My world-famous treatise on 90% silver
Weiss
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I'd been working on revisions to this treatise over the last several months. Put it on the back-burner and forgot about it until Timbuk3's post about the various forms of silver vehicles.
Pre-1965 US 90% silver coins –the very best way to own physical silver. Period.
Pre 1965 US 90% silver is the best choice for investing in physical silver for the same reasons it's always been the best choice. We’ll take a look at some of the reasons below. Consider that these points are valid during relatively prosperous and stable economic times, and that they become even more important in dangerous political or economic environments.
A) Recognition. Everyone in America, and a large percentage of the world’s population, recognizes and are familiar with the US dollar and US coinage--even people who don't know anything about precious metals. But the majority of the US population has no idea what a gold eagle or gold buffalo is, let alone an Austrian Philharmonic or Chinese Panda. And they’ve probably never interacted with a silver eagle, either. They don’t understand what it represents or how it relates to everyday goods and services. And if the average person can’t recognize foreign bullion coins, or even US bullion coins, how could they possibly recognize one of the thousands of generic silver bars or rounds?
But they would they recognize a United States dime or quarter in a heartbeat.
Divisibility. US 90% silver is already roughly 1/10th ounce (dime), 1/4th ounce (quarter), ½ ounce (half), and 1 ounce (dollar) increments. A half dollar contains twice as much silver and is therefore valued at twice as much as a quarter. A half dollar contains five times the silver of a dime, and is therefore valued at five times as much as a dime. You don’t need to estimate, cut, and weigh a piece from a larger bar to create the fraction you need, or re-weigh and agree (or disagree) on the weight for each subsequent transaction. One silver dime is the same as the next silver dime, this transaction and next transaction, and the next and the next. And this pre-established, fractional nature of US 90% silver plays just as important a role in scenarios where you’re selling US 90% rather than exchanging it directly: What if the market spikes and you want to take some profit, or you have an opportunity you want to take advantage of? What if you have an emergency and you must exchange your holdings for cash? If you have US 90% silver, you can simply count the exact weight you need from your US 90% silver holdings to the nearest .07234 of an ounce (the weight of a 90% silver dime) without touching the balance. You can’t do that if you only have 10 ounce or 100 ounce silver bars, rolls of silver eagles (or even a single silver eagle), without cashing in more than you need to. Now consider that if you’re forced to sell because of an immediate need, you may be selling at a loss. Selling more than you have to means taking more of a loss than you need to. And when the need is passed and you can finally reacquire the silver you sold, you may be buying at a higher price to replace the amount you didn’t need to sell in the first place. Owning US 90% silver allows you to move very small, precise amounts because of its divisibility vs. most other silver vehicles.
C) Purity. The alloy and silver content of US 90% is hallmarked by one of the largest and best-known assayers in the world: The US Mint. Their product purity is unquestioned going back to their first release in the 1790s. And the 170-year old ratio of nine parts silver to one part copper is tried, tested, and proven for its stability and durability.
D) Face value. 90% US silver has been, is currently, and always will be accepted by anyone taking US money in exchange for goods or services, because the US has never devalued its currency. A dollar minted in 1797 is still legal tender and can be spent. And though its metal value and numismatic (coin collector) value are worth substantially more than its face value, that face value of $.10, $.25, $.50, and $1.00 provides a bottom below which the value of US 90% can never fall—because if you have to, you can simply spend these coins for the amount indicated on each coin. That never devalued, always honored face value adds to the desirability of these pieces in a way that generic or foreign bullion will never benefit from.
E) Numismatic value. Not every piece and not every grade of every coin has numismatic value--at least not yet. But many do. And almost all have that potential for one very good reason: Despite its many positive attributes, US 90% is constantly being melted. A major reason for this melting is that, for those who deal in futures and options contracts on the rapidly expanding major global precious metal markets, only massive 1,000 ounce .999 pure silver “Good Delivery” or “LBMA” (London Bullion Market Association) bars are traded. These bars are impractical for the average silver investor for the many reasons stated in this treatise (not to mention their minimum cost currently in the tens of thousands of dollars each and sheer weight approaching 70 pounds!) Nevertheless, these large bars are a requirement of international silver commodity transactions. That means more of the finite supply of US 90%--now over 50 years since it was last produced--makes its way to the refiner’s crucibles every day to satisfy the growing demand for these massive bars. Sadly, mass-meltings are nothing new. There have been several periods of mass meltings in the last 40 years, coinciding with each run-up in the value of silver. It’s clear that the supply of 90% US silver is declining rapidly. And brilliant uncirculated and/or early 90%, like Barber coinage, walking liberty half dollars, and even Franklin halves, is much more scarce than most people realize. The pool of extant 90% US silver will continue to shrink as it’s melted to produce these LBMA bars and all of the other needs of the silver industry. And that creates a dichotomy that most investors fail to grasp: The finite and dwindling supply of US 90% silver decreases every day as it’s melted (making it more rare), while the supply of all other new bullion pieces increases as more are produced (making them less rare).
F) Low premium. Despite its numerous advantages, 90% US silver doesn't usually carry a heavy premium—that’s the amount dealers charge to make a profit over the value of the metal itself—relative to other forms of silver bullion. It can even be found with no premium at times because some dealers don’t appreciate its benefits and unload it at the first opportunity. And even when it is sold with a modest premium, 90% US silver dimes, quarters, and halves carry a much smaller premium than fractional silver bullion pieces carry.
G) Low minimum investment. US 90% silver is literally one of the lowest minimum investment vehicles in existence. Even those on a limited budget can buy small quantities of US 90% silver for the price of a cup of coffee. It’s easy to add to a physical stockpile over time with these small investments.
H) Trustworthiness. Because of its small size, ease of recognition, and relatively low value per piece, 90% US silver is one of the least profitable and therefore least tempting targets for counterfeiters here and abroad. That’s not true of gold coins, gold bars, or silver bars, which have all been “drilled & filled” (drilled out, metal removed and filled with base metal). That type of deception would be difficult and much less cost-effective with 90% US silver coins. And because of how familiar we are with US coinage, any suspect pieces that are produced would be much easier to distinguish than fake silver bars or gold coins, which fewer people are familiar with.
Those of us who have experience with US 90% silver are familiar with its attributes. But even those who are less experienced with it can learn these attributes quickly and easily. With no special equipment, balance beam, scratch or acid test or water displacement, we can tell to a very good degree if US 90% silver is real. We can check visually: Is it a US coin? Is it the same size and shape as every other coin in the series in our possession? Are the surfaces uniform? Is there any pitting, flaking, or any other indicator of tampering or inauthenticity? Does it have a pre-1965 date? Is the edge of the coin solid silver in color (as opposed to the sandwiched layers of later non-silver “clad” coinage)? We can check by touch: Does it have the right heft, the same as others we know to be authentic? Are the reeds--the small lines along the outer edge--all present? This feature was added to coinage centuries ago to thwart “shaving” minute amounts of metal from the edge of coins. We can even tell, with some practice, by sound. US 90% silver coinage makes a distinct high-pitched ring when dropped on a hard surface. Fake or base-metal coins tend to make a “thud”.
While none of these tests alone may be 100% fool-proof, combined they give us a powerful and highly accurate series of tests which require no special equipment and which are virtually instantaneous. That’s not the case with any other precious metal vehicle.
And it's no coincidence that these factors are there. These built-in tests have come about from literally thousands of years of trial and experimentation, representing untold billions of transactions with silver coins in virtually every society on earth. Weaknesses exploited by the most cunning criminals in the world, corrected, improved, tried, corrected, improved, etc. until they are as perfect as can be and where all of these factors function automatically without us even thinking about them. They are, to a very large degree, why we value silver in the first place: Its rarity and difficulty to counterfeit makes it a valuable and desirable vehicle for holding or transferring wealth.
Copyright 2016 The Electrum Group, Inc.
Pre-1965 US 90% silver coins –the very best way to own physical silver. Period.
Pre 1965 US 90% silver is the best choice for investing in physical silver for the same reasons it's always been the best choice. We’ll take a look at some of the reasons below. Consider that these points are valid during relatively prosperous and stable economic times, and that they become even more important in dangerous political or economic environments.
A) Recognition. Everyone in America, and a large percentage of the world’s population, recognizes and are familiar with the US dollar and US coinage--even people who don't know anything about precious metals. But the majority of the US population has no idea what a gold eagle or gold buffalo is, let alone an Austrian Philharmonic or Chinese Panda. And they’ve probably never interacted with a silver eagle, either. They don’t understand what it represents or how it relates to everyday goods and services. And if the average person can’t recognize foreign bullion coins, or even US bullion coins, how could they possibly recognize one of the thousands of generic silver bars or rounds?
But they would they recognize a United States dime or quarter in a heartbeat.
Divisibility. US 90% silver is already roughly 1/10th ounce (dime), 1/4th ounce (quarter), ½ ounce (half), and 1 ounce (dollar) increments. A half dollar contains twice as much silver and is therefore valued at twice as much as a quarter. A half dollar contains five times the silver of a dime, and is therefore valued at five times as much as a dime. You don’t need to estimate, cut, and weigh a piece from a larger bar to create the fraction you need, or re-weigh and agree (or disagree) on the weight for each subsequent transaction. One silver dime is the same as the next silver dime, this transaction and next transaction, and the next and the next. And this pre-established, fractional nature of US 90% silver plays just as important a role in scenarios where you’re selling US 90% rather than exchanging it directly: What if the market spikes and you want to take some profit, or you have an opportunity you want to take advantage of? What if you have an emergency and you must exchange your holdings for cash? If you have US 90% silver, you can simply count the exact weight you need from your US 90% silver holdings to the nearest .07234 of an ounce (the weight of a 90% silver dime) without touching the balance. You can’t do that if you only have 10 ounce or 100 ounce silver bars, rolls of silver eagles (or even a single silver eagle), without cashing in more than you need to. Now consider that if you’re forced to sell because of an immediate need, you may be selling at a loss. Selling more than you have to means taking more of a loss than you need to. And when the need is passed and you can finally reacquire the silver you sold, you may be buying at a higher price to replace the amount you didn’t need to sell in the first place. Owning US 90% silver allows you to move very small, precise amounts because of its divisibility vs. most other silver vehicles. C) Purity. The alloy and silver content of US 90% is hallmarked by one of the largest and best-known assayers in the world: The US Mint. Their product purity is unquestioned going back to their first release in the 1790s. And the 170-year old ratio of nine parts silver to one part copper is tried, tested, and proven for its stability and durability.
D) Face value. 90% US silver has been, is currently, and always will be accepted by anyone taking US money in exchange for goods or services, because the US has never devalued its currency. A dollar minted in 1797 is still legal tender and can be spent. And though its metal value and numismatic (coin collector) value are worth substantially more than its face value, that face value of $.10, $.25, $.50, and $1.00 provides a bottom below which the value of US 90% can never fall—because if you have to, you can simply spend these coins for the amount indicated on each coin. That never devalued, always honored face value adds to the desirability of these pieces in a way that generic or foreign bullion will never benefit from.
E) Numismatic value. Not every piece and not every grade of every coin has numismatic value--at least not yet. But many do. And almost all have that potential for one very good reason: Despite its many positive attributes, US 90% is constantly being melted. A major reason for this melting is that, for those who deal in futures and options contracts on the rapidly expanding major global precious metal markets, only massive 1,000 ounce .999 pure silver “Good Delivery” or “LBMA” (London Bullion Market Association) bars are traded. These bars are impractical for the average silver investor for the many reasons stated in this treatise (not to mention their minimum cost currently in the tens of thousands of dollars each and sheer weight approaching 70 pounds!) Nevertheless, these large bars are a requirement of international silver commodity transactions. That means more of the finite supply of US 90%--now over 50 years since it was last produced--makes its way to the refiner’s crucibles every day to satisfy the growing demand for these massive bars. Sadly, mass-meltings are nothing new. There have been several periods of mass meltings in the last 40 years, coinciding with each run-up in the value of silver. It’s clear that the supply of 90% US silver is declining rapidly. And brilliant uncirculated and/or early 90%, like Barber coinage, walking liberty half dollars, and even Franklin halves, is much more scarce than most people realize. The pool of extant 90% US silver will continue to shrink as it’s melted to produce these LBMA bars and all of the other needs of the silver industry. And that creates a dichotomy that most investors fail to grasp: The finite and dwindling supply of US 90% silver decreases every day as it’s melted (making it more rare), while the supply of all other new bullion pieces increases as more are produced (making them less rare).
F) Low premium. Despite its numerous advantages, 90% US silver doesn't usually carry a heavy premium—that’s the amount dealers charge to make a profit over the value of the metal itself—relative to other forms of silver bullion. It can even be found with no premium at times because some dealers don’t appreciate its benefits and unload it at the first opportunity. And even when it is sold with a modest premium, 90% US silver dimes, quarters, and halves carry a much smaller premium than fractional silver bullion pieces carry.
G) Low minimum investment. US 90% silver is literally one of the lowest minimum investment vehicles in existence. Even those on a limited budget can buy small quantities of US 90% silver for the price of a cup of coffee. It’s easy to add to a physical stockpile over time with these small investments.
H) Trustworthiness. Because of its small size, ease of recognition, and relatively low value per piece, 90% US silver is one of the least profitable and therefore least tempting targets for counterfeiters here and abroad. That’s not true of gold coins, gold bars, or silver bars, which have all been “drilled & filled” (drilled out, metal removed and filled with base metal). That type of deception would be difficult and much less cost-effective with 90% US silver coins. And because of how familiar we are with US coinage, any suspect pieces that are produced would be much easier to distinguish than fake silver bars or gold coins, which fewer people are familiar with.
Those of us who have experience with US 90% silver are familiar with its attributes. But even those who are less experienced with it can learn these attributes quickly and easily. With no special equipment, balance beam, scratch or acid test or water displacement, we can tell to a very good degree if US 90% silver is real. We can check visually: Is it a US coin? Is it the same size and shape as every other coin in the series in our possession? Are the surfaces uniform? Is there any pitting, flaking, or any other indicator of tampering or inauthenticity? Does it have a pre-1965 date? Is the edge of the coin solid silver in color (as opposed to the sandwiched layers of later non-silver “clad” coinage)? We can check by touch: Does it have the right heft, the same as others we know to be authentic? Are the reeds--the small lines along the outer edge--all present? This feature was added to coinage centuries ago to thwart “shaving” minute amounts of metal from the edge of coins. We can even tell, with some practice, by sound. US 90% silver coinage makes a distinct high-pitched ring when dropped on a hard surface. Fake or base-metal coins tend to make a “thud”.
While none of these tests alone may be 100% fool-proof, combined they give us a powerful and highly accurate series of tests which require no special equipment and which are virtually instantaneous. That’s not the case with any other precious metal vehicle.
And it's no coincidence that these factors are there. These built-in tests have come about from literally thousands of years of trial and experimentation, representing untold billions of transactions with silver coins in virtually every society on earth. Weaknesses exploited by the most cunning criminals in the world, corrected, improved, tried, corrected, improved, etc. until they are as perfect as can be and where all of these factors function automatically without us even thinking about them. They are, to a very large degree, why we value silver in the first place: Its rarity and difficulty to counterfeit makes it a valuable and desirable vehicle for holding or transferring wealth.
Copyright 2016 The Electrum Group, Inc.
We are like children who look at print and see a serpent in the last letter but one, and a sword in the last.
--Severian the Lame
--Severian the Lame
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That's not to say I couldn't argue against at least some of them--at least in some instances. You get offered several rolls of BU early date silver eagles with little premium, by all means, snap them up. Or if you find good quality generics at a discount of melt (which does happen from time to time), then you have to get those, too.
But pound for pound, given the choice that I see in the market and from what I see on the boards, 90% still makes the most sense.
--Severian the Lame
We need one of your world famous 90% silver collages.
Copyright 2016 The Electrum Group, Inc.
This the exact reason I love 90%. As for counterfeit, I hope they don't do it. If they start counterfeiting 90%, I won't know what to do.
Someone let this newbie down gently...
Weiss is no newbie. He has 10278 posts.
ghigh....90% U.S. silver coins have been counterfeited for years by our "friends" in
China. Rawteams comment, directed at you, is 100% "hit the nail on the head."
But it's pretty easy to pick out. Wrong size, wrong color, wrong sound.
How many fake 1964 half dollars have you seen? Or 1962 quarters?
The one or two pieces of fake 90% I've seen were just plain awful. By themselves they were bad. Next to the real thing they are laughable.
--Severian the Lame
The Chinese have certainly counterfeited 90%.
But it's pretty easy to pick out. Wrong size, wrong color, wrong sound.
How many fake 1964 half dollars have you seen? Or 1962 quarters?
The one or two pieces of fake 90% I've seen were just plain awful. By themselves they were bad. Next to the real thing they are laughable.
10 4...that holds true with most of their reproductions. However, to the "untrained eye" they can be deceiving. I was responding to rawteams comment and not to the wisdom of owning 90%
When the SHTF, people will gladly accept precious metals like US 90% (preferentially, as weiss points out). However, that willing acceptance will all but disappear after a month, maybe two. By then, folks will figure out that things are not going to get any better and PMs will become pretty useless. It's doom and gloom, but I think for the right scenario, it's how things will be.
For this reason, I don't stack a ton of silver or gold. Just enough to obtain whatever items are needed during the first month of a SHTF scenario before food, water, heat, ammo, etc become the means of trade.
To the extent that I stack at all, I prefer silver eagles and other one-ounce coins from established mints, at modest premiums above melt. In an emergency I think they will be as liquid as 90% silver coins, if not more so.
My Adolph A. Weinman signature
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
If you're a straight play investment stacker, who wants large quantities of marketable physical silver holdings, who has plenty of cash on hand, no worries about emergencies, and with little concern for SHTF scenarios, then 90% is probably not your first best option.
But that's a pretty specific category. And the points that might be seen as weaknesses to some (the 90% silver, 10% copper alloy, for example), might just as easily be seen as strengths to others.
Here's an example: There are lots of copper 1-ounce rounds and copper bars on the market lately. From 1/10th ounce to 100 kilo lots. Scan ebay and you'll find thousands of listings. Incredibly, you'll find closed auctions with good prices paid for these bars and rounds.
Now I personally don't stack copper. Have NO interest. But there is clearly a demand. And to be honest, I DO save all of my pre-1982 copper cents. Don't you?
That alloy that you think makes 90% less attractive is actually a way to stockpile copper--literally for free--with every piece of 90% you own.
Every $1000 face bag of 90%, which are traded daily sight unseen on sites like Apmex, JM Bullion, Provident, contains 5 pounds of pure copper at no cost. That's about seventy 1-ounce copper rounds.
Of course you could argue you'd have to smelt it. But do you? It's already there. Everyone knows it's already there. Everyone knows exactly how much is already there.
Copper has been almost $5 a pound recently. What if it spikes to $10? $15? Anyone who holds PMs for the long haul already believes prices of natural resources are going to continue to increase over time, not decrease. That's why they have them. Maybe to some people 90% is a great way to stack and hold good quantities of pure copper, too.
--Severian the Lame
Of course, none of this is either/or, I've still got a lot of .999 from that time too, generics as well as NCLT, and yes, some junk 90% too.
No reason to limit yourself to one kind of silver, if literally anything can happen in a SHTF scenario (as one defines it)
Liberty: Parent of Science & Industry
So, if there is a situation when silver becomes tradeable as a medium of exchange, I would expect two things - that people would get smart about the current market price of silver in a big hurry, and also that the price would accelerate as the distribution of it became widespread as a medium.
In that scenario, all recognizable forms would be pretty liquid and my point about people getting smart in a hurry about the value of silver would apply to 90% silver just as it would apply to most every other recognizable form. I suspect that there are still stockpiles of 90% silver coin that will be pressed into service one day, in particular during a currency event.
The colonies used all sorts of coppers as the basic currency unit and used a variety of silver coinage even though there was virtually no uniformity and no single issuing authority. People know how to adapt when need be.
I knew it would happen.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
At times in 2013-2015 the premium on 90% silver coinage was quite steep. Hard to believe but that's the way it was. At times it was hard to find, especially halves. And the 90% was right behind the ASE's (and major sovereign 1 oz silver like Maples, Libertads, etc.) as silver items having the most premium....outdistancing bars and even Engelhard 0.999 rounds. Silver bars were the least desirable, especially 10 oz and 100 oz bars. Those can be easily drilled or faked....a lot more easily than bags of 90% silver coin. I've bought 90% silver from my trusted dealer network and have yet to count anything over 100 oz. Just weigh it, inspect the contents, and be done with it.
If your local dealers are working on a 25% spreads like Baseball's dealers, then find some better ones. That's ridiculous. For the dealers I have worked with, the biggest spread on any bullion items is no more than 5% and often only 2-4%. Most coin shops are counting on unknowledgeable sellers. And they get plenty of them, especially one time players who found some stuff (inherited it) and just want to dump it quick. While your local coin shops are getting in $5K-$100K a week in routine bullion stuff, there are big outfits out there getting 7 figures a week than can afford to work on lower percentages. Buy and sell with them.
Knowledge is the enemy of fear
Maybe to some people 90% is a great way to stack and hold good quantities of pure copper, too.
War nickels work even better. Plus, you get the silver under melt plus some free manganese.
My Adolph A. Weinman signature
It's most definitely the case that most people have no clue about silver as money or it's former use as money.
I think they are starting to get a clue, judging by the demand for .999 bullion silver coins during the past few years. Around 70 to 80 million ounces are produced and sold annually, and I suspect very few are returning to the melting pot.
My Adolph A. Weinman signature
