Everyone talks about stockpiling precious metals as the way to survive in the current Great Depression. However, in delving deeply into this, I have been able to foresee some big problems that are sure to thwart us in our attempts to keep ourselves, as well as our loved ones, alive. So exactly what type of metals do we want to accumulate? Junk silver, or coinage consisting of silver, is a number one choice of many. But, as you will see shortly, attempting to utilize this method in order to stay alive can cause just the opposite effect and actually get you killed. Another dilemma is that the premiums charged on the most recognizable coins, which can be over $70 per one ounce gold coin, will cause you to go broke before you get an adequate stash put up.
My comments following the post I have reproduced in full below from the Utah Prepper's site will lay out a very simple plan to get around these problems and, at the end of this article, I will list the one way to very easily solve these problems. Pay special attention to the fellow in comment 4 and my responses, as it may very well determine the difference between life and death. Here is the article in it's entirety:
JUNK COINS, SILVER COINS, BULLION AND BARTERING
I’m trying to get this all figured out, it’s kind of confusing! Junk Silver, Silver Coins, Bullion Coins, Pre-1965 Coins – it turns out they all pretty much mean the same thing! Hard-Core TEOTWAWKI Preppers know that pre-1965 silver coins are made up of actual silver and have good potential barter power. That bartering capability comes from the fact that the U.S. Mint has guaranteed the amount of silver in these coins so they have a known value. Bullion Coins are generally considered the easiest way to have known values of precious metals – hence their potential barter usage. So far this is fairly common knowledge, but there is a lot more to know in order to do this properly – and I’m trying to get it all figured out.
This post is a learning post – I’m no expert in this area at all – I’m merely sharing knowledge as I gain it. The purpose here is for us to help each other out – if I’m wrong in something I say, please correct me in the comments! If you know about this area and can provide useful further info including knowledge, tips, websites, etc – please do! And if you’re just now reading this, please check the comments and consider them an extension of this post.
Now that that is out of the way, on to the discussion. I’ve been wanting to know more about this and recently have started researching it – I made my first purchase of Junk Silver at the Crossroads of the West Gunshow in Salt Lake on Saturday (Jan 11, 2009). It was a little thrilling because I really wasn’t sure if I was getting ripped off or not, but I wanted to get started on caching coins. I only bought $11.00 worth so it was a cheap, potential throw-away, experience. Turns out it wasn’t a bad deal. Let’s get into what I’ve learned about how this works.
According to Lynn Coins Junk Silver is organized into $1.00 values based on the face value of the coins. This means you can mix and match quarters, dimes, nickels, half dollars and dollars into batches. Each $1.00 face value batch of coins should have approximately 71% of a Troy Ounce of Silver in it.
From Wikipedia:
The most commonly collected U.S. junk silver pieces are Mercury and Roosevelt dimes, Washington quarters, and Franklin and Kennedy half dollars, minted in or before 1964. These coins have a 90% silver composition (”coin silver“), and when minted contained 0.7234 troy ounces of silver per dollar of face value. In practice, the content is usually assumed to be 0.715 ounces because of wear. Less common as junk silver are Kennedy half dollars from 1965 to 1970, which contained 40% silver. Peace Dollars may also be collected for their silver value, but are also less common.
Canadian dimes and quarters contained 80% silver (0.600 troy ounces per dollar of face value) until 1966. In 1967, they were minted in both 80% and 50% varieties. In 1968 they either contained 50% silver, or none at all (Cupro-Nickel). Dollars and half dollars were minted in 80% silver until 1967.
From this we learn the next critical part to gathering Junk Silver – PRE-1965 coins must be
used in most cases. Starting in 1965, the US quit using Silver and switched to a fiat currency.
So, as we’re gathering pre-1965 silver coins (how stinking hard is that going to be if you’re going through your pocket change?), how do we know what they’re currently worth? Coinflation.com provides us with a chart that shows the current silver value of different US coins based on their silver composition. That makes it easy. We can also look at live market rates for Silver on kitco.com – as of this writing, the Spot Price of Silver was at $11.25.
As I mentioned above, Junk Silver is not something you’re going to just find in the change you get at the gas station – at least not very often. For the most part you have to go to a coin dealer/trader in order to get accumulated quantities of Junk Silver. Here’s a quick list of Coin Dealers in Utah.
Supply and Demand of course plays a part in all this – every prepper that’s thinking about this topic is looking for Junk Silver to grab – and there’s a finite amount of them available. So, when you go to purchase your Junk Silver, keep in mind that the dealer is providing a valuable service – sorting, buying and collecting the pre-1965 Silver Coins and then providing you with a resource that has a limited quantity and a real value behind it. In other words, you’re going to pay more than the silver is worth on the market.
Here’s what I’ve learned about values in the Junk Silver Market – as of this writing, you should expect to pay about $11.00 per $1.00 face value of coins – this amounts to .7 Troy Ounces of silver – the current Spot Price of Silver is $11.25 per ounce. So, you should expect to pay about 30% or so markup on the actual spot price of silver – this is commonly referred to as the Price Over Spot.
Availability is definitely an issue right now, Junk Silver is HARD to find locally, especially in large quantities. Apparently it’s common for dealers to buy $1,000.00 face value bags of coins, but that costs a LOT of money. If you can’t find any at your local coin shop, Lynn Coin and probably several others will sell it to you in smaller bulk quantities. I’ve never dealt with them and cannot and am not recommending them. For bulk purchases, the fantastic SurvivalBlog.com recommends and endorses The Tulving Company.
SurvivalBlog.com also provides the following insight:
BTW, the quick way to gauge the value of a $1,000 bag versus the spot price of silver on any given day is simply to multiply the spot price by 715. Thus, at yesterday’s spot silver price of $13.85 per ounce, your $1,000 bag of dimes is worth $9,902.75. (Or just think of it as 9.9 times face value.)
There are also other ways to buy silver but we aren’t going to go into that much. I will however mention that I love these LDS based 1 Troy Ounce silver coins that have a picture of Captain Moroni on the front and The Title of Liberty of the back. I won’t mention how many of them I own :)
Do you have any further insights, corrections, or good sites you can recommend about Junk Silver? If so, please let us know in the comments!
COMMENT 1
Your information is good, and junk silver is definitely an important part of saving your hard-earned cash for a long-term scenario. One of the main downsides to junk silver, though, is the lack of common knowledge about its value. If you take a quarter and try to use it in a TEOTWAWKI barter scenario, your ability to use it depends entirely upon the other person’s knowledge of and confidence in its value.
COMMENT 2
[...] On Junk Silver or Silver Coins or Bullion Coins and Bartering Utah Preppers I’m trying to get this all figured out, it’s kind of confusing! Junk Silver, Silver Coins, Bullion Coins, Pre-1965 Coins – it turns out they all pretty much mean the same thing! Hard-Core TEOTWAWKI Preppers know that pre-1965 silver coins are made up of actual silver and have good potential barter power. That bartering capability comes from the fact that the U.S. Mint has guaranteed the amount of silver in these coins so they have a known value. Bullion Coins are generally considered the easiest way to have known values of precious metals – hence their potential barter usage. So far this is fairly common knowledge, but there is a lot more to know in order to do this properly – and I’m trying to get it all figured out. [...]
COMMENT 3
Having somewhat recently gotten into precious metals I have had to stumble through most of the stuff you laid out in this article. I have ended up with a combination of 90% silver and 99% rounds/bars. I buy whatever can be found at the most reasonable prices. I had a good thing going with a coin shop where I used to live, buying small quantities (single rolls) for 10X spot.
Where I live now the local place sells it for 12X. I have been buying stuff online here. Finding smaller quantities online has been difficult so I’ve been buying silver rounds. May pick up some more dimes though.
COMMENT 4 !!!!!!!!!!
JUNK SILVER IS USELESS FOR A SHTF SCENARIO!
If you disagree with my statement above, do me a favor. Borrow $5 in fiat currency from some sheeple you know. Then pay them back with a few dimes, quarters etc., in pre-1965 coins and watch their face as they get pissed! Then try to do the same thing while buying $5 worth of stuff at the neighborhood 7-11 store and see how far that gets your with Sanjay the owner. In the mind of sheeple, there is NO DIFFERENCE between post and pre-1965 money. If you’re not dealing with an informed survivalist or a numismatist you will NEVER CONVINCE them that your shiny pocket change is better than their shiny pocket change no way no how. Not to mention, the average American idiot couldn’t solve a math equation to determine silver content in 40% or 90% coins to save their idiotic lives. Besides, is a SHTF scenario really the time to conduct math classes with your uninformed trading partners. Heck, you might even get shot for your troubles when they think you’re trying to cheat them with your extra- special shiny dimes and quarters…and the last thing you’ll see will be all your lovely 90% and 40% coins getting kicked into the gutter while they check your pockets for something really valuable.
Now, don’t get me wrong. I have a soft spot in my heart (and in my head) for silver. I have 500 American Silver Eagles which I bought as a hedge investment and in case of a hyperinflationary situation without major political or socioeconomic collapse (non-SHTF in other words). Should hyper inflation kick-in my plan is to go to the local coin shop and exchange a few coins for some paper money to buy groceries immediately before they become even more devalued. Of course, the Silver Eagle has the words “One Ounce Fine Silver .999″ on it so it has more street cred immediately, but the coin shop owner won’t need me to explain to him why they’re worth more than the $1 face amount anyway. Junk silver has value in this hyperinflationary non-SHTF case as well. However, in a SHTF scenario Maslow’s Hierachy of Needs will kick in ASAP. People will be looking for shelter, food, medicine, ammo, clothing, liquor, sex etc. Shiny metal will probably only get you killed in your sleep by someone who doesn’t see the benefits of trading perfectly good food for your precious shiny metals like silver or gold. Most especially if the shiny Junk metals look exactly like (to their uneducated eye) as the jingling crap in their own threadbare pants. To paraphrase an old anti-drug slogan, “There’s a reason they call it JUNK!”
MY REPLIES:
john Says:September 1st, 2009 at 7:11 pm
"To avoid paying premiums, I will be getting rounds and one to ten ounce bars marked by reputable refiners such as Engelhard. That way people will know that it is real silver and what it is worth (whatever an ounce is valued at the time). "
"I too avoided purchasing the junk silver coins due to concern that potential barterers will not be savey enough regarding the value of them. The one ounce pieces are easier to determine their value at any given time and most folks won’t be prepared to do a field test to determine their content. Therefore, I opted to either pay the premium and eat the cost or go with the known refiner’s name on the piece. This seems to be the safest method of insuring survival. If I’m wrong, please contest my rationale, but I don’t think that I am."
Now, for my readers, here is the precious information that we are finally getting to after all of that: the makers and refiners that will be known by any coin dealer that you want to cash your bullion in to. They will also be known to most half-way decent business people with supplies to barter in exchange for precious metals in the near future. And they are:
Credit-Suisse, PAMP, Johnson-Matthey, Engelhard and SilverTowne.
I am blazabes and I Like the barter
ReplyDeletebarter