The dime?

Weiss

I was perusing an Indian website that sells high-karat gold jewelry, and saw several examples of the 1 gram gold coins popular now in that country. These sell for about $70--better than twice their gold value. We all know that smaller coins have higher relative premiums. But that's a heck of a mark-up. Especially considering this website and the Indian jewelry trade in general has mark-ups considerably smaller than their US counterparts.

And that got me pondering my now world-famous and plagiarized treatise on the superiority of pre-65 90% US coinage over all other silver vehicles.

If 90% pre-65 US coinage is indeed superior to other forms of silver (which it is), and smaller units of metals have higher premiums relative to their metal value (which they do), then the ultimate vehicle for silver is...

...the dime?

I've been sitting here considering arguments for and against that statement. Dimes have all of the benefits of other pre-65 coinage (recognized, known purity, unquestioned assay, divisible, numismatic, face value, etc., etc.) with the added benefit of being more flexible in terms of divisibility than any other US coin. Yes, there are more of them per $1000 bag. But that's the point, right? Weight-wise it's identical. It's just they're already separated into the smallest practical unit. Especially in a shtf scenario.

Imagine trying to "make change" with a silver eagle. You can always go up (10 dimes) you can't go down unless you get out the hatchet and start chopping.

Discuss

mkman123

nice stash! I went into that thread and read what you wrote. I agree about the 90% silver thing and am trying to stack as cheaply as possible, 90% halves, quarters, and dimes.

cars

I Agree with your thesis but it seems like the dime is the least wanted of the 90% silver for some reason. They were selling lower & less often than others a while back when they carried a premium.

Weiss

<< <i>I Agree with your thesis but it seems like the dime is the least wanted of the 90% silver for some reason. They were selling lower & less often than others a while back when they carried a premium. >>



Exactly. I'm guilty myself of picking 90% silver halves over dimes without hesitation. I've scoffed at dimes. Give me unc kennedys, forget everything else.

I think we (metals buyers) must carry our clad perceptions into the metals deal. You want change for a $10. You have the option of taking a two rolls of clad dimes or a roll of clad quarters. Which would you pick?

Two dimes and a few pennies on the ground. Stop to pick it up? Quarter on the ground. Stop to pick it up?

But that's not the way it should work in the metals world.

Now check this out:

Expenses are trending higher and higher year after year. Inflation, however small currently, always trends higher. Metals are trending higher year after year. At the same time, more silver is being traded in ETF form--theoretically backed by Good Delivery (1000 oz) bars. So demand is moving at light speed toward 1000 oz bars. Untold millions of 1-oz rounds, 1-oz bars, and "junk" 90% silver coins are being melted to feed the demand for 1000 oz bars.

How often do 1000 oz bars of silver get melted? I'd wager almost never. Once they're created, that's what they be.

Conversely, how many 1/2 oz, 1/4 oz, or 1/10th oz silver bars or rounds are being created now? How many silver dimes, silver quarters, and silver halves are being created now? Aside from collector pieces? Zero.

As I mentioned in the first post, the premiums on smaller units are outrageous. Imagine how much it would cost to make a 1/10th oz silver round today. It's already prohibitive. Now imagine the cost 10 or 15 years in the future.

And that's the beauty of the 90% silver dime. It would be prohibitive to make them now, and even if you did, they wouldn't have the backing of the US government or a face value. Yet we, the metals buyers, turn our noses up at them. They're the very 90% silver unit we should be squirreling away.

gecko109

Imagine how much it would cost to make a 1/10th oz silver round today. It's already prohibitive.




Not really. The dies and machinery would be the big cost upfront, but for a company that already has such equipment/ability to produce working dies, I'd wager that 1/10th oz silver rounds wouldnt cost more than melt + a few cents each to turn out in large quantity. If you make 4 or 5 hundred rounds, then YES, it is cost prohibitive. But if you made millions, it would cost just pennies each (above melt) to produce.

cars

MPM has recently started producing 1 gram, 1/10 oz & 1/4 oz silver and they sell them for a reasonable price. I always like 90% dimes myself in case of SHTF scenario.

Weiss

<< <i>MPM has recently started producing 1 gram, 1/10 oz & 1/4 oz silver and they sell them for a reasonable price. I always like 90% dimes myself in case of SHTF scenario. >>



http://www.monarchpreciousmetals.com/index.php?option=com_virtuemart&page=shop.browse&category_id=16&Itemid=53

Quantity Price
1 - 49 $3.21
50 - 99 $2.96
100 - 999 $2.71
1000 - 9999 $2.51

$3.21 for $1.70 worth of silver is very nearly double the value of the silver. Even at 1000 pieces you're looking at 50% more than the silver value. And as I said, that's without the recognition, numismatic value, backing of the US, and face value. If 50% to 100% above the value of the metal doesn't qualify for "prohibitive", at least from an investor standpoint, I don't know what does.

90% dimes trade at melt.

Weiss

Though I was clearly wrong about whether or not they were being made today

jmski52

I started thinking that I should have some smaller denomination silver last spring, so I bought $250 face in dimes.

But, in all likelihood if silver becomes any kind of monetary exchange medium, it is just as likely that we will be taking our 1 oz. or 10 oz. silver and exchanging it for fiat before spending it.

Either way, whether you spend it directly or indirectly - I think that silver holders will have a massive advantage over those who are trying to yank their money out of mutual funds, 401Ks, ETFs at the drop of a hat.

I think that there will be liquidity problems at the street level, in addition to lots of paper losses. Just my humble opinion, of course.

Overdate

I like circulated Barber dime rolls, which carry only a slight premium over Mercs and Roosies.

Some modern silver proof dime rolls (such as 2004-S) are also available at little or no premium to common circulated silver dime rolls.

Weiss

I like the idea of modern proof silver dimes at melt except that it would nix one of the selling points of pre-65 90%: the date. If you're concerned with a SHTF scenario, there would have to be at least a little bit of concern that non-numismatists (hell, even some coin people) wouldn't recognize them as 90%. Even with an all silver rim, they might be suspect. It might be a minor point to us now, but it could be significant depending on how seriously you take silver as a SHTF prep.