US dollar, euros and comics...

[tth2]

I'd seriously like to know how much of the overall annual comic collecting pie is accounted for by foreign buyers who live in countries that have experienced significant currency strengthening vs. the U.S. dollar (remember, a lot of countries have currencies pegged officially or unofficially to the dollar and haven't benefited from the dollar's weakness in the past few years). Everyone has anecdotal stories, and I don't doubt that the weak dollar is spurring more buying by foreign collectors, but it sounds like there is more hype than reality to me - nothing like the Japanese snapping up all those prized buildings, artwork, etc. in the 1980s, for example.

Gene, I can tell you unequivocally that foreign buyers have absolutely transformed the Duck market in the last 4 years. They drove the prices up initially when they came in, which caused US buyers to raise their game to stay in the game, which led to an ever-escalating prices. No question about it. Now, whether the Europeans' emergence in the market was driven by their strengthening currency, or simply increased buying opportunities through the internet and CGC, or a combination of both, is a good question.

 

There have also been big purchases in the SA and BA market over the last few years by European and UK buyers. For example, Colmoreman from the UK didn't blink about buying a 9.6 X-Men #79 at an ungodly price. Now, he likely would have bought it at that price regardless of exchange rate movements because he really wanted the book, but I'm sure the strong Pound made it a lot easier decision for him to pull the trigger. Some of these overseas buyers were established collectors even before the big appreciation, such as Colmoreman/Mark Arrandt, and some are relatively new blood, but I have no doubt that their purchases have been facilitated to some degree by their strengthening currencies.

 

A market doesn't have to be dominated by foreign buyers for their presence to be felt. As you well know, when a market has equilibrium, it's the incremental buyer/seller that really changes things, and it can easily lead to a upwards spiral. If they come in spending 15% more because their currency has appreciated 25% more, then US buyers (or buyers from countries with currencies pegged to the USD, such as yours truly) have to raise their games to keep buying books, which then causes the European buyers to raise theirs, etc., until a new equilibrium is reached.

[tth2]

I used to have to pay $1.60 Canadian for one US$, now it is about $1.10. I still spend the same amount of C$s, but it translates into a lot more comic books. Unfortunately, I haven't benefited much from the rise in the market over the last few years because I have lost almost 50% on currency. It is a double edged sword, but definitely promotes buying for me.

 

Monkeyman;

 

Exactly right as this drop in the U.S. greenback is most definitely a double-edged sword.

 

Everytime this topic comes up, 99% of the posters talk only about the great buying opportunity which they now have. Really surprised that virtually nobody ever talks about the huge financial pounding their collection just took.

Unless you're forced to mark your collection to market every month, why in the world would you? If you're a collector, your view would be that you had a great collection before, and each of those issues still looks just as nice. And those pesky holes in your collection can now be filled because [fill in the US dealer's name]'s outrageous prices for that elusive issue is now only semi-outrageous.

[tb]

My guess is that collectors in Europe (in particular France/Belgium/Germany/Denmark/Norway/Sweden) have learned more about CGC & US Comics. In these countries you will see that the price of a VG/FN compared to a NM- will be about double price……

You're absolutely right, I think this has been a big factor too.

 

I agree that increasing awareness of the US comics has played a role.

 

Although the Euro is stronger today, another factor to consider is that most of the above countries have some of the highest tax rates in the world. I just read that Belgium has the highest top tax bracket at 69%, Sweden is #2 (64%, I believe), and Denmark #3 at 63%. In Denmark, 1,900 individuals had a taxable income of over $350,000 last year and 14,000 made over $200,000 (almost all of these amounts would fall under the 63% bracket). In comparison, I live in a US town with a population of roughly 50,000 where the median household income is over $100,000. Given that, it is probably reasonable to assume that there are more individuals in my town with a disposable income matching $200,000 in Danish currency than there are in all of Denmark. Not considering the short term impact of the cash freed up in the real estate market, I suspect that the disparity between disposable incomes will continue to play a much bigger role longer term.

 

I think that the strong Euro has shifted the picture somewhat, but I don't think it anywhere near makes up for the lower fraction of higher incomes in Europe. Tax rates have dropped a lot in Germany and some other countries this decade. I believe the top bracket in Germany has gone from 54% to 44% since 2000(? - don't have any income statistics for DE). There is a general movement towards lower taxes in Europe and I suspect that would have a more significant impact over the next decade than the currency rates.

 

There are Scandinavian collectors who can compete for the very best US comics, but I suspect they can be counted on one hand(?). Most of the collectors I know focus on mid-grade.

 

I am by no means an expert in Economy, but my impression is that the impact of the low $ generally has been overrated in the discussions here. Disney comics may be one special case since there are probably more European collectors of the US first editions than there are American.

 

Nice to see you post again, robyx!

[codfish]

Stronger currencies are not ideal. Par or just below is better. If the Canadian dollar, for example, makes the gains against the American dollar as they predict our economy will take a bit of a hit as our exports will drop. That is one of the problems for those countries using the Euro. While there definite consumer benefits higher currency values have a bigger detractive force.

 

As for the value of collections "going down" or "taking a hit" .... I don't really think about that because honestly it only has an estimated value which can be very different from a realized value.

[-cryptkeeper-]

and the French have such contempt for America that they want nothing to do with our silly comics.

 

this is a riot Blob , i must be

[Earl Davis]

I used to have to pay $1.60 Canadian for one US$, now it is about $1.10. I still spend the same amount of C$s, but it translates into a lot more comic books. Unfortunately, I haven't benefited much from the rise in the market over the last few years because I have lost almost 50% on currency. It is a double edged sword, but definitely promotes buying for me.

 

Monkeyman;

 

Exactly right as this drop in the U.S. greenback is most definitely a double-edged sword.

 

Everytime this topic comes up, 99% of the posters talk only about the great buying opportunity which they now have. Really surprised that virtually nobody ever talks about the huge financial pounding their collection just took.

 

It hasn't providing you buy from US sellers and sell to UK buyers.

[Earl Davis]

Generally when the dollar is weak I but mainly from US dealers, when the dollar is strong I mainly buy from UK dealers. Of course having an interest in titles like Rupert, Tintin and The Eagle sometimes I have no option but to buy from UK dealers due to the low interest in those titles in the US.

[tth2]

Although the Euro is stronger today, another factor to consider is that most of the above countries have some of the highest tax rates in the world. I just read that Belgium has the highest top tax bracket at 69%, Sweden is #2 (64%, I believe), and Denmark #3 at 63%. In Denmark, 1,900 individuals had a taxable income of over $350,000 last year and 14,000 made over $200,000 (almost all of these amounts would fall under the 63% bracket). In comparison, I live in a US town with a population of roughly 50,000 where the median household income is over $100,000. Given that, it is probably reasonable to assume that there are more individuals in my town with a disposable income matching $200,000 in Danish currency than there are in all of Denmark. Not considering the short term impact of the cash freed up in the real estate market, I suspect that the disparity between disposable incomes will continue to play a much bigger role longer term.

I think it all evens out in the end. In some US jurisdictions, such as NYC, by the time you get finished with federal, state and local taxes, your total tax rate ends up pretty high. Plus, while Europeans get more of their income taken out in taxes, for the most part they don't have to spend as much on their childrens' educations, particularly college educations, medical care, and savings for retirement. I know that when I tell my English and European friends here how much I expect to have to spend for my daughter's college education in 11 years (assuming that tuition continues to appreciate at 10% per year as it has for the past 25 years, and assuming that she goes to a private university in the US), they're just dumbfounded. And that's not even taking into account grad school. That's a major hidden tax on Americans.

[lou_fine]

I used to have to pay $1.60 Canadian for one US$, now it is about $1.10. I still spend the same amount of C$s, but it translates into a lot more comic books. Unfortunately, I haven't benefited much from the rise in the market over the last few years because I have lost almost 50% on currency. It is a double edged sword, but definitely promotes buying for me.

 

Monkeyman;

 

Exactly right as this drop in the U.S. greenback is most definitely a double-edged sword.

 

Everytime this topic comes up, 99% of the posters talk only about the great buying opportunity which they now have. Really surprised that virtually nobody ever talks about the huge financial pounding their collection just took.

 

Unless you're forced to mark your collection to market every month, why in the world would you? If you're a collector, your view would be that you had a great collection before, and each of those issues still looks just as nice. And those pesky holes in your collection can now be filled because [fill in the US dealer's name]'s outrageous prices for that elusive issue is now only semi-outrageous.

 

I guess I am really talking about the missed opportunity cost of not selling when the exchange rate works financially to your advantage to be selling. Of course, as a collector, I never really am inclined to sell at any point in time. Eventaully, however, even collectors sell and I certainly don't see the US dollar gaining 50% ground against other foreign currencies in the interim.

 

Needless to say, I am constantly reminded of this huge exchange rate drop and resultant devaluation of my collection on a constant basis by my wife. She just on and on about how I should have sold everything and placed it into the real estate market which has continued to rised unabately during the past several years. I then foolishly tried to remind her of her constant about how we should have sold off real estate back in the very late 90's so that we could invest in tech stocks, which she of course conveniently no longer remembers. Of course, the wife is always right.

[tth2]

I'm so thankful my wife has no interest in financial matters whatsoever and therefore doesn't nag me about those kinds of things. Unless you count giving me a hard time for not buying her more jewelry back when I was working at a law firm and making more money.

[lou_fine]

As for the value of collections "going down" or "taking a hit" .... I don't really think about that because honestly it only has an estimated value which can be very different from a realized value.

 

Not sure of what you really mean here as I really don't see much of a difference between estimated value and realized value if you do indeed sell a book.

 

For example, if you sell a book for its estimated value of $5K USA when the Canadian exhange rate was 1.60, your realized dollars would be $8K Canadian. Now that the exchange rates have dropped down to 1.10, the exact same sale at the same estimated value of $5K USA would realized you only $5,500 Canadian.

 

To me, I see that as a net loss especially if you had brought the book when the excahnge rate was at 1.60. If you are a collector and simply holding books in your collection, I still see it as a loss, but really more of an [/b]opportunity loss[/b] that's going to be realized when you do sell your collection (expecially since the USD is not likely to gain back all of its lost strength).

[Earl Davis]

At the moment I am saving about $20 per $100 I spend over what I was having to pay about 3 years ago.

 

Earl.

[Sir Ped of Ro]

At the moment I am saving about $20 per $100 I spend over what I was having to pay about 3 years ago.

 

Earl.

 

more like 25$ these days...

 

in general the ffedback i have from fellow collectors are that more and more fans go for the US market since the difference in currency is quite important and that the french market doesn't have much backissues/collections and the stores doen't care about the stronger euro (just just put a simple currency 1euro = 1$ and they add they inflatuated prices)...

 

regards

[chromium]

Although the Euro is stronger today, another factor to consider is that most of the above countries have some of the highest tax rates in the world. I just read that Belgium has the highest top tax bracket at 69%,

 

YES, we win again....

 

I have no idea what impact the exchange rate has on European comic buyers for the simple reason I don't know any comic collectors outside the people on the forum.

But speaking for myself, when I arrived on the boards about 6 years ago, my comic budget was around $395 per month, now it's $675 and I'm still spending the same euro amount.

 

It's easier, mentally, now to buy more expensive books for me now as when I see the price in dollars I can safely subtract around 30% of the price as a part of me still thinks and acts like the dollar/euro are 1/1

[arexcrooke]

Although the Euro is stronger today, another factor to consider is that most of the above countries have some of the highest tax rates in the world. I just read that Belgium has the highest top tax bracket at 69%,

 

YES, we win again....

 

I have no idea what impact the exchange rate has on European comic buyers for the simple reason I don't know any comic collectors outside the people on the forum.

But speaking for myself, when I arrived on the boards about 6 years ago, my comic budget was around $395 per month, now it's $675 and I'm still spending the same euro amount.

 

It's easier, mentally, now to buy more expensive books for me now as when I see the price in dollars I can safely subtract around 30% of the price as a part of me still thinks and acts like the dollar/euro are 1/1

[Earl Davis]

At the moment I am saving about $20 per $100 I spend over what I was having to pay about 3 years ago.

 

Earl.

 

more like 25$ these days...

 

in general the ffedback i have from fellow collectors are that more and more fans go for the US market since the difference in currency is quite important and that the french market doesn't have much backissues/collections and the stores doen't care about the stronger euro (just just put a simple currency 1euro = 1$ and they add they inflatuated prices)...

 

regards

 

Generally true for me but I do buy from French / Belgium sellers sometimes to get stuff you just can't find from US and UK sellers, like 1950's Tintin and Spirou comic magazines.

 

Earl.

[-cryptkeeper-]

Although the Euro is stronger today, another factor to consider is that most of the above countries have some of the highest tax rates in the world. I just read that Belgium has the highest top tax bracket at 69%,

 

YES, we win again....

 

I have no idea what impact the exchange rate has on European comic buyers for the simple reason I don't know any comic collectors outside the people on the forum.

But speaking for myself, when I arrived on the boards about 6 years ago, my comic budget was around $395 per month, now it's $675 and I'm still spending the same euro amount.

 

It's easier, mentally, now to buy more expensive books for me now as when I see the price in dollars I can safely subtract around 30% of the price as a part of me still thinks and acts like the dollar/euro are 1/1

 

[12c_Comic]

It about time here in Canada collectors are getting a better deal on purchases south of the border.Some say by mid to late fall we could see a dollar to dollar exchange here......

[codfish]

As for the value of collections "going down" or "taking a hit" .... I don't really think about that because honestly it only has an estimated value which can be very different from a realized value.

 

Not sure of what you really mean here as I really don't see much of a difference between estimated value and realized value if you do indeed sell a book.

 

For example, if you sell a book for its estimated value of $5K USA when the Canadian exhange rate was 1.60, your realized dollars would be $8K Canadian. Now that the exchange rates have dropped down to 1.10, the exact same sale at the same estimated value of $5K USA would realized you only $5,500 Canadian.

 

To me, I see that as a net loss especially if you had brought the book when the excahnge rate was at 1.60. If you are a collector and simply holding books in your collection, I still see it as a loss, but really more of an [/b]opportunity loss[/b] that's going to be realized when you do sell your collection (expecially since the USD is not likely to gain back all of its lost strength).

 

If a book is in your collection and you have no plans on selling it then there is no lost value. The only time you lose or gain is if you sell a book and that that realized price is more or less that what you bought it for (in total including shipping if you had it shipped). The only other way you can lose or gain is in insurance, should your insurance cover collectibles.

 

Until the time you try and sell a book or have to claim insurance the book hold no value at all. The whole value attached to it is a an estimate or book value and those values do not often truly reflect the actual market.

 

The only reason I would worry about exchange rates was if I was an active dealer that regularly sells across borders. I am not and do not so I am not concerned about exchange rates changing or the "value" of my collection. If I was worried about such things then I would consider myself and investor and I would definitely NOT have most of the books in my collection because they are not investments.

[the blob]

I think tax rates are somewhat of a red herring. If one does not need to spend money/save for retirement, medical care and children's educations, that's a big savings and you can afford higher taxes.

 

In countries with high marginal tax rates people potentially in those income brackets find ways to avoid getting hit. for example, if you own a business, don't pay yourself a fat salary, figure out a way to get the business to pay for your personal needs, etc. Denmark may not have a huge number of high income earners, but isn't it a relatively wealthy country with per capita income on par with the U.S.? The Danes don't have a huge impact on the comics market because well, for the same reason Delaware doesn't have a huge impact on the comics market, there aren't that many of them!

 

honestly, i think, when one factors in property taxes, some of the NYC suburbs (Westchester, Nassau) could very well be over 50% for upper middle class people. It is not at all unusual for a decent house to have $20,000 a year in property taxes. this is on top of a state tax rate of 9%, federal, social security, 8%+ sales tax, etc. NYC has a 4%+/- income tax, but I'm ok with that right now (because I'm not making much money!) because my property taxes are $4K and they'd be $20K+++ in the burbs.