5th National Silver Dollar Convention
St. Louis, Missouri
November 8 – 11, 1984
The Great Silver Dollar Mystery
By Michael De Falco
Is it true that today’s silver dollar market is based more on clever promotional and marketing schemes rather than on the legitimate law of supply and demand? Is it true that the MS-65 column on the Greysheet is in reality a price column for MS-67 silver dollars? Does it really take an MS-67 dollar to fetch MS-65 “bid?” The anti-silver dollar propagandists would like you to believe that, but they’re wrong again.
One of the most vocal anti-silver dollar propagandists said in his newsletter this past year, “I find it remarkable that in such a quiet market MS-65 dollars can keep bucking the trend and continually increase in value.”
It’s not really remarkable; in fact, it’s very easy to understand. The fact of the matter is the Morgan dollar is the most popular U.S. coin of all. It definitely enjoys the broadest and strongest collector/investor base of any coin or series of coins. It is one of the most liquid coins of all. “Real” MS-65 Morgan dollars (in most instances) are readily saleable at or near current Greysheet levels. For the most part they are very affordable and do have mass appeal. Millions of people love silver dollars, plain and simple. I find it hard to believe that Americans will abandon their love affair with these large and romantic silver coins. Consequently, as long as real demand continues to grow, prices will continue to rise much to the displeasure of the anti-silver dollar propagandists. Too bad, guys.
To further blow holes in the anti-silver dollar propaganda above I would like to discuss a few facts concerning the silver dollar market of the past. Contrary to the statement above, silver dollars have not continually increased in value. In a real market, nothing does. In early 1982, the silver dollar market experienced a downward correction in price; pull out your old Greysheets and see for yourself. Silver dollars don’t continually increase in price week after week ad infinitum. They are subject to periods of leveling and price adjustments just like any other series. However, silver dollars did not experience the severe downside corrections that wreaked havoc throughout much of the rare coin market following the “boom” of the 1979/1980. Then again silver dollars never experienced the kind of explosive growth associated with “boom” markets in the first place. Although silver dollars have performed quite admirably since that time, the market for them has never really “become overheated.” Quite the contrary, the silver dollar market has been characterized by a pattern of slow and steady growth. Does that sound like a manipulated market? To me it sounds like a sensible market based on real demand, not promotion.
Now on to the question of the Greysheet MS-65 silver dollar valuations. Does it take an MS-67 to fetch MS-65 “bid”? Does the MS-65 price column really represent a valuation for MS-67 coins? The anti-silver dollar propagandists believe that; even some major silver dollars dealers believe it. It was the suggestions of these very same dealers that the Greysheet should be petitioned to lower the MS-65 “bid” levels by about half. If these silver dollar dealers think that this should happen maybe the MS-65 “bid” prices are out of whack. After all, aren’t these people the real silver dollar experts? Let’s discuss it.
Many of these “so-called,” (or self-proclaimed), silver dollar experts are sitting with inventories “near” MS-65 dollars that are not saleable at current MS-65 “bid” prices. They’re frustrated. Consequently, they feel that this problem can best be resolved by a wholesale lowering of the MS-65 “bid” prices. Heck, if an MS-65 1880-S dollar isn’t saleable at the $200 level, maybe it will be at $100. Using this ridiculous logic, I think these people really believe that their inventories will magically become saleable again. They’re 100% wrong!
The problem doesn’t lie within the current price structure of the MS-65 silver dollar market. Quite to the contrary, it lies with their perception of what an MS-65 silver dollar is in the first place. Unfortunately, many of these “experts” have been unable to adapt to today’s strict grading standards that were set in force several years ago. As I’ve said so many times before, it takes quite a coin to make MS-65, and “close” just ain’t good enough.
Now, let’s assume that these “experts” were successful in their attempt to lower MS-65 “bid” prices. Will the grading standards loosen sufficiently to allow them to sell their “near” MS-65 at the new lower MS-65 “bid” prices? I don’t think so. For example, I would expect a $100 “MS-65” 1880-S dollar to be of exactly the same quality as a $200 “MS-65” 1880-S dollar. My perception of the MS-65 grade would not change one iota. I am not alone in this regard. Every truly knowledgeable silver dollar dealer, collector, and investor would feel exactly the same way. I just couldn’t picture Bruce Amspacher or Hannes Tulving eagerly purchasing “near” MS-65 1880-S silver dollars at full “bid” just because the price had been lowered to $100. It just won’t happen. The same very strict grading standards will prevail regardless of price!
So, to all of you “experts” who really believe that prices are the root of all your problems, I say think again. The inability or lack of desire on your part to change your grading standards is the real culprit, not price! In the final analysis, I would just like to say: grade your coins properly, price them accordingly, and you may be surprised to see just how fast they sell. Prices aren’t out of whack, you are. So learn to swim like a fish or sink like a rock.
As a final thought, I would like to share with you a comment that Dick Reed made to me at the Fourth National Silver Dollar Convention in Houston: “Most of the serious collectors and investors that walk through this coin show have a much better knowledge of grading than the majority of dealers in attendance.”
Dick is absolutely right. Today’s collector/investor has adapted quite well to the strict grading standards; after all, it’s his money and he wants to receive fair value for dollar spent. If only the average dealer were nearly as adaptable, complaints would be much less frequent. Think about that, gentlemen.