What happens to junk silver?

Barry

Posted this question in a related thread, but it got lost:

What happens to the junk silver a dealer buys? Does it really get melted down or just resold to someone else as junk silver?

Boom

Now is a good time to ask this question. I've been reading for years that the U.S. Mint had sorely depleted it's Silver supply and therefore bought a lot of junk silver at 3 times face just in case the sane scenario that transpired in 1979/1980 takes palce again. Not so very long ago I read that, indeed, it HAS been depleted, if not exhausted! I used to hang out at the Coin Shop all day and at first was mortified when I saw ,day after day, the proprietor cull through the Silver coinage he had purchased and would sack it up to sell to be melted down into "New Silver" "But...but -but," I stuttered, "You're gonna melt a lot of old coins, Man...that's almost sacriligious...what are you doing?" He explained about selling it for melt and, by the same token, creating a market for the finer pieces-therefore old mintage figures mean absolutely NOTHING! So, there you have my take on it...yes it is sold for melt -afterall these dealers have certain privileges with the Mint that most people do not! For example...buyimg Silver Eagles and to create a market for higher grade/ God knows how scarce, Silver coins. I am so glad I was able to convince him to save on shipping the stuff and instead sell a bunch to me!

hoardmonster

I've wondered about how many of certain coins do exist considering that they are sold and melted. Just for example, take the 1939 Mercury dime. There were 67.74 million of these minted. That's a very high number, but how many have been melted down? Are there 60 million left, or is it closer to 40? I really have no idea. For all I know, there could 2 or 3 million or even less left in existence.

Boom

WORD!

MadMonk

They sell them on the "Coin Vault" T.V. spot as rare coins!

morganbarber

I've told this story a million times on this forum, but here goes again. My father used to buy many bags of junk silver as an investment/hedge. He used to let me go through and look for better dates and trade in common dates. I found, in a bag of halves, a 1892-O Barber. The Obv. is a strong G. The reverse is somewhat weaker. I know that this is not a terribly valuable coin, but I shudder to think that the whole bag could have been melted without being searched.

BillJones

Some junk silver gets melted, and a certain amount of it will continue to be melted in the coming years. Alternatively, there is futures trading in $1,000 face value bags of 90% silver coins. It's a neat way to speculate in silver because the integrity of the metal is set without messy and expensive purity tests. I think that most junk silver will survive in coin form for many years to come.

meos1

It goes to the junk yard

Neptune

there is a book written about the big meltdown and it gives calculated figures about how many of each coin are (were) left afterwards - from an insider - can't remember name of it, but a realllllll good book to read. I checked it out at my library. Of course, if they are still a-meltin', then these figures will have gone down, as well.

OK I found it. If you haven't read it, this is a GOOD book to read!

call number: 737.4973 MER - 1983
The Big Silver Melt - by Merton, Henry A.

fishcooker

Why would the Mint deplete its silver supply and then go buy coin silver as a hedge against price rises?

Eagles are 0.999..... do they want coin silver to make silver proof sets? At $32 per set they have a pretty good markup on the silver content already!

ms70

They become tie tacs!

hoardmonster

<< <i>there is a book written about the big meltdown and it gives calculated figures about how many of each coin are (were) left afterwards - from an insider - can't remember name of it, but a realllllll good book to read. I checked it out at my library. Of course, if they are still a-meltin', then these figures will have gone down, as well.

OK I found it. If you haven't read it, this is a GOOD book to read!

call number: 737.4973 MER - 1983
The Big Silver Melt - by Merton, Henry A. >>



Thanks Neptune! I was wondering if there were any kind of estimates available. I will definitely have to get a hold of a copy!

ms70

That book sounds interesting! I'll have to pick up a copy. Maybe the author plans a new version.

Boom

Now if I were a gamblin' man....what am I saying? I AM A GAMBLING MAN....I'd wager that there is a standing agreement between certain dealers and the U.S. Mint. Being these dealers are given the right to distribute Silver Eagles, they , in turn, must supply the U.S. Mint with Silver! Makes sense!

Neptune

Yer welcome - when I went to the library looking for coin books, it was the only book they had - period! I was told that a lot of the coin books don't get returned, for some reason. If you can't find it at your libary, you can order it on an inter-library loan. You may need to wait a week or two to get it, but they can get it for you at no charge. This holds true for any book. Let me know after you read it, what you think! I found it not only very informative, but very interesting.

cladking

Usually there is a premium to melt for US silver coin so it's not economical to melt it.
Even when there's a discount it nmay not be profitable to melt if the discount is low.
There were substantial quantities of silver melted in '79-'80 but the refineries were
back logged for months so much of that silver never did get melted. Remember too,
that this run-up in '79 was very brief. It didn't get going well until August and was
over by mid-January.

Today most junk silver sells as junk silver to investors and the mint and most buyers
will get their silver from refineries and producers from newly mined silver and recycled
scrap.

Bear

The crime during the great silver rush was the melting of

proof coins. Cameos, Deep Cameos, in gem condition. With silver at 50 dollars

an ounce, who wanted to save proof silver coins. Rather sad when you think about it.

But money talks and collectors squeek.