Printing More Money vs. High Card Prices

[iwantitiwinit]

Originally Posted by MooseDog

Short answer to Leon... not directly. However the easy money is somewhat related as I do believe that the stock market is more likely tied to the rise in card prices. There are an awful lot of people in the US that make far, far more money and have far greater assets than they or their families will EVER be able to spend. Nobody NEEDS $1B, let alone hundreds of millions. At some point it's just a way to keep score and the whole concept of money as reality goes away.



Some with unlimited resources just want stuff and will outbid anyone else...well, because they can. And it only takes two to tango in an auction.

Imagine if Elon Musk and Jeff Bezos decided they wanted a certain high-end marquee card!

I also believe there is a certain level of "pump and dump" action going on.

My 2 cents.

FWIW I'm in the bottom 50% statistically, and got both stimulus payments of which 100% went to pay bills.

In my opinion this is 100pct accurate. It's not individuals getting stimulus checks, it's the new super wealthy that have significantly increased in number as a result of crypto price surge, the proliferation of spac issuance that instantly enriches the sponsor, real estate strength, etc. They are buying immense quantities of hard assets from the extremely rare to the limited quantity luxury items. Stories of individuals buying a ferrari dealership out of their entire inventory, super yacht shortages, low if non existent waterfront properties in prime locations. This will result in hyper inflation and will filter down into what was previously thought of as things that were considered available though somewhat limited in quantity to those making a decent living but were not wealthy. Things as simple as say lobsters (dont laugh), or BMWs, relatively fine wine etc. It is all going to be bought up.

[packs]

I haven't seen a very good explanation for why a person with no previous interest in cards would suddenly decide they needed a 1953 Topps Satchel Paige.

I really don't see why there is a POV that the uninitiated are driving up prices. A 52 mantle, a T206 Wagner, sure, those kinds of cards will appeal to the same layman that Picasso does to people who don't collect art.

What drives a guy to buy a 1950 Bowman Jackie Robinson?

[Johnny630]

Originally Posted by packs

I haven't seen a very good explanation for why a person with no previous interest in cards would suddenly decide they needed a 1953 Topps Satchel Paige.

I really don't see why there is a POV that the uninitiated are driving up prices. A 52 mantle, a T206 Wagner, sure, those kinds of cards will appeal to the same layman that Picasso does to people who don't collect art.

What drives a guy to buy a 1950 Bowman Jackie Robinson?

One Word MONEY

[packs]

Originally Posted by Johnny630

One Word MONEY

But that's not realistic. How would some everyman be driven to buy esoteric collector cards without being a collector?

There are no newly initiated people driving up the prices for many issues that have spiked. It doesn't make sense that they would look anywhere else but prime time for something they know nothing about.

If I'm getting into art, I'm not asking to see someone's Lucien Freud collection. I might have heard of Andy Warhol though.

[Directly]

Cash is trash!!

[bbcard1]

So here's what I'm wondering. If stocks, real estate, cybercurrency, metals, art and baseball cards are all overpriced, isn't it probable that cash is overvalued? The reason I'm not ready to buy into the concept whole cloth. The reason for that is we are not seeing wholesale price increases in staples. People have been sitting around with nothing to do so buying cards has been a fair enough diversion. Those who have not been hurt by COVID-19 haven't been spending money on some of the things like travel and, to a lesser degree, cars and clothes that we normally would. It's a mystifying time. I would think stocks would be the first to adjust, but what do I know.

[packs]

There are a lot of assumption being made that people even take vacations or go out to eat. Those are luxuries many people I know had to forego even before the pandemic.

[TedWill1939]

IMO, I think the pandemic and a 40+ age group with monay to spend created a booming market. There are many factors to it but I think this is the foundation. I'm 45 and have a certain amount of comfort in my life that has allowed me to purchase cards I only dreamed of having during the card boom of the 80s. I'm sure there are tons of people in the same situation. The pandemic gave people the free time to explore and revisit old anew interests. I picked up skateboarding with my son after 20 yrs of not being on a board.

Enter the highrollers and speculators getting in on the frenzy and its anyones guess where this will go, a big inflated pissing contest that tanks or a lasting trend with stable highs and lows?

At this point I am thankful for what I have and defintely bummed that some cards I wanted are way way out of reach

[Fuddjcal]

Originally Posted by packs

I haven't seen a very good explanation for why a person with no previous interest in cards would suddenly decide they needed a 1953 Topps Satchel Paige.

I really don't see why there is a POV that the uninitiated are driving up prices. A 52 mantle, a T206 Wagner, sure, those kinds of cards will appeal to the same layman that Picasso does to people who don't collect art.

What drives a guy to buy a 1950 Bowman Jackie Robinson?

Because they "always liked Jackie" and they want to collect them all? Never a Bowman fan, but wanted this one in my collection. Not so much the trimmed leaf rookie or ugly 49.

I think many small business's, received gigantic PPP loans that you don't have to pay back. They were discharged pretty quickly and free $$$ to the wealthy, I hear.

[todeen]

Originally Posted by Fuddjcal

Because they "always liked Jackie" and they want to collect them all? Never a Bowman fan, but wanted this one in my collection. Not so much the trimmed leaf rookie or ugly 49.

I think many small business's, received gigantic PPP loans that you don't have to pay back. They were discharged pretty quickly and free $$$ to the wealthy, I hear.

I agree, Jackie Robinson has transcended the hobby. Someone wants an early card of Jackie, can't afford his late 40s cards, but can afford the 50 Bowman.

However, I understand what you meant, I just think you chose the wrong name. Maybe you meant Warren Spahn, or Gaylord Perry, or Bob Feller......

Sent from my SAMSUNG-SM-G930A using Tapatalk

[sportscardpete]

$600 Stimulus checks are not causing Jordan rookies to go from $20,000 to $700,000.

[packs]

I can only speak for myself but the two checks I got didn’t cover one months rent combined.

[UKCardGuy]

The short answer is that yes, in general "printing money" drives inflation. It's not related to the stimulus checks but to the money supply. Here's a very simple illustration.

Imagine an economy with just 2 people, a can of BBQ beans and $100. In this economy a person has to spend all their money every day. One person starts with $100 and the other person starts with the can of beans. Because there's only one product, the price of that can of beans is $100. Now if we print another $100 and leave just the one can of beans. So there's still one can of beans and $200 available to be spend each day. The price of the can of beans is now $200.

I know the illustration isn't perfect. It's a ridiculously simple example, to show the effect that printing money has on inflation. Most goods are replaceable (e.g. food, clothes, etc. etc.). More corn will grow and more clothes will be made. So long as there aren't major shortages, prices might rise with demand but nothing outrageous.

For assets that are in limited supply like real estate, art and vintage baseball cards things work differently. The supply of these assets is limited. When more money is slushing around the system, some people choose to save that money...but others choose to spend it. A small number of people jumping into a an asset can make a big difference. That's where printing money drives asset prices (e.g. bubbles). It's not the only way that an asset bubble can happen, but it is one way.

People assess the value of assets in relation to other assets. That also helps to increase demand. "John's house just sold for $500K but the house that I want to buy is bigger. I'm willing to pay $700K for it." or "Geez, that 2010 Trout Refractor just sold for $500K. A T206 Cobb should be worth more than that". This further increases the demand and creates a sense of normalcy in people's minds that the prices are justifiable.

Asset bubbles aren't new. Bubbles tend to pop when there's a shock that changes the economic balance. In 2009, it mortgage defaults started to increase and banks stopped lending. It was the plentiful, cheap loans that helped drive the bubble. When the banks stopped lending, the bubble burst.



What'll change this time around? Will the Fed stop printing money? Will interest rates start to rise? Will someone find a warehouse full of "one of a kind" Mike Trout Refractors? Will a new MLB doping scandal cause the bottom to fall out of the modern card market? Take your pick and make your bets.

[Oscar_Stanage]

people invested in crypto and/or high growth stocks have gotten rich.
paper profits make you feel rich.

those are the people pushing up prices because they are indifferent to paying an extra $10k for a card

[bdk1976]

Originally Posted by sportscardpete

$600 Stimulus checks are not causing Jordan rookies to go from $20,000 to $700,000.

Then what do you think is? It certainly isn't due to Jordan putting up 50 against the Knicks last night.

The rich have cash to burn so they are parking it in collectables - other hobbies - such as muscle car prices - have went insane during this time period as well. The poor are spending the cash as soon as they get it on necessities - but guess who own/sells the necessities? The rich guys!

Personally I suspect there may be tax 'benefits' to holding something small and easily/anonymously exchanged as sports cards in some of these situations as well.

[packs]

Originally Posted by bdk1976

Then what do you think is? It certainly isn't due to Jordan putting up 50 against the Knicks last night.

The rich have cash to burn so they are parking it in collectables - other hobbies - such as muscle car prices - have went insane during this time period as well. The poor are spending the cash as soon as they get it on necessities - but guess who own/sells the necessities? The rich guys!

Personally I suspect there may be tax 'benefits' to holding something small and easily/anonymously exchanged as sports cards in some of these situations as well.

I think the reason the card spiked is because it's been fueled by faux sales, like a lot of cards have. Seller X doesn't actually sell the card, but it looks like it "sold" for a huge price tag. Someone on this board makes a post along the lines of "how did X get this much for this card?". I see that post and sell my similar card expecting that price as a benchmark. Other people see the faux sale and think that it's a real sale too, so if they get my card for the same or similar price they think they've gotten a deal and I'm happy with all the money I got.

But the card that raised the price point for mine didn't actually sell to anybody. Now seller X seems to have a never ending supply of the same card that all hit the block after the benchmark is set.

[rats60]

Originally Posted by iwantitiwinit

In my opinion this is 100pct accurate. It's not individuals getting stimulus checks, it's the new super wealthy that have significantly increased in number as a result of crypto price surge, the proliferation of spac issuance that instantly enriches the sponsor, real estate strength, etc. They are buying immense quantities of hard assets from the extremely rare to the limited quantity luxury items. Stories of individuals buying a ferrari dealership out of their entire inventory, super yacht shortages, low if non existent waterfront properties in prime locations. This will result in hyper inflation and will filter down into what was previously thought of as things that were considered available though somewhat limited in quantity to those making a decent living but were not wealthy. Things as simple as say lobsters (dont laugh), or BMWs, relatively fine wine etc. It is all going to be bought up.

Why can't it be both?