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Are bags of junk silver as liquid as silver American eagles?
Longacre
Posts: 16,717 ✭✭✭
I received a newsletter via email from a dealer recently. Here is a cut and paste of part of the newsletter which indicates that junk silver in bags is a cheaper buy than SAEs. Does anyone know if the junk bags are as liquid in the marketplace?
******************************
Buying Silver?
We sell thousands upon thousands of
U.S. Silver Eagles with many buyers
picking them up because they feel
silver will go higher. If this applies
to you than there is a cheaper alternative
that you should consider. Pre-
1964 silver dimes and quarters, also
known as “junk silver” can be bought
for almost a full $1.00 less per ounce
and serve the same purpose. “Junk
Silver” is sold by the bag, each bag
containing $1,000 face value of pre
1964 silver coins. Half bags and
quarter bags are also available.
Prices for each are listed just before
the coin listings in this issue.
******************************
Buying Silver?
We sell thousands upon thousands of
U.S. Silver Eagles with many buyers
picking them up because they feel
silver will go higher. If this applies
to you than there is a cheaper alternative
that you should consider. Pre-
1964 silver dimes and quarters, also
known as “junk silver” can be bought
for almost a full $1.00 less per ounce
and serve the same purpose. “Junk
Silver” is sold by the bag, each bag
containing $1,000 face value of pre
1964 silver coins. Half bags and
quarter bags are also available.
Prices for each are listed just before
the coin listings in this issue.
Always took candy from strangers
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
0
Comments
In my experience, junk bags carry a significantly smaller premium, if any, over eagles.
In terms of liquidity, I think silver eagles might beat junk silver, but just by a smidge. Anyplace that would buy one would buy the other, but my perception is that it's a little easier to sell eagles online.
--Severian the Lame
Where?
--Severian the Lame
<< <i>Are bags of junk silver as liquid as silver American eagles? >>
What's the difference?
Liquidity and profitability are not necessarily the same thing. Liquidity is how quickly you can dispose of an asset (at a reasonable, but not necessarily profitable, price). So yes, if you buy a silver eagle for $10 and sell it for $9 to the first person you approach, it's very liquid (if not very profitable!).
Unless you can get them for spot.
As far as liquidity, both are fairly equal in my experience. There are many small investors who actually want Silver Eagles.
Personally, I prefer melt silver coins. I also prefer that term over "junk" silver.
To me, junk silver is flatware, tea sets, candleholders, etc.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
I strongly disagree -- for many people and goals, they are excellent. First, if you buy them in bulk, like in a mint sealed case, their price over spot can be reduced substantially. But even without that, you get some beneifts that I feel are more than worth it.
First, if your goal is catastrophe insurance, government issued bullion holds a legitimacy and recognition second to none. No assayers will be needed like with other forms of bullion. Most people recognize that form of bullion (coins) more than bars and rounds stamped by some company that is, to almost all of them, unfamiliar in brand or as a medium. Eagles, especially mint tubes and cases, take on some numismatic value over time. Over a certain amount of years that alone negates the premium over spot. Also, government issued bullion has a spendable monetary value unlike rounds and bars, as well as great purity (like the Maples). Other forms of bullion have advantages no doubt, but to say Eagles are horrible is simply incorrect.
Worry is the interest you pay on a debt you may not owe.
It's great to see thoughtful responses and to get perspectives that you might not think about at first glance.
--Severian the Lame
<< <i>Are bags of junk silver as liquid as silver American eagles? >>
If you melt them both at a hot enough temperature, yes.
<< <i>
<< <i>Are bags of junk silver as liquid as silver American eagles? >>
If you melt them both at a hot enough temperature, yes.
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
<< <i>It wasn't THAT funny, and don't encourage HIM. >>
I find physics humor QUITE funny, thank you
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
<< <i>It wasn't THAT funny, and don't encourage HIM. >>
*snif*
Why? The potential for finding neat coins.
In 1995, I bought two $500 face value bags of walkers from F J Vollmers. I was shocked that one of the bags had nearly $400 of AU/BU walkers mixed in. Try ever gettting that kind of a pleasant surprise with SAE's.
But I really
but that's just me
<< <i>I have a question for people who buy and sell $1,000 face value silver bags. Does the buyer usually open the bags to count the silver to make sure there is a full $1,000 in it or do they just weigh it? Also, does the buyer check for clad coins which may be mixed in with the silver? >>
Melt silver coins are always counted. Even in sealed bags.
Dealers have machines for that, doesn't take long at all. Some larger machines can count at incredibly fast rates.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>"Silver Eagles are a horrible way to invest in silver bullion. If that's your intent."
I strongly disagree -- for many people and goals, they are excellent. First, if you buy them in bulk, like in a mint sealed case, their price over spot can be reduced substantially. But even without that, you get some beneifts that I feel are more than worth it.
First, if your goal is catastrophe insurance, government issued bullion holds a legitimacy and recognition second to none. No assayers will be needed like with other forms of bullion. Most people recognize that form of bullion (coins) more than bars and rounds stamped by some company that is, to almost all of them, unfamiliar in brand or as a medium. Eagles, especially mint tubes and cases, take on some numismatic value over time. Over a certain amount of years that alone negates the premium over spot. Also, government issued bullion has a spendable monetary value unlike rounds and bars, as well as great purity (like the Maples). Other forms of bullion have advantages no doubt, but to say Eagles are horrible is simply incorrect. >>
We were talking about government issued 90% silver coins versus Silver Eagles. Bullion isn't part of the equation here. You don't need an assayer with US coins either.
Numismatic value? Not in my real world experience. An '88 isn't worth any more than an '04.
They are indeed a horrible way to invest in bullion due to the premium added on by the mint and the way they are distributed to the public. They are a guaranteed money loser, thus I call them a horrible investment. Would I rather buy approximately 80 Silver Eagles or a 100 ounce bar for the same amount of money? The answer seems fairly straightforward to me. To each his own, I suppose.
I have several hundred stashed away, but only because I was able to buy them at spot price.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Get a Kitco pool account and trade on line.
RR
Anyone buying silver for industrail use would not be buying silver eagles or junk silver as the premiums are too high for that purpose.
WH
<< <i>
<< <i>"Silver Eagles are a horrible way to invest in silver bullion. If that's your intent."
I strongly disagree -- for many people and goals, they are excellent. First, if you buy them in bulk, like in a mint sealed case, their price over spot can be reduced substantially. But even without that, you get some beneifts that I feel are more than worth it.
First, if your goal is catastrophe insurance, government issued bullion holds a legitimacy and recognition second to none. No assayers will be needed like with other forms of bullion. Most people recognize that form of bullion (coins) more than bars and rounds stamped by some company that is, to almost all of them, unfamiliar in brand or as a medium. Eagles, especially mint tubes and cases, take on some numismatic value over time. Over a certain amount of years that alone negates the premium over spot. Also, government issued bullion has a spendable monetary value unlike rounds and bars, as well as great purity (like the Maples). Other forms of bullion have advantages no doubt, but to say Eagles are horrible is simply incorrect. >>
We were talking about government issued 90% silver coins versus Silver Eagles. Bullion isn't part of the equation here. You don't need an assayer with US coins either.
Numismatic value? Not in my real world experience. An '88 isn't worth any more than an '04.
They are indeed a horrible way to invest in bullion due to the premium added on by the mint and the way they are distributed to the public. They are a guaranteed money loser, thus I call them a horrible investment. Would I rather buy approximately 80 Silver Eagles or a 100 ounce bar for the same amount of money? The answer seems fairly straightforward to me. To each his own, I suppose.
I have several hundred stashed away, but only because I was able to buy them at spot price. >>
Not to beat a dead horse, but I agree.
Why needlessly throw away money on
the spread if you want to play in
physical siver. The Kitco pool is great
but I like holding my pm assets.
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
Despite this experience, I still prefer to hold the junk silver.
$1000 of FDR dimes would be less silver than $1000 of 64 halves?
WRONG! WRONG!
People continually get this issue of liquidity wrong.
Spread is a measure of liquidity, period. When people analyze silver investments they think that if they are buying silver that has the lowest price per ounce that they are getting a "good" deal. This could not be further from the truth. Silver is an illiquid investment, so you need to pay special attention to liquidity.
Below is the buy/sell information for eagles and junk silver taken directly from California Numismatics Investment website, this tells you what they are willing to sell for and what they are willing to buy for:
US Silver Eagles 500 ct box BUY: $5075.00 SELL: $5275.00
This represents a spread of 3.5%
$1000 face 90% BUY $6,100 SELL: $6,450.00
This represents a spread of 6%
Silver eagles are MORE liquid than $1000 face bags. Furthermore, the better way to look at it is this way: If I go to CNI and buy a $1000 face bag, and then resell it to them immediately, then I will "lose" 6% of my money. If I do the same with a 500 ct box of eagles I will "lose" 3.5% of my money.
Now, which one is the better investment????
Spread is the best way to analyze a silver investment because it takes into account both the buy AND sell side of the equation. When you only look at the cost per ounce of silver, then you are only looking at the buy side.
The reason some forms of silver are priced so close to spot is because they are the least demanded form of silver, they invariably are also the ones discounted the most when you go to sell.
None of this is my opinion, it is a fact that is backed up by what the current buyers/sellers of silver are willing to buy and sell the different forms of silver for. If you research some of the other large sellers/buyers of silver (APMEX/Tulving, etc) the story is exactly the same.
Basing your silver investments off of what your local dealer is willing to buy and sell for is a major mistake because it does no represent the overall silver mkt.
When making an investment, you cannot just look at what you pay for something; you must take into account what the mktplace is willing to buy it back from you at.
Box of 20
$1000 bags are 8.94 per oz based on a 712 oz silver per 1000 dollar bag.
10 percent copper in the 1964 kennedy.
question how much is copper selling for these days?
Despite what some on this board will knee-jerk about purity and the cost to refine, 90% and 40% halves have an established market that already takes their respective purity into account. They might sell at a discount, but something for nothing is a benefit to most people.
--Severian the Lame
Refining costs are a factor. Nothing knee-jerk about it and to imply such is an insult.
Try selling a bag of 40% melt coins to a dealer and tell him you expect to be paid for the copper value as well. You may get laughed at, at the very least he's going to wonder if you are actually serious or simply deluded.
The only way you are going to realize any value for the copper is if you are smelting and refining them yourself.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
In my experience, 90% silver typically trades at a narrower gap than the example you gave. I just checked Dollar Towne. They're buying at $5750 and selling at $5870 (about a 2% spread). Engle's is buying at $5750 and selling at $5950 (just under 3.5% spread).
WH