Collectibles Markets vs Economy - Why does it have to be this way?
 

As we all know, we are well into year two now of insane price increases worldwide as never before seen inflation rates continue to soar. Every single thing from restaurant food to supermarket groceries (meats/dairy/grains/fruits/vegetables/paper goods) to every single item in retail stores (Walmart/Target/etc) to new and used vehicle prices to gas prices and on and on and on. Everything up roughly 30-40% from early 2022 prices. Of course, the supermarkets, retail stores, oil companies, etc. are not eating the losses as their expenses continued to increase, the cost just continues to be passed on to the end consumer to absorb everything.

At the same time, just about everything in every collectibles market that I am familiar with (sports cards, non-sports cards, comic books, vintage toys, etc) continues to see prices drop and drop across the board. If you rely on income from these sources to live on, it doesn’t take a genius to figure out that this is a recipe for disaster of epic proportions.

Why does the public have to just sit back and continue to tolerate price increases of everything and just keep paying up? Collectors are certainly not doing that by any means. If our income was increasing at a similar rate, it would be sustainable but income is falling, going in the opposite direction. Can people stop buying long enough to force an economic correction as we hobbyists have seen all to well happening to us over the past couple of years?

Discretionary vs non-discretionary spending. Pretty simple.

When money is tight, people should be limiting spending across the board, shouldn’t matter.

Target inflation is 2%.

Monthly inflation has been between 3 and 4% for a few months.
http://www.usinflationcalculator.com...nflation-rates

Not ideal, but not disastrous either.

High interest rates are taking a toll and slowing the economy, possibly to recession. Hopefully, inflation gets under 3% soon and interest rates go back down to a sustainable level.

Until that happens, there may be more pain.

I think it is really difficult to compare collectibles to things like oil or other staples. People can't so easily reduce spending on food, fuel and basic services. But any normal person can easily cut back on their collectibles spending.

Gas, on average, is 40-45¢ less than one year ago. I have not noticed large increases on the prices of items I buy on a regular basis. Some items have even gone down. This is mainly groceries. Fortunately, I have 13 grocery stores (including Target and Walmart) within a 3 mile radius. It makes it easy to keep track of prices. I mainly shop at Aldi (1 mile away) and Target (across the street) with a few items from Lidl, Giant and Wegman's. The one place I have noticed the increase is restaurants, sit down and fast casual.

Phil--what are you talking about? EVERYTHING is up roughly 30-40% from 2022? I believe that US inflation peaked at roughly 9% and now is in the 4% range. What are you seeing that is up 40% in the last year?

Prices are way up for a lot of goods sold. Much higher than the reported inflation numbers. The CPI is not nearly as useful of a metric as it was before they redid the formula however many years back, IMO. I know it's only up 8% or so per the dept of labor, but the price increases I've seen in my day to day life dwarf those figures. I think most people would say the same.

"as never before seen inflation rates continue to soar".

I assume you are under 60.

Collectable prices soared in advance of the recent surge in inflation; whatever weakness in collectable prices you are observing now is hardly surprising despite the coincidental strength of inflation rates for other items.

I agree. That 8% government figure is laughable. The true % most folks are feeling is probably 2x-4x.

Saw a bit from a comedian about how a local news station was interviewing a guy who was talking about how terrible the economy is while he was on his front lawn installing a 30 foot skeleton he had just purchased from Home Depot for $900.

Same people complaining about cost of gas going up 4 cents will have $2000 worth of Halloween decorations on their house.

When I was young most families had 1 car. Today it seems most of my friends everyone in the family over 18 has to have their own car. And many of them are BMWs. There are people legitimately hurting and there are people with absurd expectations as to what they are somehow entitled to.

In my opinion, anyone who has any money leftover for collectibles (or ridiculous Halloween decorations) is doing all right. A lot of people are just spoiled--including by years of zero inflation.

Ground beef was $7.99 two years ago, now $11.99. Bag of chips was $3.49 two years ago, today $5.29. 2L bottle of Coke was $2.75 two years ago, today $3.75. Box of cereal was $4.99, today $6.79. I could keep going on and on and on. EVERYTHING is indeed up 30-40% over the past two years. Where in history have we seen price increases at this rate? Of course, let's blame it all on COVID like everything else. While sports cards are average DOWN 30-40% over the past two years. At the start of 2021, gas was $1.99/gal., been over $3.00/gl. since the start of 2022.

I imagine cigarettes' and other tobacco products have increased in price, but folks keep buying ! ( I'm guessing 5.95 a pack for premium? (2 packs/day x 365 days = around $4,000 a year). Yeah, money up in smoke.

I guess you are not a history buff.

Annual inflation was almost 10% during the start of WW2, and over 10% at the start of the Cold War a few years later. Inflation was over 12% in 1974 and over 13% in 1979. The highest annual inflation we have seen in the last few years was 7% in 2021.

https://www.investopedia.com/inflati...y-year-7253832

I can't add anything to this conversation without someone making it political. So I won't say anything. However, something HAS to change.

This economy was caused by the self-inflicted pain caused by this inept president and his administration the people voted for. Sure, there were supply issues due to covid but that was now 2 years ago. And even some of that was self-inflicted by keeping ships out of harbor in NY, LA and Baltimore...that's why prices increased because people aren't quite sure when the shoe will drop us straight into a recession/depression...or a war...

Yay, politics on Net54! Everyone's favorite subject. Not.

Speaking personally, I do cut spending across the board when money is tight. I cut the old cardboard budget much more deeply I do the food/clothing/shelter budgets though. I suspect that's true for most people. If things get really tough, I can cut the card budget entirely. Not really an option with food.

The economy worldwide is a mess for a variety of reasons and the US’s problems would be the envy of most of Europe and the world. But sure it was caused by one guy and some boats.

No politics please.

On the subject of price increases, look no further than WalMart gallon water. It's up about 65% over the last year or two. It was .80 and now it's $1.34.....Small item but indicative of the economy. I never understood where some were saying things were going up less than 10%. It seems everything has gone up a lot further than that.

and a card for the thread...

https://luckeycards.com/cobborange.jpg

I'm not an economist, but it might be worth trying to distinguish between the effects of inflation and straight-up price gouging. It seems to me that for food (and water jugs), companies keep raising prices knowing that people have to eat (and drink). And few people in this country grow/raise enough food on their own to be able to sidestep that.

OP: Wrong! The explanation is simple: interest rates and market increases. Why would I speculate on stuff like cards with my investment money when the market already had its bull run and the Fed has kindly raised rates to the point where I can park my card money at 5% and wait for the capitulation sale by desperate people who went all in on cards at sky high prices and now are panicking. There’s probably more fluff to punch out of the postwar market. Vintage not so much given the relative scarcity of many sets.

Lots of money is sitting on the sidelines waiting.

Most people have no idea what the real numbers are or a clear concept on how to calculate them.

How much did you spend on consumer goods the first half of 2022? How much for the first half of this year? I doubt it has changed much. (I also doubt you have changed your spending habits in any meaningful way.)

Sent from my SM-S906U using Tapatalk

True. Why would anybody speculate with investment money anyway.

Sent from my SM-S906U using Tapatalk

No comment or political objective here. I just want to point out that everyone around the world is experiencing inflation and the US is actually doing better than most countries. The picture below is one of many out there showing global inflation.

I understand that inflation rates may not always reflect actual price increases - inflation may be 4% (since last year) but the cost of dog food could be up 40% (since last year). But I am willing to bet that actual price increases are higher in countries with high inflation than lower inflation.

Again, we are lucky to live in this country for many reasons, one of which is that we are likely feeling it less than most other countries.

Yeah, no
 

For the OP, I think your starting point is off when it comes to your analysis of price increases, particularly on cardboard.

Compared to 2019, most vintage baseball cardboard (ie the stuff most of us collect) is up at least 100%, and in some cases more like 200-300% or more. Cardboard price increases for vintage baseball over the last 3-4 years are sooooooooo much greater than inflation on everything else. And it’s not even close.

To respond to your question about why it has to be this way, while economists love to debate what drives inflation, I’m a big believer in M2 - when the supply of money goes up without a corresponding shift in the number of available goods, then prices will rise. And to avoid politics behind why M2 increased, I’ll leave it at that.

That is what scares me. People are still spending, but are they spending with their savings or are they spending on credit? The later concerns me.

Phil--you need to learn that words have meanings. When you say EVERYTHING is up at least 30-40% over the last year it means that there is nothing that is not up at least 30-40% over the last year. The average US gasoline price is $3.47, down from $3.90 a year ago. Latest Kelly Blue book figures put new car prices up 4.8% over the last year. Clothing prices as of June were up 5.2% vs the prior year. Rental prices in the Los Angeles area have increased 10% over the last year. While there may be a few things that have shown more substantial price increases these numbers are in line with the government figures. Again, EVERYTHING means EVERYTHING; what you said is just plain wrong.

WOW those are crazy high prices. They run about half that in my location. 85% ground beef is $4.49. Doritos, Cheetos, and the like are $3.99 and the cheap brands are usually 2 for $5. Kellogg's brand cereals are $3 to $4.

Here Marlboro are $9 and cheapies are $6 a pack. Several of my friends that smoke bought a cigarette maker. It basically just puts the tobacco into a paper tube with the filter already in it. They spend a little under a $1 per pack that way.

My thinking, which is often flawed, is that I have a few key and desirable cards on my want list, however they are relatively plentiful (think low to mid grade 1948 Musial). There are always at least ten available for sale on ebay, any decent show you walk into will have a few. As they are relatively plentiful, these would seem to be good candidates to moderate in pricing, or so I would think. Time will tell.

I don't think it makes sense to compare the US to European countries that were much more impacted by the Russian invasion of Ukraine - their energy prices went up much more than ours due to natural gas being a more localized market, they also have increased demand from large numbers of refugees, etc.

Why is inflation where it is since 2021 as compared to 2020 and for a decade earlier? I’ll answer, in a nutshell, COVID. Production of automobile computerized chips in short supply over the past 3 years, why? Again, I’ll answer, because of COVID. Now, that COVID is under much better control than it was in 2020, factory workers are not getting sick, dying, quitting, my guess is that production is back to pre-COVID levels “per worker”. So, why haven’t car prices gone back to pre-2020 levels? Again, I’ll answer, because the American public has shown the willingness to pay 30-40% more for new cars. Do you think automobile dealerships are EVER going to be willing to bring prices back to pre-2020 levels? Absolutely not, if they don’t have to. If money is so tight, again, spending should be cut across the board, including new cars.

Exact same thing applies with shortages of poultry, beef, etc. during the peak COVID time. Supply is back to normal for quite a long time now. Has the price of meats come down at all since then? Absolutely not, and won’t until the end consumer cuts spending here too. If Shop Rite has gotten used to charging $12 for 4 burgers worth of ground beef, why go back to charging $7?

All totally unacceptable!!!

In 2018 the average new car price in the US was about $37,500. Today, the average new car price is about $49,500. That is an increase of under 6% per annum.

I’m going to disagree with you here. At least in terms of the virus being the primary driver. It happened during COVID, but there was a lot of other action going on at the time that was a bigger factor in driving inflation. Now that the pandemic is over, many of those other same conditions endure, albeit with a lower impact today than a couple of years ago, but which continue to drive up prices.

Hate to burst your bubble, but prices on groceries are not going back to 2019 levels. The best we can hope for is the rate of increases continues to slow.

But if you want to organize a boycott against groceries until they lower the prices, then I wish you the best of luck with that.

"Retail ground beef prices were at $5.08/lb. in August, down 2 cents from the month prior and up 14 cents from the same time last year. Retail ground beef prices have averaged $4.92 so far in 2023.

Retail ground beef prices averaged $4.81 in 2022, the highest annual average on record. Retail ground beef prices averaged $4.26 in 2021, up 14 cents from 2020. This is the highest annual average on record. Retail ground beef prices averaged $4.12 in 2020, up 31 cents from 2019.

Retail ground beef prices reached $4 for the first time in history in August 2014."

The above means that over the last 9 years retail ground beef prices are up 25%, or a little over 2% per annum.

While I would find a country-wide strike to protest the insane cost of living extremely satisfying and exciting, I don't think there is anything the country will ever agree to do together. Even on the smallest possible scale.

I think there are a lot of very long term things finally showing their effects.

For decades, as a nation we've insisted on lower prices, and have been willing to sacrifice service and quality to get those lower prices. And that's in nearly everything.
Along with that has been an ever increasing demand for
A) More profits for those of us that can invest in stocks or property
b) Higher wages, especially at the lower end if the scale.

None of that is bad in itself, minimum wage was kept artificially low for far too long. Maybe not $15, but for sure more than 7. *
Post pandemic, the kob market made that more than a bit of a joke, the local McDonalds was paying 18 for night shift, and 20 closer to Boston.

At the same time, the big box stores and online businesses delivering cheap stuff made overseas but with absolutely no service (Unless you count immediate delivery as "service" )had finally destroyed nearly all competition. Most small specialty stores are gone, as well as many larger chains. Sears had almost everything they needed to be Amazon and to be first. National stocking and distribution, national advertising ... all they lacked was a usable website, which they got far too late. (so much for CEOs not making a difference)
So now the places selling everything cheap and mostly without quality have no competition, small margins, so single store profit can be affected by essentially doubling everyones pay. Leading to finding ways to cut labor costs. Like self checkout. Leading to higher theft, no surprise. meaning higher costs.

Fewer ways to cut costs, and no competition means prices are sure to increase.
Add that many places had increases, but never rolled back when costs dropped because why would they? and we get what we've got now.
The grocery store I go to has gotten a little more expensive. Not like many claim, but more expensive. The biggest difference I see is that many things still have variable availability. My kids like mini wheels pasta, and I haven't even seen it there in several months. Some other favorites, have also either vanished or only turned up occasionally. Some things like Entemans coffe cakes have gotten expensive, but the in store bakery items are much less.
Eggs are strange, I saw many people complaining that they were $6 a dozen, but the ones I get stayed right around 3.50, 3.69 for the last few months. And that's with Mass not allowing anything but cage free. So the cheaper ones weren't around anymore. (I quit those years ago as the quality was poor. )

In the past, when things got difficult in the stock market, people looked to other things as hedges against inflation, like metals or more recently (Like 80's-90's ) collectibles. Stuff that while it's not needed, will hopefully continue to be wanted once things get good for business again.
Hopefully it's not too bad, but this one feels different. Despite the stock market doing reasonably well, down lately, but in general well over where it was before the drop in 2020, and inflation being a bit elevated, there doesn't seem to be a big rush to metals or collectibles.






*when the "fight for 15 was going on, realities of how much customers would pay for what I do pretty much capped what I could make at 15-20, and I have decades of experience. None of my friends believed that someone getting the same pay for whatever with no experience and no skills devalued my work. They all said "well you should get more too" until I told them that would put the price of a bicycle tuneup higher than any of them would pay.
Now a few are in the same boat - "why does the kid who messes up my McDonalds order make as much as I do" It's not fair
Why is everything so expensive? It's not fair!

Yeah, told you that 4 years ago.... It's fair, sort of, and predictable.

As a global nomad for the last 30+ years, the US has some of the worlds lowest inflation. Even in 2023, in some reports, it falls in the top 10 for countries with the lowest inflation. Always have to laugh when Americans complain about money. ;)

If you think inflation is hurting you, in many of these countries I have been in, a person with a bachelor degree and 10 years experience will get paid around $500-$700 a month. To rent a two bedroom condo, which is considered safe and liveable, can easily be $700+ a month. Middle class is generally both parents working, one car, and eating meat 3 days a week. Dont even get me started on gas prices.

There is a reason Barnum and Bailey's went out of business. US society took its place. :)

I buy a cow and hog this time of year every year and have for a long time.

I pay market price at the time of butcher. This is hanging weight per pound.
Year Hog Beef
2016 $1.10 $2.10
2017 $1.15 $2
2018 $1.10 $2
2019 $1.15 $2.05
2020 $1.15 $2.05
2021 $1.55 $2.40
2022 $1.70 $2.70
2023 $1.60 $3.45

I have noticed this with many items. The price stayed the same for a long time and then huge jumps. If you look back it has happened a few times with our economy.

I just took a look at online beef prices where I am at the moment (Philippines) and its around $5 USD per pound. Daily minimum wage is between $3 to $10 (Manila being the highest). Tomorrow is pay day for a team I used to manage here who had an average monthly salary of $400 USD, all with bachelors degrees and a range of experience. Your telling me Americans cant afford a pound of beef? :D

If you look into those numbers, there are many articles stating that people are now buying new vehicles with all of the bells and whistles which has driven up the price of an average new car compared to pre-Covid. Talk about entitlement. :D Buying cars they cant afford.

Some of us have smooth brains and very short memories. No inflation is ever as bad as the inflation we're experiencing right now. And the person responsible is either the current guy or the last guy, depending on perspectives that have nothing to do with economics.

Ok that's on me, my bad, was trying to toe the line but guess not.

One really needs to look at oil prices as oil is used to make virtually everything we use day to day and then ship it to its end destination. When it costs more to manufacture and ship, costs for end products are going to rise...

Society is built to continuously bleed you and works very hard against your upward mobility. In NYC I would point to the ever rising costs of Metrocards. the MTA will tell you they HAVE to raise prices to continue to offer service. However, if there ever was such a day that fares outpaced expenses, does anyone really believe they'd lower the fares?

In all honesty, I just dont see inflation that bad in the US compared to where I travel on a regular basis. I just see a massively entitled society who cant afford the lifestyle they feel they should have, which doesnt include most members on this board since the amount of discretionary income would be considered high compared to the rest of the crowd. Unfortunately, the US is a massively unhealthy, entitled society who overspends on complete junk. Also, and what I have seen, most people like to blame political appointees for their own problems instead of taking responsibility. The 2nd best decision I ever made was to never register to vote and remain politically neutral. The best decision I ever made was renouncing US citizenship.

Amazing analysis and insights here as always. Net54 truly makes me more informed.

Respectfully though, I think we’re asking the wrong question. For me, it’s about, ‘How do I and my family adapt to this new reality and use as a catalyst to come out in a better financial position, while also donating more to charity?’

Some ideas/actions: take on a consulting gig in my SME, sell unnecessary stuff, negotiate with my employer to work more days remote to save fuel costs (ROT=Return on Time), apply for and jump to a next level job, cut discretionary spending (mostly restaurants), pay off high interest loans and debt (Dave Ramsey style), invest more pretax dollars to my HSA to reduce health care spend I know is coming, ask for some holiday gifts to be a donation to my fav charity and also personally match that via my employer which also matches my donation, and on and on. When all bundled together these can really move the dial and free up some capital to weather the storm, or invest a small portion in more cardboard during a buyer’s market.

What does entitlement look like though? I believe I should be able to buy a house, afford to raise a child, and send that child to college. I don't believe I'm entitled for feeling that way. Those were attainable benchmarks for every other generation. But for people my age, these are now considered luxuries and many of us are passing on them.

That sounds like entitlement to me. That sounds like a great goal you need to work hard to achieve. In my 54 years of experience it was never an attainable benchmark for everyone.

I didn't mention anything about what I was doing to achieve my goal. Only that I had them and they don't seem outrageous or even that much different than society has ever had. However, they seem to be much harder to get.

The birthrate has fallen 23% in the last 15 years. The number of US households from 2010 to 2020 was the smallest gain in any decade between 1950 and 2010.

The idea that if you don't have what you want you aren't working hard enough is also outdated. This isn't a meritocracy and there's no such thing as working harder than everyone else to achieve more. I think it's much more likely that many people will work themselves to death and not gain very much in the process.