The economy and custom knives

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Keith Montgomery

Keith Montgomery

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I know this has been covered somewhat in a different thread, but today it was really brought home to me. Here is what happened. I am purchasing a sheath from Chuck Burrows for my Bill Burke fighter. He asked that I send a $100.00 deposit. The Canadian dollar has dropped so much in the last week that it cost me $121.15 CND. A few months ago it would have cost me about $92.00 CND. That means that in the last few months my cost has increased about 32%. If things keep going this way, I am not going to be able to afford to purchase more expensive custom knives.

Over the last few weeks, many people have lost huge percentages of their savings. This is going to have to have an effect on future purchases. The fact that the US dollar has increased against many foreign currencies will have a detrimental effect for US makers as well, though it may be a good thing for non-US makers.

I have read that custom knives are somewhat isolated from being affected by economic factors, but I think the situation we find ourselves in right now is going to hit the custom knife market. What about the rest of you?

Sorry if this is a downer topic, but I think it is one of vital importance.
 
Keith, I am sure it will have an effect if the economy does not take a turn. I was at the Plaza Cutlery show last weekend and most makers had a great show. Several like Gray Taylor, Ken Steigerwalt,Ryuichi Kawamura, Joel Chamblin,Emerson, Onion, and Hinder sold out and could have sold more. Rogers and Ruple had a good show.
The situation we are in now will touch everything.
 
The recent drop in the Canadian dollar has definitely frosted me out. Matt Lamey just finished up a knife for me - which is great news. The not-so-great news is that it will cost me about 20% more than it would have just at this past Blade Show - strictly due to currency fluctuations.

It will be interesting to see how things progress. I certainly purchased knives when the Canadian dollar was even worse off (0.64 - yikes!) - but a weak dolllar definitely means that I will travel to fewer shows.

Roger
 
No doubt that custom knives will be difficult to afford and difficult to sell if the economy continues a downward spiral. I hear similar lamentations from local artists that my wife and I are friendly with.

I had to give a great deal of thought to purchasing a custom Ruple that I pulled the trigger on this weekend.

I ultimately decided to purchase it while my money is still good for something other than tinder and also because I want to support the folks whose work I find enriching.

I couldn't help but wonder though if I was purchasing at the "top of the market" and whether economic conditions would eventually force lower prices for custom knives. However, upon reflection I didn't want to contribute to that eventuality and thus decided to vote with my money. (That may have to change in the future.)
 
I will keep up with the thread with great interest. I have several international customers, and do keep up with currency fluctuations as much as I can.

The dominant indicator I have noticed with my business is that my high end market has been very strong. Mid and low end markets are very stagnant. You can sure tell who is hurting when the economy takes a down turn.

I have also noticed most buyers are very selective, which is probably not only due to economic circumstances.

I don't believe you will see custom knife prices drop from the makers. Secondary markets will turn up a lot of very good buys. You may see a wider selection of low end pieces from makers, but with EVERYTHING costing more, makers would be more likely to go out of business than lower prices. Besides, how would you feel if the knife you bought last year is now worth less from the maker?? Not a good situation.

I am not one to speak doom and gloom. I remain optomistic about our economy recovering, even though it may take several years. As long as it is moving in the right direction, I am happy. I am also fortunate to have a strong local economy. Oil and gas is big business here, and business is good.
 
The flip side of the dollar being down relative to foreign currency is that it encourages the influx of foreign capital, the sale of American goods, tourism, and so forth.

And, despite what what Katie Couric says, we are not in a recession (2 consecutive quarters of negative GDP). We haven't had one quarter, much less two.

And lastly, after the emotion leaves the stock exchange we will almost certainly see a boom time as these bargains are snapped up. I have a little cash laying around, and its going into an S&P 500 fund next week.

Iraq is going well (evidenced by the silence in the media), and the cost of crude is way down.

So, if Reagan were here, he would correctly tell us that our best days are just over the horizon.

Whats this have to do with custom knives? We just need to note that this downturn is temporary, its not as bad as some folks wish it were, and it sets the stage for the boom which will inevitably follow. And President McCain or Obama will almost certainly take credit for it. :)

JMO. :thumbup:
 
I think the US stock market (down 40% in 12 months) and the changing value of of the USD vs CND and other currencies might well affect knife sales by US makers and other makers in countries where the USD has strenghtened against their own currency.

I am trying to see a positive for collectors like Keith....maybe this is one...the knives you have purchased at say $100.00 USD with $92.00 CND ....if you were to sell them for $100.00 USD today, you could convert to $121.00 CND today. Assuming (big assuming) that the $121.00 CND has greater purchasing power for you for goods and services in Canada than $92.00 CND did, then you might be a winner re already purchased knives.
Theory also would support that a stronger USD would encourage US people to purchase more from their Canadian neighbors....
BUT, it is a heck of a challenging time for many folks in this world right now.

Going forward, because of the investment market, I might reduce the number of shows I do as a maker....but I hope that the investment market is bottomed out or darn close and that the, historically accurate, recovery will happen.
 
I think you are actually looking at two different items which are causing you concern. One the exchange rate between the US$ and the CAN$ and the other the general shape of the world economy.

I agree the sluggish economy will reduce custom knife sales. Like many others, I had some losses over the past few weeks and although I had a couple nice knives in my hand today at a gun show, I did not come home with any new additions.

The exchange rate may be changing with the US$ gaining strength, but if you look back a year ago I doubt you were complaining when the US$ was dropping like a rock and the CAN$ was gaining strength.
 
powernoodle said:
The flip side of the dollar being down relative to foreign currency is that it encourages the influx of foreign capital, the sale of American goods, tourism, and so forth.
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The American dollar is actually up against many foreign currencies. Over the last week or so the American dollar has strengthened a great deal.
 
I already said what I think in the other thread only to have it intimated that I have a negative attitude.

Nevertheless, the US dollar will get stronger against other nation's currencies over time beginning in the very near future because a world economy that's in recession, or economic turmoil, will choose the US dollar as the standard to measure against other currencies. World confidence in the US as a perceived leading economic powerhouse, whether deserved or not, will push up the price and the value of the US dollar higher over the next several months .

The whole economic situation we're in is catastrophic and is going to become deeper and more worldwide over the next few years, IMO.

IMO, there is no way that this will not effect the amount of dollars invested or spent in the custom knife industry by collectors.
 
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there is a flipside, I got a raise, I would say 85% of my sales are in U.S funds to Americains, and I bought a bunch of U.S cash when it was par,

But I might not be so quick to hop over the fence to do some shopping as soon as I would have.

cya
jimi
 
One bright note is gas was down 30-40 cents over the past week.
Strong dollar?
I will keep my trust in the Lord and not in Wall Street or Washington.
 
Omni44 said:
I will keep my trust in the Lord and not in Wall Street or Washington.
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My feelings exactly.

Most importantly, people need to not panic, but at the same time, they should be careful with the investments they hold because it may end up becoming worthless and you'll get dick as distressed companies file bk and are then taken over by other, stronger institutions. Washington Mutual is a perfect example of this happening.

If you have federally insured deposits in a bank, don't rush out and withdraw your cash. It's safe!
 
IMO, there is no way that this will not effect the amount of dollars invested or spent in the custom knife industry by collectors
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I agree.

Factor in the high unemployment rate of 6.1 , here in NV it is closer to 7.2%.

It might not effect the high end collector or the high end makers as much as the newer makers. The secondary market already seems to be taking a hit on certain knives.

Ride it out , it is about all we can do.
 
How about each of you individually? How do you think this will affect your future purchases. I know that if things keep going the way they are, it will definitely affect mine. I will either be spending less per knife, or purchasing fewer knives.
 
Keith Montgomery said:
If you're not interested don't take part. Comments like that are worse than useless.
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If the "Aftermarket in the toilet" thread with 224 posts and 7,132 views did not answer questions, why would another thread on the same topic have different results?
This is like visiting a sick person in the hospital and telling them their dying...
 
drf1 said:
If the "Aftermarket in the toilet" thread with 224 posts and 7,132 views did not answer questions, why would another thread on the same topic have different results?
This is like visiting a sick person in the hospital and telling them their dying...
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Like I posted earlier, if you don't have any interest in this topic then don't bother reading or posting in this thread. It's really very simple. Your comments add nothing and seem to be meant only to inflame. If you have anything of value to add to the thread then please do. If not, please ignore it and check out other threads that are more to your liking.
 
Maybe it is time to consider quality. Some of the high end makers are selling on the
aftermarket. If you buy 3 knives from unknown makers you are going to not be able to resell at what you bought them for. Just because it shines does not make it gold.
 
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