Question about Silver

topcat · Posted: Sun Nov 04, 2007 3:35 pm Post subject: Re: Question about Silver

For shopping on-line APMEX.COM seems to have low prices. Have never bought from them but do check their prices before going to coin shows to buy anything.
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sittinguy · Heavy Crude Joined: Sep 07, 2007 Posts: 385

I have been buying on Ebay lately. I love getting gold in the mail Smile

Revi · Fusion Joined: Apr 25, 2005 Posts: 3531 Location: Maine

I just buy "junk silver". It is available at all kinds of places like pawn shops, antique stores, etc. It's usually around 10 times face value, but it may have gone up a lot in the past few weeks.

They are pre-1964 silver coins. They are 90% silver and you get around 90% of an ounce with a silver dollar. That works out to about 80% of the silver price. For example you should pay around $12 for a silver dollar, $6 for a fifty cent coin, $3 for a quarter and $1.20 for a mercury dime. You will have to pay more if it has some numismatic value, but that's ok.

I have really grown to like the look of the Peace Dollar and the Walking Liberty half dollar. They were made in a time when money was real. I love the Art Deco look.

The Morgan has a late 1800's look to them. You can imagine that they were used in some poker game played on a paddlewheeler churning its way up the Mississippi. A good price for them is around $15 or $16, depending on the year.
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mekrob · Expert Joined: Dec 09, 2005 Posts: 2663

Is it my lack of sleep, or are you way overpaying for those coins, Revi?

A silver dollar is 8.100 grams or .260 troy oz. At 90% silver, that's only .233 troy oz of silver. At ~$15 per oz, that's only a value of $3.62. Or am I missing a step in that calculation?
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FoolYap · Posted: Fri Nov 09, 2007 8:19 pm Post subject: Re: Question about Silver

Mechler · Posted: Fri Nov 09, 2007 9:35 pm Post subject: Re: Question about Silver

topcat · Posted: Fri Nov 09, 2007 10:06 pm Post subject: Re: Question about Silver

The Morgan's have a weight 26.73 G, are composed of 90% silver, and have a weight of .77344 oz pure silver (according to "The Official Red Book - A Guide Book of United States Coins - 2008).
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Revi · Fusion Joined: Apr 25, 2005 Posts: 3531 Location: Maine

Morgans and Peace Dollars both weigh 26.73 grams and have the same percentage of silver. Every coin dealer recognizes them. They were issued for many years, so people know what they are.

I just went in to the Antique store to check for silver dollars, and somebody else had cleaned them out. We're not the only ones who know what's happening with the dollar.

I'm pretty sure that they will be very tradeable in some future doomer scenario. I envision trading a pre 1964 mercury dime for a pound of beans in the not too distant future at the Farmer's market.

We found a coin a couple of years ago, washed out of the soil near the Kennebec River. It turned out to be a Mexican Real silver coin. The guy who lost it was probably headed to town in the early 1800's. We had it looked at by the Maine State Museum. Apparently they used them as money in the area because they didn't trust the paper money. Sound familiar?

I think that if times get bad enough the use of silver as currency may come back. It certainly holds its value.
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manu · Intermediate Crude Joined: Jul 26, 2006 Posts: 764

mekrob · Expert Joined: Dec 09, 2005 Posts: 2663

APMEX and Kitco seem to be having problems with their sites. They claim a large increase in the amount of traffic and thus are experiences delays (Kitco) and pushing small investors out by requiring $5,000 purchases and limited stock (APMEX). I haven't checked any local stores, since there are none that I can reach at any given day, so I don't know how widespread this is. Did we just miss out on really purchasing any silver/gold? Is most of it getting eaten up? I thought the majors were supposed to be selling theirs (creating a "glut") for much needed cash.
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I want to put out the fires of Hell, and burn down the rewards of Paradise. They block the way to God. I do not want to worship from fear of punishment or for the promise of reward, but simply for the love of God. - Rabia

Revi · Fusion Joined: Apr 25, 2005 Posts: 3531 Location: Maine

A lot of the stores I used to check out are out of the kind of silver I like to buy. They have the high end numismatic silver, but none of the dates that sell for right around the silver price. I've stopped buying as a result. I think I may buy this dip, though if I can find any to purchase. I sold some Canadian dimes and may turn that back into pre-64 US silver if I can, next week. We'll see what there is around. It would be nice to pick some up for less than 10 times face value.
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FoxV · Posted: Thu Mar 20, 2008 2:24 pm Post subject: Re: Question about Silver

Before I get into my little ramble below I'd just like to suggest buying miners and stocks when gold is going up or high, and to buy physical bullion when the price is low or going down. This allows you to be non-committal when the price reaches a peak. So that when there are price turn arounds (like this week) you can bail out of the stocks and not have to be kicking yourself say "Why did I buy 5oz when I could have saved myself $500 by waiting a week".

Ideally the best would be to take profits from the stocks sale when its high, and roll it into physical metal when its low. That way your stocks can become a little "Bullion generator" for you.

Now then, a not so brief ramble about what I've found out about the recent gold and silver investment history.

Right now Gold and Silver (and the miners) are horribly beaten down investments. I asked my mother a couple of years ago about recommended PM investments and she said "Why the hell would you want that? Nobody invests in Gold and Silver any more." Gold was $450 at the time.

With all the manipulation during the 90's (CBs crushing Russia with Gold sales, Hunt brothers trying to corner the silver market) A lot of people got badly burned. Add to this the Fed's serial bubble blowing and everyone just lost interest in PMs. Gold miners also didn't help things by getting involved in massive hedge contracts at very low prices (Barrick's being the worst with hundreds of tonnes of gold sales locked in at $350/oz up until 2006)

Although market screwups have left some strange anomalies in the PM market. One is that the Gold/Silver ratio is now 1:50 where as the Classic Gold/Silver ratio is 1:16 and the US gold standard had it at 1:20. So silver is way out of wack in its pricing.

The Gold/Oil ratio jumps around a lot, but its average is 15bbls of oil to 1oz of gold. Currently the Gold/oil ratio is around 1:9. Also to top it off we exceeded the inflation adjusted peak price of oil, however we are way below the inflation adjusted price of gold (at $2500/oz). This is also using official inflation prices. If Real inflation (shadowstats) is used than the Inflation adjusted price should be at least double.

So at present the upward potential of Gold and Silver is huge.

In the future, the upward potential is astronomical. Right now there are lots of investment banks with Short positions which is holding the price down. As the price goes up (and the banks holding these shorts go under) there will have to be a short covering rally. Right now there are more Short positions in the Comex for Silver than there are ounces of Silver. The price movement that would result from such positions unwinding is mind boggling (not to mention, this is naked shorting and illegal, but that never stopped the big boys before)

The current equities and bond market is around $50T dollars. The current Gold market is around $3.5T. If people move 10% of their savings from Equities to PMs (like they should). The PMs stand to skyrocket. Expect to see this switch over starting soon when pension funds start marking their MBS bonds to $0 and have to find Safe Havens for their remaining money. I also suspect that once China is finished with the Olympics, there will be a lot of dollar dumping.

There is also a matter of depletion. World Gold and Silver production has been going into decline for a few years now and the current mines are expected to be depleted by 2017. So all the price expectations for peak oil also apply to gold and silver except on a much shorter time line.

Finally there's the baby boomer crisis. Almost all the G8 countries (with the exception of Canada who is lying) will not be able to meet there safety net requirements (starting as early as 2010 for some countries). This means the money will have to come from somewhere. And even if the Sovereign wealth funds wanted to lend us the money, they don't have enough. US's SS shortfall alone is around the $50T range. The only solution for governments the world over will be Printing.

Add to that Peak oil, Peak Water, Peak soil, Global warming, and die-off, there becomes a very good case for having you're own little stash of Gold and Silver.

Anyways sorry for the long post. Hope it helps those of you that haven't heard it before, and doesn't bore those of you that have. Ultimately its a bit of therapy for me to get over the current price drop. Rolling Eyes

Happy hoarding
Very Happy

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manu · Intermediate Crude Joined: Jul 26, 2006 Posts: 764

Thanks for the post FoxV. Interesting.

GeoJAP · Posted: Mon Mar 24, 2008 12:50 pm Post subject: Re: USA gold