seeing them maybe reallocate what they were purchasing all the kind of peripheral coins that they were getting and they're focusing their collections. They're becoming a little more refined in what it is they're trying to do, or they had to pay the electric bill. So we're definitely seeing a little bit of that, not a little bit. We're seeing a lot of that happening where people really need to get out of those assets and take care of responsibilities because of the economic situation that we're in. I agree.
TJ O'Connor:It's hard to see that occur when you see a collector need to liquidate in order to create funds for an emergency or a need within their finances and it's always kind of sad to see because it usually takes a little while to bounce back right. You gotta get corrected and then you're kind of revaluating where your money goes at every decision. But I think that that's gonna be a factor moving forward as well and it's gonna be an interesting paradigm as we go Moving into 2024, I think that we'll continue to see that contraction within the liquidity in the average consumer's pocket how much can be spent and likely the constraint on that cash flow for them. But at the same time, I truly think that the continued geopolitical tensions and the continued industrial applications and demand for precious metals are going to continue to increase at the same time. So we're definitely gonna see the ups and the downs when it comes to the demand moving forward into 2024.
Tyler O'Connor:Right, yeah, I mean there's no question that I foresee a lot of challenges for both pneumismatic and bullion markets. You know the current administration is talking about how they have a handle on inflation and how they're able to start focusing on cutting rates for 2024. Might be a little premature in my opinion, given everything that's actually going on. But we're also entering an election year which historically is known to bring a lot of instability, a lot of fear mongering, a lot of concern. So that generally will especially mess with the bullion market. But additionally, I do think that the majority of people don't necessarily have that money because of the fear of what we know is coming.
Tyler O'Connor:So we talked a little bit about what's happening with the economy, the hardship. The average person just doesn't have the excess anymore, Right, people's grocery bills have gone up 20, 30, 40%. Gas for a majority of 23 was pretty high. Thankfully, we're seeing a little bit of stability there too. But I think that that stress on the lower class and middle class collector is evident, right. So we're seeing a bit of a slowdown at the last, maybe quarter or so on kind of those mid-tier products. So the average collector material has definitely slowed down a little bit. Those that are still collecting the, especially a bus cap half dollars. Those are still thriving. So you've got these ebbs and flows or kind of gaps of the average collector that just doesn't have the means to do it anymore, which we've seen a few times.
Tyler O'Connor:Right, Definitely trends with the economy for everybody, but I think that that's gonna be a huge issue for us in the future and I do think that the rare coin market is gonna continue to hold. There's no doubt that that is being used as assets, as a preservation of wealth or purchasing power. There's no question there. But I do think the challenge within that market is gonna be that people are holding. Because they're holding, there's gonna be less inventory coming out.
TJ O'Connor:And you're gonna see a continued drive upward on the price direction for these premium and rare coins.
Tyler O'Connor:So what does come out? There's gonna be a lot more attention on that and I think we can see a lot more battling in those prices being driven up a bit more. So it's gonna make for really interesting gear on all aspects of what's coming, Because we really don't know and there's a lot of fear in the market, especially on the bullion side and then on the Vester side. But I really I'm seeing a lot of hope for the numismatic side and I think you can speak to that a little bit, because you were just talking a little while ago about the number of new collectors you're still seeing yeah, there's.
TJ O'Connor:A lot of people are being introduced to coin collecting, whether it be through being brought to the idea that gold and silver have a value that sits beyond being pretty and shiny, and then further learning about coins that have precious metals backing, and then basically understanding that there's rarity and collectability within coins themselves, and then all of a sudden a whole new world kind of opens up to them. But I think just the all around attention that's being given to precious metals, similar to, like you were saying, with the premium side as an investment, as a hedge right for people I think that that's gonna continue with bullion too as we move into 2024. Obviously, we've talked about the fact that the debt needs to be approached here coming up in a couple of months, and we have Speaking of the debt, didn't you?
TJ O'Connor:just say yes, yes, today we crossed 34.
Tyler O'Connor:That is correct. Brillian dollars in debt as a country.
TJ O'Connor:Today we're crossing 34 trillion, and that is not taking care of the unfunded liabilities that also sit around our books. Folks, it does not look pretty. And if the countries that unified under BRICS, which is Brazil, russia, india, china and South Africa, and now they've added six more, that's about it. Maybe, right, saudi Arabia just came into play. They are now effective as of January 1st and, as the date of this recording, this is January 2nd, so that was yesterday.
TJ O'Connor:I'm very curious to see how things are going to play out and I feel like every step that we move in these directions that are put in front of us, it's going to bring a bit more concern to the regular consumer and I think that those have been the main motivators for people to reallocate funds or adjust their portfolios and what assets they hold. So basically, I think we're in, we're getting prepared for a bit of fear to come into the market to help drive that and, at the same time, constricting the cash flow of the average consumer. So we may see that continued softening happen, as you suggested, on the mid and lower tier at numismatic side, but a flourishing happening on the ultra premium side for both bullion and the numismatic or rare coins.
Tyler O'Connor:And assuming that there are no more bank closures or collapses or any major financial turmoil I think we're still going to see that simply for the geopolitical and while our economy does recover, which is going to be a long road ahead.
TJ O'Connor:Yeah, well, speaking of a long road ahead, this is what confuses me, because I share the same sentiment, tyler. I'm thinking this is a long reparation here, but we have the Federal Reserve that has been taking a dovish approach or talking dovishly about what they're going to be doing with rates coming into 2024. They have a projection out there now that they're talking about seven rate cuts over the course of 2024 alone. That could simply send us right back to interest rates that we were prior to 2020, when all this mess started to unfold for us.
Tyler O'Connor:I mean don't get me wrong, I like the low interest rates, but I do think it's too hasty. They're taking an approach that will absolutely not fix the problem. Our problem is bigger than our interest rates. We need to solve our budget. We need to stop the excess spending. We need to get ourselves in line as a nation and get our finances in order. Otherwise, the American people are just going to continue to foot this bill that we can never pay, you know.
TJ O'Connor:I share your sentiment? Again I do and I think that any logical person would say, yeah, we need to fix and approach this thing. But I don't believe that logic is the driving factor here for our government's decisions and I think that likely, if that were ever to occur, it would be a hand that is forced.
Tyler O'Connor:So if we're talking, forced by collapse because they don't have any other choice.
TJ O'Connor:No, no, no no, I would never incite a potential collapse, nor do I think truly that that would happen. But what I am insinuating is that other countries may state that they are no longer desiring our debt backed currency for goods or services. And if we are held to the grindstone and some type of event happens where there's ships at the port with goods to deliver and they say you know what, I'm not interested in your dollar, but I'll take your gold, we might have a reprioritization on the things that we transact with here in the United States. So who knows what we'll bring that forward. That's what's part of what makes 2024 seems so exciting to me. Although it is scary on one hand, it's gonna be really excited to see the changes, whether they come forced or whether they come organically, how they'll unfold over 2024.
Tyler O'Connor:It'll definitely make for a very interesting ride.
TJ O'Connor:Absolutely Well. That wraps up today's episode for Numisphere, and I want to thank all of you for joining us here. Tyler, why don't you go ahead and lead on out and tell them how they can get ahold of us?
Tyler O'Connor:So thank you for joining us as we recapped our prosperous year here for 2023. You can always find us on Facebook and Instagram at Numisphere, or join us on YouTube at Numisphere Podcast.
TJ O'Connor:And remember, if you have any questions or topics that you'd like us to cover in future episodes, go ahead and drop us a comment below. Let us know.
Tyler O'Connor:Until next time, happy collecting and investing.
