Cards, Economics & Sci-fi

[Collect Equity]

Even though I've been reading this site for some time, I've never joined in or posted because I feel like I'm a little leagure trying to pinch hit at an MLB game. But after watching Brett receive 500+ responses and create 12 fights with his first post, I figured I'd give it a shot.

For years I've wondered what an economy strictly based on baseball cards would look like. What if absolutely everyone in else in the US shared our passion for cards? What if cardboard with baseball players - instead of paper with politicians - was the legal tender for all transactions?

This led me to consider that it would be a highly ineffective economy since it would be based upon a bartering system. To be effective it needs a standard that everything else could be compared and measured against.

So now for my question and the sci-fi part of the post:

Let's say that in 15 years the US dollar hyper-inflates to the point that it is worthless, causing everyone to reject it as a currency. Instead, each state does their own thing. Some states rely on bartering, some on gold, and Texas of course creates its own own currency backed by oil.

If during this inflationary period we as a community are planning for the National show and we want to create some standard pricing, so that people have some way to price their cards at the National, what baseball card would we use as the standard pricing unit?

Here are two thoughts I have:
1) Use a low-grade T206 common (i.e., ~$35-$45). So you could price a 1960 Topps common at .25T [T meaning T206) and a high grade T206 Cobb at 100T.

2) Use the '89 Upper Deck Ken Griffey Jr. I know it's heresy to use a modern card as a means of comparing vintage card prices, but Griffeys are really very common, almost as common as Washington $1 bills, and they'd be very liquid.

I'd love to hear other's thoughts. As a disclaimer, I know nothing about economics and am not even sure that my explanations above made sense or are based upon sound economic principles.

[FrankWakefield]

When the currency of the United States becomes worthless, our old ball cards will be virtually worthless, too.

[ChrisStufflestreet]

One difference:

When a dollar gets beat to hell, it's still worth a dollar.

That can't be said about baseball cards.

[Collect Equity]

Originally Posted by FrankWakefield

When the currency of the United States becomes worthless, our old ball cards will be virtually worthless, too.

If it's all about supply and demand, then when the dollar has no demand because there is too much supply as long as people are still collecting cards they should be worth something since they still have demand and low supply. Maybe they'd be worth Euros, or more likely Chinese Yuan.

[BlueDevil89]

With inflation in the USA, the prices of cards go up too, just the same as milk, bread, cars, homes, etc. If dollars become easier to come by because the government is adding liquidity into the marketplace, everything, including income goes up, and we all have more cheap dollars to spend on baseball cards. In that regard, baseball cards are a hedge against inflation relative to the US currency.

[jabiloxi]

I like this idea, but in a situation like the OP mentioned, I would have to say that perhaps food and precious metals would take a precedence in such an economic collapse, and always will. What I guess I mean is that, I would stuff my baseball card collection somewhere safe and barter using more life sustaining resources. Unless I found a very reminiscent man who was not diluted by hunger, thirst or need for shelter, and only cared for vintage baseball.

Collecting objects of such value is a result of our ability to live comfortable lives in a sense. We have disposable income which we can use to pursue an entertaining investment opportunity. However, if we were to suffer a catastrophic collapse of the financial network we depend on, then our collecting efforts wouldn't hold as much weight in our lives as they now do and more important pursuits for heightening our actual quality of life would soon garner all our attention, focus, and time.

[FrankWakefield]

It isn't supply and demand...

The day that the US dollar has no value... well leading up to that day would be when our government has fallen, our economic system is shot, all of the mom-apple pie-american way stuff is gone... There will be virtually no demand for ball cards in that future. They'll be good for bookmarks.

[BlueDevil89]

The doomsday senario that is being painted (ie, the US dollar has no value) is nothing short of a nuclear holocaust, major meteor strike, super volcano eruption, etc. In that case, I agree that if we are in the grips of a nuclear winter, with food and basic resources in short supply, then baseball cards are of little value. If that is your future view of the world, you are likely preparing like a survivalist, and not putting your disposable income into vintage cards and collectibles.

Short of an apocalypse, inflation in the US will lead to higher baseball card prices. Remember, we're currently in the grip of the worst financial crisis since the Great Depression, and vintage card prices are remaining relatively stable. When we do eventually pull out of this economic downturn, I expect card prices to begin to run higher.

[Section103]

I dont know about cards, but if the Union falls and every state starts doing their own thing, I am indeed moving back to Texas.

[Bridwell]

Jonathan,

Welcome to the board, and interesting first post. It is philosophical, but I would venture that trading dollars here in the U.S. is a non-monetary bartering system already! Since we went off the gold standard, anyway. We're really just trading pieces of paper, with a little fabric in them and no intrinsic value. It's a lot like trading baseball cards, in a way...

Ron R

[ChrisStufflestreet]

Originally Posted by Bridwell

We're really just trading pieces of paper, with a little fabric in them and no intrinsic value. It's a lot like trading baseball cards, in a way...

Except that you can always go to the bank and trade a dollar that's creased, worn or been ripped into two pieces for a brand new, crisp bill. They both have the exact same face value.

On the other hand, known counterfeit baseball cards might be worth a small amount for collectors interested in using them to fill in a couple of holes until a real version of the card can be found (and as long as they are sold again as counterfeit, I have no problem with that). Counterfeit money...not the same thing.

[Bicem]

Originally Posted by FrankWakefield

It isn't supply and demand...

The day that the US dollar has no value... well leading up to that day would be when our government has fallen, our economic system is shot, all of the mom-apple pie-american way stuff is gone... There will be virtually no demand for ball cards in that future. They'll be good for bookmarks.

I think this hypothetical exercise is meant just for fun.

[steve B]

Sticking with the sci-fi scenario. There's a lot of people here, so we'd need something really plentiful as a base currency. I'd think 1988-90 donruss could cover it, and everything else could be described as multiples of that.

I'm sort of picturing 88 donruss as societies paper pennies. Yeah, I know that's way over valuing them, but Inflation was mentioned.



As to the other stuff, the concept of what backs our currency is a pretty slippery one. (Opinion follows, I'm not an actual economist nor did I stay at a holiday inn express, but I think I've got the overall concepts down) The Gold standard is simple, but at some point there isn't enough gold to back enough money to make it all work.

So what our money is based on and backed by is a combination of things.
First is the existence and value of the entire country, every building bridge, road, card, car, everything. This is the most important aspect.
second is the government says it's worth something that represents a particular ammount of someones labor. This is a bit less major since the value of someones time varies so widely as does confidence in the government. But some of that labor produces the stuff with a more stable value.

On a limited scale we all work with money in roughly the same fashion. If you read an old enough bit of money, it reads like a check. And a check is self issued currency backed (hopefully) by your bank account. If it could be trusted enough, a blank check for $1 would actually circulate as a dollar. In current practice, that just doesn't happen, but in theory it could. That's similar to the gold standard.

Now if you write checks based on your future earnings and enough people blieve you'll continue to make money.... That's more like our current system.
It's also sounding a lot like credit, and it's essentially what we're doing with credit cards. Way back the slips had to be banked and processed manually, and were actually worth something between the time the sale happened and the time they were banked.

Ok, so that's a bit over simplified, but I think it's pretty close overall.

Steve B