This thread has gotten way off track. The topic is whether cardboard is a viable fledge to inflation.

I believe that it is, at least the time-tested, vintage stuff, from Cobb-Ruth to 1963 Pete Rose Rcs.

Cards Hedge to Inflation
 

I agree concerning the topic, Ryan.
I am not so sure about inflation when it comes to expensive cards. Is there inflation on a 1914 CJ Jackson in a 5 holder? Or is it more a collectibles increased value? And I don't know about others but if I pay 4 or 5 figures for a piece of paper I am not thinking about inflation.
That all said, sure, I guess cards can be a hedge to inflation. I prefer to think of them as increased or decreased value. I love collecting but I treat them as a cost basis, liquid asset.

Inflation bit this one hard as it sold for a lot less a half year earlier.
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And the national debt only increased by 5 trillion dollars.

With impending inflation, spurred by this massive infusion of newly created dollars, the interest we'll be paying on the pre-existing debt, plus the interest on this new 5 trillion debt, will be a hefty burden on our federal budget forever.

Or, until our currency collapses under the weight of all this reckless debt.

Yes I think cards are being used to hedge inflation.

I am easily one of the least educated/experienced persons on this forum, but it doesn't take a genius to see the American Dollar is becoming more and more worthless. Currency is changing, as crypto becomes more and more legitimate. Government is printing money at will, and the basic economic principles aren't there for a healthy economy. The number of "financial gurus" and big time investors coming into the hobby are not by coinkydink. I do believe there is an element of manipulation at play when it comes to modern at the very least, but I think most vintage and especially pre-war are pretty safe places to park money; tangible assets with a huge interest base and limited supply that will only increase in the tiniest of amounts, if at all.

As Kissinger famously said, the future has no constituency.

I for one think inflation will not be as bad as some have forecasted I say we peak mid q2 this year.

Scott,

See what Adam says in post #75, he's got some great comments and points that are right on the money. Also, I understand your concern about the government pumping more money into the system, but that itself isn't necessarily going to cause runaway inflation. Look back at what happened after 2008 when our economy tanked due to the mortgage crisis. One of the main things they did was to push more money into the system, remember they called it quantitative easing? It took a few years to get things back on track, but it never really pushed us into an inflationary period.

As Adam also mentioned, this current inflationary situation seems by to be fueled mostly by the supply side issues we've had. It will likely take some time before things hopefully start settling down from the effects of the pandemic, and the supply chains and returning workforces will eventually catch up to the current excess demand that exists, and also allow for reserves and backup inventory all throughout the production and building industries to return to their more normal, pre-pandemic levels. In the meantime, we've got the classic supply and demand formula working against us.

Look at cars and housing for example. Their production and building were crushed because of the pandemic, and so to were their suppliers unable to continue providing parts and materials to them at pre-pandemic levels. But fortunately, everyone involved in those industries had reserves and backup inventory to keep providing what the market needed and demanded. But they blew through the backlogs and reserve inventories they had, till the demand finally exceeded what could be provided. And then, the lack of sufficient numbers of new cars and homes carried over to the secondary used car and rental markets, which also got quickly overwhelmed. And that's why we've seen new and used cars prices go through the roof, along with housing values and rents. But since it took a while to reach that point where our demand so overwhelmed the supply (and started pushing up all the prices), I think a lot of people have mistakenly thought it was all this government stimulus spending that inflated the prices instead, because it seems to fit the timeline for these rising costs perfectly.

To tie this all into our beloved hobby, this is exactly what's happened with PSA. Demand jumped, overwhelmed processing, services got shut down to work on the backlogs and get caught up, while also trying to find and train additional graders to get the work done. In the meantime, grading fees skyrocket so PSA can stop the overwhelming influx of work, yet allow them enough income to get the backlog under control, pay to find and train these new graders so desperately needed, and also pay and finance whatever other expansions or improvements PSA needs to facilitate everyone and remain in business till they can get operations, and fees and services, back to be more like they once were. Even PSA knows they can't simply leave things as they recently were, without eventually damaging the core business,potentially beyond repair.

And this highlights another reason the government would possibly want to make it look like they were overpaying businesses with these forgiven PPP loans. So these businesses would have additional funds to address problems along the lines of what PSA faced, and maybe not have to result to shutting operations and services down, and then severely jacking prices up and making the inflationary effect even worse, instead of better. So this demonstrates at least one way these excess PPP loan monies that everyone's complaining about being handed out and becoming the cause of our current inflationary issues, may actually be working to prevent inflation in many of these businesses.

Now before you go calling me out and questioning my logic about how if PPP loans may be able to stop a business doing what PSA had to do, why didn't the PPP loan monies help PSA? I don't know enough about their finances and internal operations to be able to give anyone a definitive answer, but if I'm speculating........

First off, PSA's surge in demand for them could have just been so unexpectedly fast and huge that they were one of the rare outliers where almost no amount of extra stimulus loan money could have saved them from what they've had to go through. Secondly, don't forget when the pandemic started PSA was part of a larger publicly traded company, and therefore may not have even been eligible for a PPP loan to begin with. And lastly, even if they were eligible and got a PPP loan, they got sold right at the beginning of 2021, not long after they would have the PPP loan forgiven, but just before everything blew up for them. I know none of the financial details of the sale, but it is possible that cash from the PPP loan went out to the prior owners as part of the sale, or was otherwise tied up in the sale or the business to where it couldn't be used to help the business under the new ownership.

Not sure what you mean by businesses getting taxed at higher rates, none of these forgiven PPP loans are taxable.

That last point is correct--it made a really weird line item entry on my 2020 corporate return.

As for budget busting, the 2017 tax cut (made in the face of a deficit; funny how the so-called deficit hawks seem to go deaf, blind and dumb when they like the president who jacks up the deficit) skewed benefits to the richest population. If you're going to bitch out working people getting relief money during the pandemic at least be intellectually honest about all of the handouts to the richest 10% of the population over the preceding 50 years that increased asset and income inequality to levels not seen in 130 years. That section 199 deduction in 2017 was so dramatic in its impact on pass-through entities that the first year it was implemented I thought the CPA must have made an error calculating my taxes. I researched the law and found that the return was accurate, the law is just bizarre.

Oh, and back to the OP, not only is it an inflation hedge, look at the artwork:

https://photos.imageevent.com/exhibi...%20Collage.jpg
https://photos.imageevent.com/exhibi...0Gehringer.jpg

Tis a thing of beauty.

Thanks Ryan.

I have enjoyed the comments posted, but I we took a turn somewhere along the way....🤔

The original question: are cards a hedge against inflation can't really be answered without discussing economics, can it?

I will just say to Bob C and Adam, I disagree with most of what you say, but time will tell. "Jacking up the deficit" is not a big issue - it's how that deficit is financed. Inflation is primarily a monetary phenomenon, produced by a more rapid increase in the quantity of money than in output. It's caused by government - every time, and it's actually a sneaky way to pay down the debt without increasing taxes.

And this line: "all of the handouts to the richest 10% of the population over the preceding 50 years that increased asset and income inequality to levels not seen in 130 years." is pure political tripe that is simply false and very blatantly crosses the "no politics" line.

We can look back a year from now and see what happened. If the government attempts to curb inflation by reducing the quantity of money and raising interest rates we will see unemployment rise and slower growth, and I think card prices will probably be stagnant.

I think cards are a pretty good hedge against inflation. If they can just hold their value for the next two years, I'd feel pretty good.

I got this just from a member before things went off the rails. I love this card!

Attachment 496817

This is what makes sense above 👆

What seems to be telling to me with collectors is of recent that kind of has me concerned. If a card comes along say it’s $10,000 or more and a collector really liked the card and wants to purchase. What I have been finding over the last several months is the person that wants to purchase this card cannot purchase the card without trading or selling another card that they have, I feel they have a low level of liquidity where they’re not able to purchase the card with cash.

If they believe their cards are worth more than they are and the card market drops, or pulls back from ridiculous inflated numbers of 2021 they’re not going to be able to sell these cards for a perceived price they think they’re worth the power, They may have bought during the FOMO of last year. I believe the liquidity in assets other than cards In the next coming years will be more powerful than the sad cards. This is just me

I’m not a rich wall street or white-collar Six figure man those guys will always have the power to pay up in the auctions. I’m just a blue-collar guy and from what I’ve observed in the trenches from shows, Facebook, IP, and eBay is a lot of blue-collar guys have too much money tied up in cards and not enough in liquid assets.

Interesting views, cool topic. My take is that of a struggling collector as myself. Sports cards have a fiat value, measured in a falling fiat currency. Because I’ve no residual income or disposable income, i must do as most collectors do, and buy only what i’m willing to be buried with. If i had 100K to invest in the last few years or so, i’d most certainly have ‘invested’ in some rare high dollar vintage cards, but be super tempted to sell off quickly.

Even though i’m optimistic the card market will fall, i still believe there are many, many cards that i will never legally own. I have to be okay with that.

I remember what happened in the last card boom, and i hold several opinions on today’s card market. First, i believe the wealthy underwrite eachother’s investments.

Second, hardly any kid knows what kind of fish Mike Trout is, even fewer know what a Mickey Mantle is used for, and the only people that know what language you say Tris Speaker or Cy Young in, are likely reading this paragraph at this very moment. When we die with our cards, those kids will be adults, and i’m not willing to bet $10,000 on a piece of crap condition Jackie Robinson rookie, that ANY of our youths will give a rat’s behind what a Frojoy Babe Ruth is for….

Baseball cards: you can’t feed it to your family, they won’t keep you dry. They don’t transport you across town. They are not accepted as currency in any Costco or 711. They are poor self defense weapons. They are even worse for amphibious assaults on a food and ammo cache. You can’t use them to build a shelter, or a boat. In the end, if kept dry, are great for starting a small cooking fire.


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Lots of folks financing new boxes of panini treasures or whatever at 2k a pop, busting itnopen and hoping to pay off the credit card date and psa fees with the profits. I think that came to a grinding halt. I'd have to think a major deflation in modern would be coming. Goldin had 3 of those 'tom brady season ticket" cards. I realize its limited, but I dont see how rare or demand for a card like that Carries the insane premium. Even still, jordan fleer rcs in psa are thousands? Limitless supply, and demand is due to "them going up". Modern is going to end badly and will spill over into some vintage. I would hedge with cards, try commodities.

I have sold cards to help fund others many times. I feel they are very liquid.

Great points.

I especially agree with your last statement. Many collectors say, well, my card is worth x, so I should be fine. A card is only worth something when you sell, so until then, it holds no dollar value. And the fact is collectors always overvalue their cards, so they may be in for a rude awakening when they try to sell.

If that is your measuring stick, then stock (especially if manifested by a paper certificate) and debt/bonds, are a bad place to put money too. I assume you are spending all your excess cash of lighters and matches, lumber, bullets and military rations.... When shit hits the fan, and it just may (in all seriousness), you can tell me you told me so. Until then, here are Tris Speakers, you know, for the kids.....

Ryan, I'd say your Tris Speaker back run is nice, if it included a T215 card! :D

Not that you said it was but I don't look at any of these as absolutes. If cards are something you see as an investment, it's an asset class just like 401k, savings, IRA, real estate or what have you. You allocate your resources in those buckets as you see prudent.

Personally I view my PC as both a hobby and investment with a hobby lean and I'd guess I'm not alone. The difference between cards and "savings" to me is that I can hold a t206 Green Cobb but the more traditional investments are more of a number on a computer screen or statement. Neither are wrong but man it's way more fun holding the Cobb than the monthly statement....haha!!

agree w/all of this. My family isn't into cards but when we talk about the tobacco era of cards, they are absolutely into the discussion and enjoy looking at some of my PC stuff. Far different than if/when we talk about savings, crypto or anything like that as there's nothing really interesting to see.

I totally agree, and if it goes up in value, you got to own it, enjoy it, AND made a few bucks!

It IS hard, for me at least, staring at a box in the bank and thinking "this could be an (insert asset here) with the recent insane multiples.

Cards, like stocks, are only worth what someone is willing to pay for them. Card shows, online forums, marketplaces and auction houses are akin to the NYSE, NASDAQ, etc so I'd say there are enough venues to sell cards that they are quite a bit closer to stocks than others may think.

As for the "always overvalue their cards" comment, I actually use average sales for valuing my collection and taking a percentage of that (less than 100%) for an approximate value for any external need I have for that info. Maybe I'm the only person ever who has done it that way but I'd guess likely not.

A Beckett large slab could serve as a roof on a shelter and when thrown correctly could decapitate a soldier in full body armor.

LMAO!!!


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