"Recession!"

That's the hot topic in the news these days. Some economists say we're in one, some say we're just close.

I often get asked what the coin market in general does when stock prices go higher or lower, when interest rates are high or low, and what coins do when the economy is good or bad, for example.

The most important thing to keep in mind is that there are no rules.

I am not an economist, but speaking as a numismatist I can point out what's happened to the coin market during modern times.

We used to see coin prices rise and then plateau, rise again and plateau again. However, in early 1980 after gold hit the then record high of $850 most "investment grade" coins, namely Mint State 65 pieces, continued to rise and then promptly proceeded to fall by about 50 percent, beginning around income tax time in early April that year.

Prior to that time dealers reaped huge, easy profits from buying and selling bullion products during 1979 and early 1980 and they plowed these profits into what they knew – rare coins.

This is similar to what we've seen during recent years in the housing market – builders put their profits into apartments and commercial buildings, because that's what they know. Now many of them are having a tough time of it.

However, in today's coin market many dealers are heavy on cash and low on inventory. This is because the coins they'd like to own have been picked over and are in collectors' hands rather than floating around coin shows and auctions.

In observing what's going on in the coin market and in talking with dealers and collectors, the anecdotal indicators show that today's coin market is sound.

Demand in general is still very strong and coins on want lists and sought to satisfy many dealers' appetites are difficult to locate.

Some people think gold should be priced, not near $900 per ounce, like it is now, but around $2,000 per ounce, when adjusted for inflation.

That's probably the only rule that is constant – rare coins and precious metals' prices do well during times of inflation.

Other than that, there are no "rules" as to how the coin market is affected by the general economy.