Thursday, April 18, 2013

Will Canada's lack of a penny spur coin collections?

I have a sizable collection of coins in my closet.

Most of it is Canadian silver dollars, about a hundred of them.

Now the reason why silver dollars are so valuable is two-fold...

#1. They're very rare.

#2. Silver is very valuable these days.

And as a bonus, depending on the age of the coins, they can be worth even more because of their age.

However if I was to sell my coin collection, I am not sure how much I would get for them.

If I check various websites online their value (depending on the coin) varies between $10 to $25 per coin.

And if I check the price of silver online it is currently hovering around $23.50 per ounce... which means I might get better value for my silver if I took it to a "cash-4-gold" place which also buys silver.

But what about the rest of my coin collection?

Well there are websites which specialize in coins online auctions whereby I could sell each coin (or a set of coins) to prospective buyers in much the same way people sell things on eBay. So it is possible I could sell my collection that way. Or expand my collection if I felt the desire to do so.

In Canada the Canadian mint has also decided to get rid of pennies as part of the national currency. All pennies currently in circulation are slowly disappearing, either being gobbled up by banks and resold back to the government, or being set aside by people who think the pennies might be worth something eventually someday.

Well, its partially true. The old pennies (the older the better) will certainly be worth something. But any pennies made during the 1970s, 1980s or more recently are basically worthless. Only the pennies dating from 1960s or earlier will be worthy of any true value for collections. (Unless they have a printing error on it.)

I do think however that this shedding of pennies may cause more young people to take an interest in coin collecting. In 50 years coins may disappear completely out of circulation and everyone will be using "change cards", which works a bit like a credit card or debit card, except its only good for small purchases.

These change cards are also being referred to as "Value Cards", but basically it will result in people becoming more dependent on credit and debit cards - and more dependent on bank accounts.

It is even a scary prospect to some people, because such prepaid "Value Cards" signals an economy even more dependent on credit - credit which has become an Achilles Heel to the USA's economy in the past, and will no doubt be the source of future problems as government overspending in many countries and household debts continue to skyrocket.

As of April 18th 2013 Canada's National Debt is now $609.6 billion.

Of which each Canadian's personal share is roughly $17,400.

Canada's consumer credit debt reached $477 billion in December of 2012 and continues to grow. Divided evenly between Canada's population of 35 million that means the average Canadian has approx. $13,600 in credit debt.

Taken together that means the average Canadian owes $31,000 just in government and credit debt.

The lion's share of which is government idiocy, followed by mortgages, and then credit cards / lines of credit, car loans, personal loans, etc.

And now back to the issue of coins.

If someone were to sell off a coin collection, how much of their personal debt could they get rid of? Probably not a lot. Most people don't have coin collections laying around worth thousands of dollars. I would wager my old coin collection is worth less than $2,000 altogether.

But if anyone out there wanted to make me an offer to buy my coin collection for $1800 (or a better offer) I'd probably snap my heels and shake their hand. They're just collecting dust in the closet anyway.

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