Perhaps the primary focus of anyone reading a newsletter such as the Currency Dealer Newsletter, or the Coin Dealer Newsletter, is to seek an answer to the rather basic question: “How is the market doing?” Assumed in this, but not so often spoken, is the real concern, that might generally be expressed on a quite personal level as, “What are my items actually really worth right now?”, or “What should I pay or sell for right now relative to a particular item under consideration?” What at first seems a quite simple and straightforward issue is actually somewhat more complex. Some items, those that are virtually pure commodities, with one the exact equivalent of the other – what we call fungible – will trade in a very narrow range at any given time. American Gold Eagle coins come to mind, as an example. Once one moves more into the area where items take their value on the basis of their collectability, value becomes far more subjective, even conceding agreement as to grade.

     Even rare currency items that approach commodity status tend to trade in a far wider range than real commodities, such a futures contract on a given quantity of soybeans. That is simply because subjective factors such as different potential purchasers’ determination of eye appeal, become just as important, perhaps even more so, than technical grade or the identity of the item under consideration. Generally, the more esoteric and more thinly traded an item is, the greater the tendency for its “value” to be more of a range, sometimes a quite wide range at any given point in time. In addition, such factors as the economic capabilities of the potential buyers can be far more a factor in a collectibles oriented market as compared to the market for an item that is closer to a commodity. Examine a significant currency auction catalog and prices realized, the Heritage Central States Signature Sale, for example, and it will not take particularly lengthy research to discover like described, even like third-party certified items of the same exact type and grade, selling for considerably different prices. The search for an exact answer to “What is it worth?” is one that should always be approached with the foregoing commentary in mind.

LARGE SIZE TYPE NOTES
     Large Size Type Notes continue to recover and stabilize. Whereas at its weakest point after the mid to late 2008 price break, the rarest of the rare six-figure items seemed to hardly ever reach seller reserves at auction, there is a definite trend in the opposite direction now. Indeed, prices for items that, while not really “rare”, but are nonetheless “quite scarce”, seem to be continuing a trend of slow and steady recovery. Indeed, prices for exceptionally high quality material, items with a PCGS or PMG certification of “67” or higher, would seem to have at least partially recovered sooner than most observers might have anticipated. Large Size Type Notes continue to enjoy the broadest demand of any of the collecting specialty areas. As such, it remains the most liquid and the easiest to sell at a reasonably predictable value at any given point in time.

SMALL SIZE TYPE NOTES
     Small Size Type Notes, while certainly not as robust as 1½-2 years ago, displays some of the same partial recovery patterns as the Large Size Type Note area. Indeed, since it was never the focus of such intense price speculation as the Large Size Type area, in many instances, price declines here were not as serious as exhibited by Large Size Type Notes. Like Large Size Type, especially when material is represented as being some degree of Uncirculated, PCGS or PMG certification has become a near necessity. Quite simply, a larger and larger percentage of the buying public insists on that additional degree of assurance, even sometimes for Notes of a surprisingly modest price level. The equation has moved beyond considering whether such third-party certification adds sufficient additional value to justify the expenditure, to the even more basic question as to whether the uncertified item will be saleable at all.

FRACTIONAL CURRENCY
     Fractional Currency remains the most thinly traded of the specialty areas reported here. As a consequence, it is perhaps the least liquid, i.e. the most difficult to convert to spending money at a reasonably predictable level. Market thinness can often contribute to an item being unsaleable at a given point in time for no reason in any way connected to any inherent vice that might afflict that item. There may simply be no buyer. Such a market structure can present significant buying opportunities for those with patience willing to wait for a broadening of demand in this area. By definition, in a thin market, the entry of just a few new buyers with deep pockets can have a dramatically uplifting effect on prices.

NATIONAL BANK NOTES
     National Bank Notes continue to display a pattern of geographically related collectability. Rare Notes from an in demand state can sell for astonishingly high prices, while material of equal rarity from a state with less demand can sell for apparent bargain levels, if they sell at all. Third-party certification has made far weaker inroads here, since value is more dependent on place of origin and rarity than condition. The exception to this observation remains those issues that exist in some quantity and are much more often encountered in Uncirculated condition, so called “hoard” Notes, where value really does depend on condition rather than rarity.

MISCELLANEOUS
     Obsolete Notes continue to grow in popularity. Despite price advances in the wake of the Schingoethe Collection offerings by the former R.M. Smythe & Co., the consensus of buyers seems to be that there is superior value to be had here. Collectors holding for the long term, as opposed to price speculators purchasing in the expectation of cashing in after a quick market spurt, continue to broaden the base of support here.

Reprinted from the No. 5 MAY 2010 issue of the Currency Dealer Newsletter "the Greensheet"
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