The recent strength of the US dollar has demonstrated what I've always suspected, which is: vintage watches are priced (or, denominated) in US dollars.

My question is why? Almost all collectible watches are European and primarily Swiss. Europe is larger economically than the United States in every metric. Watches are certainly more culturally associated with Europe, etc., etc..

When Asia and South America are added to the equation, the United States becomes even more diluted and less significant to the watch market.

I've not offered a shred of empirical data for my claim, just my anecdotal observations. If I'm wrong, then let me have it...

 

Almost all of my vintage purchases for past 2 years have been from Europe - the weak Euro + general availability make it a preferred hunting ground compared to the US. Shipping hurts though!

 

I would say its not just vintage watches. But for most things. The united states has the biggest economy as a country in the world.

 

I disagree. I'm an American and have purchased many watches from overseas. Nearly all eBay and PayPal transactions (and OF deals as well) are valued in the seller's home currency, be it €,£,¥, CHF, AUD, CAD etc). Only in some of the weaker or smaller economies of South America, Eastern Europe, Mexico etc are purchases valued in a stronger currency but not necessarily USD.

For instance, Most Eastern European, non EU, transactions are in Euros.

While the high USD makes it easier to purchase overseas watches, most transactions are still in the sellers home currency.

 

I'm referring to the "peg". Meaning: if I use one of my 20 year old TT Submariners as an example, the price has remained constant in US dollars over the last 18 months, despite the Euro losing 30% of her value versus the USD over that same period of time. (The value of that specific watch has actually increased...very slightly).

Apropos of, watches have been an excellent hedge for my Aussie and Canadian friends. The CAD and AUD have recently declined almost 40% vs. the dollar but watches have remained stable in USD. If someone from Austrailia purchased a Rolex 1675 for $2300 say 2 years ago, then they haven't lost a penny despite their home currency declining by over 1/3 to 40% over that 2 year period. Nice hedge!

Another example: If you work and earn income in Brazilian Reals and you save your pay in a Brazilian bank, then you got feeeeecked the last year or two as commodity prices have imploded.

However, if you were prescient (and, lucky) enough to purchase a vintage Speedster with your Real's, then you did well. The BRL has been demolished over the last year but Speedmasters have certainly done well.

 

Yes, this is probably a contributing factor. For certain.


Everything else being equal, I would have guessed that the GBP would be the "standard" since the largest auction houses are London based and the Pound Sterling has always been the premier world currency.

The USD and the GBP have sort of merged into a defacto "super currency" over the last 30 years (since Thatcher and Reagan?)

I know the pound sterling recently reached a 30 year low but my currency trader friends tell me this has more to do with dollar strength variance than the pound itself.

 

The United States is the biggest consumer country in the world as well. Thats why it is dictated like that. Put it this way europe as a whole when it comes to economy beats the united states only by a certain percentage. That says alot why market prices for many things are directed towards the us economy. Thats why they use to say new york city is the capital of the world.

 

Oil and gold are always US prices and dollars, years (20+) ago they used to convert to countries $$ now they don't even bother.

 

We are experiencing an unprecedented period of currency volatility. The USD is absurdly perceived as being strong, in spite of the fact that the country is effectively broke, and that its debts can never be repaid except through hyperinflation. The petro-dollar is dying, and major energy transactions amongst BRIICS nations are increasingly being settled in Yuan, Rubles and gold.

Gold, silver, fine paintings, vintage cars and watches, etc., cannot be conjured out of thin air, in stark contrast to the "money" that central banks around the world create with the stroke of a keyboard. In the relatively near future there is going to be another major economic crisis, and the relative values of currently strong currencies will change radically.

Plan accordingly.