What would happen to the economy if silver coinage began circulating again?

coinfreak499

Also, what would change in the coin market. I assume that silver coins would go down in cost. Does anyone have any deeper thoughts on this subject?

Baley

anything different gets saved. if there was silver in the coins, nobody'd spend them.

mrearlygold

You mean if the dollar was backed by metal?

The government would find it very difficult to manipulate the currency and rip us off as much as they do.


Tom

ychange

the old pre-65 silver would not go back into circulation, the price on them would be wrong. i think the value of these coins would stay the same or go up, as interest in "silver as money" came back to the average guy.

imo, the only way to do it though would be to burn all the $1s, $5s, and $10 FRNs, and replace them with the Sac, and a $5/$10 silver piece. the $1s should be burnt anyway, and replaced. (having spent time on the loonie/twonie system in canada, i laugh when i see $1 bills and think we blew it, they can be removed.)

realistically, i don't think there is enough silver around to do this without playing utter havoc with the commodities market (like a big brother version of the Hunt brothers and co.) to do it the U.S. would be setting the price of a commodity, something far beyond our control now. it's hard enough controlling the "dollar" as it is, forget about silver as well, or gold, they must float freely in a market (ha.)

dthigpen

If the metal value of currency is higher than the face value, it will more than likely trade for metal value.

mhammerman

Yes, it would be extreemly satisfying to see real silver circulating again. Yes, people would hoard them but if we just keep flooding the market with them then the demand, at some point, would allow for the to circulate. Even the small piece of copper in the penny was too much to circulate without people grabbing it up. It was costing the mint a fortune, still does and they are not particularly valuable to commerce or to individuals but that is another debate. It was also very expensive to make pennies, with real copper and all. That was the last piece of valuable metal that circulated and probably the last one that ever will in the US.

I think the bimetal ideas that were recently posted provide an excellent opportunity to put a little metal into the money again but the problem is that everyone would strip the silver part away and sell that. It would be wonderful but in these modern times, there is no way it would be prudent.

But...if silver ever did circulate again, I would love it! Wouldn't it be cool to have coinage that had intrinsic value.

flaminio

The only way this could happen would be if an exceedingly massive silver load were discovered, flooding the market and bringing the price of silver down to base metal levels. Like if aliens with anti-gravity technology soft-landed an asteroid of solid silver in the middle of the desert. Yeah, it's about that likely.

GAT

For the pre 1965 silver coins to circulate silver would have to drop to the old 95 cents per oz price level. Otherwise the coins would be hoarded and fast disappear from circulation.

By the way, over a billion ozs of silver has been mined from the giant Sunshine Mine in Kellog, Idaho and vast reserves remain.

stockwiz

I don't think there is enough silver in the world to do this if what I've read is true.. less silver above ground then gold.. take a look at the writings of Ted Butler which I have been following since early 2003... he makes the argument for higher prices based on governments foolishly dumping stockpiles at cheap prices and the options market manipulating the price downward because it's so much larger then the physical market....

http://www.silver-investor.com/

We are already buying silver for our silver eagles program on the open market, since our 6 billion ounce stockpile we had after world war two is now gone... we'd have to continue buying, and supplies are tight. I've hoarded some silver back when it was at $4.50 per ounce for this very reason. Sure there is silver in the ground, but it can't be mined profitably at these prices... sure companys say they can mine it for $3 an ounce, but I don't see them doing it, and making mony at the same time.. most mined silver is a biproduct of other metal mining, base metals mostly.

Plus our currency is so ridden with debt that I don't see how it would be possible to introduce backed currency without an overhaul of the system... unless you are just talking about some coins being silver, like 10 or 20 dollar coins instead of notes, and not trying to back the entire currency with metal, which I don't believe is possible.


I wouldn't worry about older silver coins losing value.. since silver would only go up in price if such a thing occured, melt value would increase, and there would be a neglegible impact on numismatic value... that's what I love about coins... great store of value because populations rise, inflation takes it's toll, but there are only so many coins ever minted of a certain date.

Neptune

What would happen to the economy if silver coinage began circulating again?

Do you mean if people started using their silver coins to pay for things like food and gas? That would mean that the economy has gone to 'sheesh'.

coinfreak499

Sorry, I'll re-phrase: What would happen the mints started making silver cons for circulation?

sumnom

What would happen the mints started making silver cons for circulation?

I think they should stay in jail.

PhillyJoe

I would be happy with TRACE amounts of silver in our coins. Silver has been used for coinage since 1792 and it was a MAJOR decision to discontinue it in 1964. Coins should be made with silver, but at $6-7.00 an ounce, A quarter with one-tenth of an ounce of silver would have a melt value of 3 times the face value! Not gonna happen.

The other catch-22 is that if the government figured out a way to make coins out of silver, even at a breakeven, the price of silver would double on the day of the announcement and the government would be forced to change it's mind all within 24 hours.

Also, there is "x" amount of silver on the earth. It's been mined for 3,000 years. How often are new reserves discovered? Where would the silver come from to support the coinage?

I like the idea of continuing the tradition, just don't think it can be done.

With respect to cons circulating, I'll agree with keeping them in jail.

Joe

NoGvmnt

Until we figure out a way to synthesize silver, IT WON'T HAPPEN!!!

But then if we did figure out a way to synthesize it, silver would become "fiat".

Jim