Discover more from Monday Morning Economist
Pokémon Prints Them All
Over the past few years, the Pokémon Company has printed more than a quarter of all cards in existence, but Target shelves are still empty.
Pokémon cards were so hard to come by last year that Target temporarily stopped selling the cards because of unruly customer behavior and long lines outside of stores while customers waited for the shelves to be restocked. The Pokémon Company was in the middle of printing what would turn out to be more than a quarter of all cards they had ever printed. Typically an increase in the supply of this magnitude would result in decreased prices, or at the very least, elimination of the shortage. Fast forward a year and the shortage continues. Target continues to limit the number of packs buyers can purchase at any one time:
Similarly during the pandemic, the supply of money in the US increased by about 40% from the start of 2020 until the end of 2021. Even looking at a subset of the money supply that would be more similar to Pokémon cards, like the amount of currency in circulation, shows a 23.6% over the same two-year period. While the amount of money has increased in the economy recently, don’t fall for the viral misinformation that it represents 40% of all money that has ever been created.
A large increase in the money supply could potentially result in inflation if it’s growing at a faster rate than the economy’s ability to produce goods and services. There have been some relatively recent surges in inflation, but the US dollar has also strengthened against many other currencies. A surprising result, however, has been that while we see some inflationary impacts from supplying more money, we haven’t seen a similar result for Pokémon cards.
The retail price at stores has remained low enough that the quantity of packs people demand is larger than the quantity that some particular stores can actually supply. While we don’t know what price would balance this market and result in equilibrium, it’s easy to tell by the empty shelves that the current price isn’t high enough. Prices for unopened packs should actually be higher, but Target continues to sell the packs at a standard price and opts to impose quotas on buyers.
There are a number of secondary websites that track the selling price of particular cards and packs. Since The Pokémon company can’t print enough packs to satisfy the current demand, cards sold on the secondary market have become pricier. Common cards sell for pennies while ultra rare cards sell for hundreds of dollars. It’s all about supply and demand!
Some card values have declined since the start of the pandemic, but many of them have seen a dramatic increase in price. For example, an uncommon Kadabra card currently sells for around $1.16 today but was selling for about 25¢ at the start of the pandemic. The chart below tracks the average sales price (blue line) and the number of transactions (green bars) for the card. The start of the pandemic is indicated with a very small red bar on the middle-left side of the chart around 3/24. The pink bar on the right side indicates when a social media personality claimed to own the most expensive Pokémon card in the world:
While the US continues to print more money and The Pokémon Company continues to print more cards, both have seen their value increase since 2020. It’s important to keep in mind that the prices we see for items represent both the demand and the supply of that item. Large supply increases will drive down the price of products whenever that shift is larger than the demand changes. In each of these cases, however, the demand for both US currency and Pokémon cards has been large enough to keep prices high.
Each of these demand increases seems to have been driven by the start of the pandemic. As people sheltered in place, many adults realized how much fun they had playing Pokémon as kids. While Americans may find the US economy in a weird position, things are apparently much weirder around the world and currency investors are seeking stability in the form of US dollars. Growing demand for US currency has resulted in it finally being at parity with the Euro, which hasn’t happened in over 20 years:
The Pokémon card bubble hasn’t burst thanks to the increased production levels that helped drive prices back down some. As new packs are released, the demand will likely increase again. If you have some old cards stored in the attic or laying around in a box somewhere in the garage, it may be time to dig those out and see if you have an ultra-rare card hidden among your stash. If you really were trying to catch them all, you likely may have caught yourself a nice payday as well.
In 2020, the Federal Reserve ordered 5,168,000,000 notes valued at $146,374,400,000 from the Bureau of Printing and Engraving [The Federal Reserve]
There are an estimated 13,589 Pokémon Trading Cards that have been released in the English language [Dexerto]
In a study of over 500,000 Pokémon card sales on eBay, 8.5% of the sample were Pikachu cards [Trends & Tactics]
The Pokémon Company has sold an estimated 34.1 billion cards since their first cards were sold in 1998 [PokeGuardian]
Logan Paul owns the most expensive Pokémon trading card (PSA Grade 10 Pikachu Illustrator), which was sold at a private sale for $5,275,000 [Guinness World Records]