On the classic TV show The Rifleman, the stoic rancher and his son lived in the Old West. In one episode, the young son talks of his imagined future including, “…a world where machines take the place of horses.” The doubting but amused father responds skeptically, “Machines to take the place of horses? Really?” His son then concedes, “Well, I guess not”....
Similarly, on an episode of the show Little House On The Prairie, a group of disgruntled town residents in the 1880s, wait their turn to protest substantially increased property tax bills to the local assessor. While waiting, one complains he has heard, “…the government may even start taxing what we earn!” Another in the crowd responds, “An income tax? It’ll never happen!” The irony is evident. (The income tax as we know it today didn’t start until 1913 with the passage of the 16th Amendment.)
Fast forward to today. An article in a recent financial publication suggested we might become a “cashless society” as soon as 2050. That’s probably an accelerated estimate but, sometime down the road, I wouldn’t rule it out.
One might think the use of coins would be a long-term constant. However, with inflation continuing year-after-year, credit cards are now used for everything from bottles of pop dispensed from machines to parking meters. Of course, trends can be reversed. Not long ago, people with smart phones that contained clocks confidently predicted the demise of wristwatches. A mere decade later, Apple introduced the iWatch. Today, those same naysayers can’t live without one worn on their wrist.
These developments have posed the question about the future of collecting coins, currency, stamps or any such traditional pastime. After all, if they become antiquated, who will want to spend their time or money collecting them?
The answer is: loads of people.
A good example comes from the country of Zimbabwe, land-locked in southern Africa. As inflation goes, they take the prize for currency that tried to keep up. A few years ago, their inflation rate topped 24,000 percent per year. Consequently, their currency was devalued so substantially, in 2008, they issued currency notes as large as one trillion dollars each. That’s a one followed by 14 zeros. Once the notes began circulating, hobbyists loved snapping them up for their collections.
Such notes are nothing new. In hyper-inflationary Germany in 1923, the exchange rate was one trillion German Marks to one US dollar. As has been pointed out before, a wheelbarrow filled with that money wouldn’t even buy a newspaper. Banknotes in the billions of Marks were commonplace. That extended to the stamps used at that time. Surviving German stamps and banknotes with such stratospheric denominations can be valuable and are still eagerly collected.
Here in the US, between 1800 and 1865, scads of aspiring financiers opened their own banks throughout the eastern region. At that time, there was virtually no paper money issued by the Federal government. As a result, those small, private banks produced their own currency. The banknotes looked great with impressive scrollwork and patriotic images. Attractive as they might have been, disaster would soon follow.
Many of those banks struggled. Most, in fact, failed and went broke. But, not before stacks of their paper currency had been distributed and accepted by unknowing individuals. Because there was no telephone, Internet or quick communication to advise people who accepted the notes that they were worthless, merchants were left holding the bag. But, wait! Those old worthless “broken banknotes” are now popular among collectors. Some of that paper money now brings far more than the original face value.
If there’s still any doubt as to antiquated items increasing in value, just consider ancient coins. Some of those coins that, centuries ago, might have been worth only a small sack of wheat can now bring tens of thousands of dollars from collectors. And, to bring it completely full circle, look at the value of some of those wristwatches shunned a short time ago. Today, a vintage Rolex manufactured as recently as the early 1970’s can be worth well over $100,000.
The best advice is to never underestimate what people will pay now, or in the future, to collect and own. Remember, the future often seems like nonsense until it becomes the past.
For more collecting information and advice, log onto www.PRexford.com.