Ripoff or not? Let's hear your argument

hchcoin

So the Canadian mint sells silver coins for face value here:

$20 for $20

$20 for $20 silver coins (99.99% pure) is a hugely popular series from the Royal Canadian Mint offered at face value. Past coins in this series sold out quickly, as $20 for $20 coins are currently the most affordable fine silver coins offered by the Royal Canadian Mint.

The coins themselves are 7.96 grams of silver which is .28 ounces. I was reading on the kitco forum how people think this is the biggest ripoff because you are paying $20 for less than 1/2 ounce of silver. On the other hand, the coin is legal tender and says $20 on it. How is this any different than paying $.25 for a United States quarter where the metal content is only worth a few cents?

Technically, someone could spend the $20 coin in Canada for $20 worth of goods or services. What am I missing?

derryb

With Canada's current economic state and the future of it's currency, a Canadian would be better off paying market price for a silver maple. He get's something for less than $20 that contains more than four times the amount of silver than does the $20 face coin.

Gotta look at future value. Common sense (at least in Canada) says go with one ounce of pure silver for less than $20 - it will always hold the value of one ounce of silver. The $20 coin will always only be worth .28 ounces of silver or $20 in a declining currency.

That said, the the $20 face value coin has a better future than $20 fiat Canadian currency. At least the coin, while always holding the same face value as the note, will never have less buying power than .28 oz. of silver. The US dollar's loss of buying power over time vs. the gain in buying power of a one ounce gold saint demonstrates the risk of any form of money that is not backed by at least some content of a precious metal.

hchcoin

Originally posted by: derryb
With Canada's current economic state and the future of it's currency, a Canadian would be better off paying market price for a silver maple. He get's something for less than $20 that contains more than four times the amount of silver than does the $20 face coin.

Gotta look at future value. Common sense (at least in Canada) says go with one ounce of pure silver for less than $20 - it will always hold the value of one ounce of silver. The $20 coin will always only be worth .28 ounces of silver or $20 in a declining currency.

That said, the the $20 face value coin has a better future than $20 fiat Canadian currency. At least the coin, while always holding the same face value as the note, will never have less buying power than .28 oz. of silver. The US dollar's loss of buying power over time vs. the gain in buying power of a one ounce gold saint demonstrates the risk of any form of money that is not backed by at least some content of a precious metal.

The last paragraph was what I was thinking when I saw what the Canadian mint was doing. It seems way better than the fiat currency that is backed by nothing but promises. I think the real scam is fiat currency.

tneig

Might be nice to have a few for collecting enjoyment.

The US price is $14.35ish. US silver spot value about $3.70
I checked ebay and regular ones are around $17.50 sold. But there are some expensive ones like the Lake Superior ones,
but that is all I know about the series.
Unless you were able to get a more rare one for under value and be able to sell for more.

I guess the key is:
Would any regular store in Canada recognize them and really take them w/o question?
Do they really end up or get used in circulation at all?

The US quarter can maintain its relative barter value for certain, regardless of metal value.

hchcoin

Should I have converted to troy ounces? 7.96 grams = .26 troy ounces = .28 ounces

My mistake

bronco2078

what you are missing is no one will take them for $20 in Canada.

They pulled that crap with the $5 and $10 olympic coins too

derryb

As legal tender, the banks would have to exchange them (take them as deposits, that are later withdrawn in other forms) even if merchants choose not to accept them.

bronco2078

from what I've heard they flat out refuse to take them

BBN

It would be a potential win if the USA did this except make it .2496 (or whatever the half eagle was). Win for both the government AND the buyer. It would never be worth any less than $20 and if silver shot up to like $100-150 then the value would just increase. If it were real legal tender and acceptable in commerce then it would make for a nice way to hoard cash.

Of course, in one's mind and the mind of investors and collectors, you would have to separate the metal aspect versus the face value. We are so geared to PMs having varying prices now that it may be hard to cut that in our culture.

OPA

You can always buy the $100 CAD...same gimmick, at face value (not sure if it has about 1 oz of silver in it)

jmski52

If the Canadian banks refuse to redeem them, it's a ripoff. Either it's legal tender or it's not.

s4ny

I understand that they cannot be spent or deposited.

VanHalen

Originally posted by: s4ny

I understand that they cannot be spent or deposited.

That changes everything. Well maybe not everything but still........thanks for the heads up.

roadrunner

You can buy a US silver dollar for approx $20, possibly even some BU peace dollars and 1921 Morgans. And those will have approx 3/4 oz of pure silver in them. Your choice if you want to spend them for the $1 face value or their $11.75 in silver value or their $20 collectible value. US 1 oz gold eagle's and Buffs are $50 "face value." Same with 1 Oz Canadian gold coins. Don't see too many people accepting $50 for them.



In perusing the RCM and US Mint sites it appears you still can't get a 1 0z gold AGE/Buff/Maple for a reasonable premium over spot. USMint is either sold out or out of stock, including 1 oz AGE proofs.

OPA

Coinupdate article on subject.

Face Value coins article