Post by Ozarks Tom on Nov 28, 2015 22:55:06 GMT
Okay, I'll start this forum off with what little I know about junk silver.
The term junk silver applies to all silver coins (with the exception of silver dollars) minted in 1964 or before. These coins contain 90% silver, whereas coinage minted after 1964 is full of alloy of little value.
When dealing with precious metals, keep in mind they're valued in TROY ounces, rather than the standard ounce. A Troy ounce is 91% of a standard ounce. So, if you were to buy 100 standard ounce of coins (in any denomination) you would multiply by .9 to get standard ounce silver content, then multiply by .91 to find the Troy ounce. Today's spot silver price is $14.17/troy ounce, so 100 standard ounce gross coinage weight would figure to 81.9 troy ounces X $14.17 = $1160.53.
When buying junk silver nearly all dealers charge by face value multiplied by a varying figure, depending on spot price as of that day. For instance, when spot price is about $14.50/troy ounce, expect to pay 14 or 15 times the face value of the coins. A dime for instance would cost you between $1.40 to $1.50 depending somewhat on your negotiating skills, and how flexible the dealer is. At today's spot price, probably a fair deal is face times 13.5. However, if you were to go to that same dealer to sell your junk silver, he'd probably offer you a multiple of 9 to 11 for it depending on what his inventory is at the time, and again, how good your negotiating skills are. That's how he makes a living.
Personally, I'd never buy precious metals online. There's no negotiating with an online dealer, and you leave a paper trail on every transaction. Usually any decent size town will have gold/silver dealers, along with pawn shops who deal in precious metals.
To my thinking, junk silver, or any precious metal for that matter, should be looked at as a prep or insurance, rather than an investment to profit from. After all, you have no assurance which direction the pricing will go over any span of time. It's apparent to many that precious metals are being suppressed by TPTB to keep the dollar looking good, particularly since it's beyond simple economics that it costs more to mine/refine silver than today's spot price. Something just ain't right about that. Don't think precious metals can't be price manipulated, in 1980 the Hunt brothers tried cornering the silver market, and before they were caught doing it had run the price up to $48.70/ounce, but it plummeted to $11.00 when they missed a margin call.
So, if silver is so volatile, why buy it at all? Well, it's only volatile against the dollar, and then only under either manipulated or severe economic conditions. If you consider that silver is a commodity, to be valued against other commodities and not the dollar it starts to make sense. For instance, if 2000 years ago an ounce of silver was equal in value to 20 pounds of wheat, it still is. Case in point, today silver is $14/ounce, while a 50# bag of wheat is around $35.00. I could be off in my figures a bit, but when you consider nearly everything raw - chicken, cattle, grains, milk, etc. is a commodity just like PMs, their value against one another never changes a great deal other than in scarcity situations.
If we were to experience an economic meltdown, which is mathematically assured, we'll find ourselves in a barter economy. In a barter economy there is only one eventual method of general commerce, trading in portable and universally valued commodities - precious metals. The impossibility of an economy, even local, working through any other means is not only inconvenient, but proven unworkable thousands of years ago. An example would be you having an extra 20 chickens, but need a pig. The pig farmers in your area have extra pigs, but don't need your chickens. Instead, the pig farmers need corn. The guy with the corn doesn't need pigs, but does need cooking oil. By using precious metals for barter the pig farmer gets silver, which he uses to buy corn, which the corn farmer uses to buy his cooking oil, and you didn't have to haul 20 chickens all over the county trying to find a pig farmer that needed them.
Why junk silver and not bullion silver or gold? Ease of commerce. If you've got even the smallest standard size of gold, 1/10 ounce, at today's price it's worth $120. If the wheat farmer you're buying $40 worth of wheat from doesn't have change, and you don't need 120 pounds of grain, no trade. Silver, being less valuable, and in easily recognized denominations, is just more convenient and conducive to small purchases/trades.
So, that's my understanding of junk silver. Please feel free correct any mistakes, or ask any questions.
The term junk silver applies to all silver coins (with the exception of silver dollars) minted in 1964 or before. These coins contain 90% silver, whereas coinage minted after 1964 is full of alloy of little value.
When dealing with precious metals, keep in mind they're valued in TROY ounces, rather than the standard ounce. A Troy ounce is 91% of a standard ounce. So, if you were to buy 100 standard ounce of coins (in any denomination) you would multiply by .9 to get standard ounce silver content, then multiply by .91 to find the Troy ounce. Today's spot silver price is $14.17/troy ounce, so 100 standard ounce gross coinage weight would figure to 81.9 troy ounces X $14.17 = $1160.53.
When buying junk silver nearly all dealers charge by face value multiplied by a varying figure, depending on spot price as of that day. For instance, when spot price is about $14.50/troy ounce, expect to pay 14 or 15 times the face value of the coins. A dime for instance would cost you between $1.40 to $1.50 depending somewhat on your negotiating skills, and how flexible the dealer is. At today's spot price, probably a fair deal is face times 13.5. However, if you were to go to that same dealer to sell your junk silver, he'd probably offer you a multiple of 9 to 11 for it depending on what his inventory is at the time, and again, how good your negotiating skills are. That's how he makes a living.
Personally, I'd never buy precious metals online. There's no negotiating with an online dealer, and you leave a paper trail on every transaction. Usually any decent size town will have gold/silver dealers, along with pawn shops who deal in precious metals.
To my thinking, junk silver, or any precious metal for that matter, should be looked at as a prep or insurance, rather than an investment to profit from. After all, you have no assurance which direction the pricing will go over any span of time. It's apparent to many that precious metals are being suppressed by TPTB to keep the dollar looking good, particularly since it's beyond simple economics that it costs more to mine/refine silver than today's spot price. Something just ain't right about that. Don't think precious metals can't be price manipulated, in 1980 the Hunt brothers tried cornering the silver market, and before they were caught doing it had run the price up to $48.70/ounce, but it plummeted to $11.00 when they missed a margin call.
So, if silver is so volatile, why buy it at all? Well, it's only volatile against the dollar, and then only under either manipulated or severe economic conditions. If you consider that silver is a commodity, to be valued against other commodities and not the dollar it starts to make sense. For instance, if 2000 years ago an ounce of silver was equal in value to 20 pounds of wheat, it still is. Case in point, today silver is $14/ounce, while a 50# bag of wheat is around $35.00. I could be off in my figures a bit, but when you consider nearly everything raw - chicken, cattle, grains, milk, etc. is a commodity just like PMs, their value against one another never changes a great deal other than in scarcity situations.
If we were to experience an economic meltdown, which is mathematically assured, we'll find ourselves in a barter economy. In a barter economy there is only one eventual method of general commerce, trading in portable and universally valued commodities - precious metals. The impossibility of an economy, even local, working through any other means is not only inconvenient, but proven unworkable thousands of years ago. An example would be you having an extra 20 chickens, but need a pig. The pig farmers in your area have extra pigs, but don't need your chickens. Instead, the pig farmers need corn. The guy with the corn doesn't need pigs, but does need cooking oil. By using precious metals for barter the pig farmer gets silver, which he uses to buy corn, which the corn farmer uses to buy his cooking oil, and you didn't have to haul 20 chickens all over the county trying to find a pig farmer that needed them.
Why junk silver and not bullion silver or gold? Ease of commerce. If you've got even the smallest standard size of gold, 1/10 ounce, at today's price it's worth $120. If the wheat farmer you're buying $40 worth of wheat from doesn't have change, and you don't need 120 pounds of grain, no trade. Silver, being less valuable, and in easily recognized denominations, is just more convenient and conducive to small purchases/trades.
So, that's my understanding of junk silver. Please feel free correct any mistakes, or ask any questions.