It’s Time To Do the Math
How can we best gauge the potential impact of
the Senate legislation? What would happen to rare coin
prices if the current bull market were exposed to an
additional $3.8 trillion in potential demand? Perhaps the
best way to determine the market’s reaction is by
comparison to the “Wall Street Invasion” of 1989.
In 1989, $50 million of new institutional money
was invested in rare coins by Kidder Peabody and Merrill
Lynch. The market responded by going up more than
100% in a very short period of time. Today, with IRA
assets at $3.8 trillion, how much would be invested in rare
coins? What impact would that investment have on prices?
Based on historical experience, only a small
fraction of the total assets of IRAs would be invested in
rare coins and other tangible assets. However, even if as
little as 1/10,000 of IRA funds were invested in legal
tender coinage, it would be more than seven times
asmuch as the institutional investment that
propelled the market upward by more than 100%
in 1989.
