High Notes

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Time To Focus On Banknotes & A New Direction?

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Fenntucky Mike

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With gold continuing its ascent towards $1,800 I had pumped the breaks on any new gold purchases about six months ago, and came to a dead stop in late March. Having just sent in, what will likely be my last submission of gold coins for awhile I was thinking I should take this opportunity to focus more on my banknote collection/collecting goals. Now appears to be an opportune time for me, with an influx of modern Ukrainian banknotes (my current focus) hitting the market at relatively low prices, or at least at what I would consider a low cost for already graded notes ($30-$40). I'm also going to take this moment to go through my raw notes and purchase a few more, then put together my first submission to PMG, which I have been putting off due to my inexperience in judging the quality of a banknote. I think I've read, studied and observed enough graded notes to feel somewhat confident in my own grading skills. I should have a submission of around 12 notes ready to go by August, we'll see. Need to start working on some descriptions for the notes I already have, but that seams more like a winter endeavor. PMG World banknotes in high grades just seem to be plentiful right now and at reasonable prices, especially when compared to gold, or even a graded world silver bullion coin from one of the many popular series.

 

As I approach the mid way point of my Ukrainian sets I start to wonder what's next? I have a couple of Zimbabwe notes and I'll probably stay current on the new series that is currently being released (I have the $2 & $5 notes) and I really like the first series of Zimbabwe notes, P1 -12. As another member has already written, the first series notes have recently been readily available and in high grades. I've been keeping my eye on the first series notes but just haven't been able to pull the trigger on them, mainly because Ukrainian notes have been popping up like deer in my garden. I'm really looking for a country, state, province, etc. whose complete set of notes comprises 50 Pick #'s or less. I was considering Transnistria after a short article I read in Coin World about their latest commemorative note and was also considering Moldova, both of which lie in the former eastern bloc and border Ukraine. I think I'll just pickpocket a Zimbabwe note here or there (the new $10 & $20) while I'm trying to make up my mind over the next few months. Suggestions welcome.

Some of my latest acquisitions.

 335190449_Obverse-Small.JPG.ae45aeee8f256592afb240c7c74f6a23.JPG218488315_Reverse-Small.JPG.10bcbfd3728555e88edefc4102ea3c74.JPG

190065244_Obverse-Small.JPG.4740242d87599320867e80623194f002.JPG256666983_Reverse1-Small.jpg.a95445808d64c6c5f2aa0703a39a25c6.jpg

719671062_Obverse-Small.JPG.679d5ea31fd17c7f2c951fdfdd158db0.JPG1979710617_Reverse-Small.JPG.c3d8931a8acb386bf6678f53e2c5f4c9.JPG

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I bought several gold coins and bullion oz when gold was hovering around 1300-1400. I stopped when gold began to rise. With Covid, who knows which way gold will go but it is forming a long term double top which concerns me. If it breaks out above 1800 then I might reconsider but I tend to think we will correct back down to the 1500 level at which point I might pick up more. In the mean time, I believe in a longer term bull market for bank notes. With the lowering demand and perhaps ultimate usage of physical money, I believe that bank notes will continue to be the subject of collectors and investors. I know you are interested in world notes and I invest/collect almost exclusively US notes but I want to continue to communicate how I do it. First, Track and Price is necessary. It costs but I know it has saved me countless dollars by not overpaying. I then plot the price history for a particular note at a specific grade for all data in the data base. I see the same trend over and over. An incline in prices prior to the 2008-9 recession. A decline in price until about 2014 followed by price stabilization. The noise can be attributed to problem notes on the low end and low serial number, EPQ/PPQ or star notes on the high end. I choose a bottom of the stable trend and try to pick out my target notes on the low end of the stabilized trend. The first plot is the very common FR-1200 at a grade of 40 to demonstrate the long term trend. An example is an Fr-107 "person_too_unaware_of_social_graces" I picked out for my "Greatest Notes" set. I believe the long term price has stabilized although you might believe the price has further to fall. The red data point is the price I picked that note up. I may be full of it but at least there is some method to the madness. BTW Revenant is your man on Zimbabwe notes!

 

Fr_1200_40.jpg

Fr_107_65EPQ.jpg

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Ooops! I forgot typing "Jack A $ S" note causes the system to automatically spit out "person_too_unaware_of_social_graces"...:roflmao: 

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I'm in complete agreement that gold will begin to fall fairly soon (I hope), I tend to think it will break 1800 before a gradual decline back down to 1500 or less. My guess would be that it will take at least a year probably more like two before gold drops back to 1500. Love the charts and the thought process on banknotes, it's nice to have that kind of data available and extrapolate, not sure if I could find the same info for lesser know world notes but I'll check it out.

I do have a pretty good stack of small size NBN (exclusively Michigan) which I've collected over the years along with many notes from wildcat and state banks (all Michigan) and some odd and ends. Took a break from U.S. currency for a while but maybe now is the time to ease back in, maybe a nice easy FRN series. Asian notes are still going nuts, especially if you have the right S#. Was contemplating a S. Korean set, so many choices.:pullhair: 

2 hours ago, Sheik Sheck said:

BTW Revenant is your man on Zimbabwe notes!

You're right about that, his posts are the main reason I was sniffing around the Zimbabwe first series. 

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I found myself in a very similar place around the same time, not just because gold spiked, but because premiums for anything physical went insane. Like you, I've hit the notes hard. I was really thinking about branching out into Venezuelan Bolivars but when these 1st dollar notes started coming up I had to go for those instead.

The first series is a great choice in that it isn't a 27-32 note series (unless you start getting into varieties) and they just have more character and history than the 2nd and 3rd dollars. Every new attempt to relaunch the currency tries to make callbacks in the designs to the 1st dollar series because they desperately want the populace to associate the new currencies with that brief period of glory.

If you've been watching the recent eBay auctions on 1st dollar notes you've probably seen a lot of me slugging it out with one other bidder that has come onto the market for 1st dollar notes in a big way recently. Based on the fact that their feedback is over 3600 I suspect that they're a dealer or associated with one - they might be trying to pick these things up for resale, which would explain why they consistently give up once the price starts going past about $40-50. I also saw a 68 EPQ P-6 note get sold recently and then pop up later with another dealer that has a large stock of Zimbabwe notes - a dealer that I honestly hate just a little because he slaps insane prices on things, makes false or misleading statements about the pop reports in his listings and generally tries to over-hype and over-pump these notes because he wants people to pay $140 for a $35 note.

I'm so excited to finally see the new designs released. But I am increasingly worried that the new series is going to spiral out of control and we're going to see another long series with a power climb of zeros. I suspect that the only thing that might stop or prevent that is the fact that the population has seen this movie already and they're likely to abandon the new ZWD the second it even looks like that's happening. The RBZ had better be on their best behavior.

I think if you wait another month or so you'll probably start seeing PMG graded examples of the new $10 and $20 notes pop up with a couple of dealers. I'm waiting to see if the new notes / new series is going to cause a renewed wave of interest in the older stuff that I hope isn't going to drive prices back up.

5 hours ago, Sheik Sheck said:

BTW Revenant is your man on Zimbabwe notes!

3 hours ago, Fenntucky Mike said:

You're right about that, his posts are the main reason I was sniffing around the Zimbabwe first series. 

Thank you both! Reading that really is the best feeling. :)

 

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