Thursday, June 30, 2011

Silver Investing - Recognizing U.S. Silver Coins

For the last few years, I have been carrying an 1881 Morgan Silver Dollar with other change in my pocket. This is not something I would recommend others do as the silver content of this coin gets a little less all the time. But I really like the Morgan dollar and will probably continue to carry it until it will be difficult to tell if the image of Lady Liberty is a man or a woman. When coins become this faded in detail, they reach the status of what some of us in the business called "pond skimmers".

What is interesting about this is the reaction I get when getting change out for a purchase. Clerks spot this coin which usually results in comments like "what is that" or "my Dad (or Grandpa, Grandma, etc.) has one of those" but they have no idea what it is or its value. If I were to tell them the value of this Morgan dollar is about $26.75 (with spot silver at $35), they would think I am putting them on.

Not knowing which coins have value can be costly. Not long ago my wife was in our local bank when a couple came in with two coffee cans of quarters. They found them when renovating an old house and wondered if the bank would exchange them for cash! I would bet a bunch that these were pre-1965 quarters worth about $6.25 apiece ($35 spot) and the bank was only too happy to give them a $1.00 Federal Reserve Note for every four quarters they turned in.

So here is a general refresher on common U.S. silver coins:

U.S. Nickels - only nickels between 1942-1945 contained a small amount of silver (.0563 troy ounces). There is no silver in other nickels.

U.S.Dimes - pre-1965 dimes contain .0715 troy ounces of silver and include the Roosevelt Dime (1946-1964), the Mercury/Winged Liberty Head Dime (1916-1945) and the Barber/Liberty Head Dime (1892-1916). It takes about 14 silver dimes to equal one ounce of silver.

U.S. Quarters - pre-1965 quarters contain .1788 troy ounces of silver and include the Washington Quarter (1932-1964), the Standing Liberty Quarter (1916-1930) and the Barber/Liberty Head Quarter (1892-1916).

U.S. Half-Dollars - pre-1965 half dollars contain .3575 troy ounces of silver and include the 1964 Kennedy Half-Dollar, the Franklin Half-Dollar (1948-1963), the Walking Liberty Half-Dollar (1916-1947) and the Barber/Liberty Head Half Dollar (1892-1915).

Kennedy Half-Dollars (1965-1970) - these coins are 40% silver and contain .1475 troy ounces of silver.

U.S. Silver Dollars - these include the Peace Silver Dollar (1921-1935) and the Morgan Silver Dollar (1878-1921). Their silver content is .7650 troy ounces of silver.

The silver content specified above is for circulated coins. Uncirculated coins have a slightly higher silver content since they have no wear associated with them.

Based on increased traffic to my silver sites Silver Investing Simplified and Silver Investing Guide, it appears more and more people are getting "educated" on the value of silver coins but still far from the majority. You are wise to be learning more about silver coins and, hopefully, investing in them.

Thanks for reading.

Wednesday, June 15, 2011

Silver Investing - Problems Getting Physical?

One of the resources I use to purchase silver is a person who operates out of his home and attends regional coin shows to do most of his dealing. This about as small-time as you can get for a coin dealer but he is honest, quotes me fair prices and I trust him.

Knowing he was going to another show last weekend, I contacted him a few days before and expressed an interest in picking up a roll or two of 90% silver half-dollars. I prefer Walking Liberty Half-Dollars but the Ben Franklins or even 1964 Kennedy Half-Dollars would be acceptable. He has not contacted me since which probably means he was unable to get even one roll (20 coins) of half-dollars in any of my three choices.

This is not too surprising and has happened to me before. Supplies of physical silver coins are tight and it seems buyers outnumber sellers by a wide margin. I know I am not interested in parting with any of my silver at this time with silver holding great promise to head back to the $50.00 per ounce price and beyond.

If I had been able to get at least one roll of any of the above half-dollars, what would be a fair price? The silver content of each circulated silver coin is .3575 troy ounces times 20 equals a little over seven ounces of silver. With spot silver at around $35 per ounce and taking the premium into account, I might have ended up paying around $275-280 per roll. But alas, it was not to be.

When you are buying 90% silver coins like this, it is important to know the silver content to help determine how fair the asking price is. It takes approximately 14 dimes or six quarters or three half-dollars to equal one troy ounce of silver. Knowing this plus the current spot price of silver will allow you to do a quick calculation of the premium being tacked on to the seller's asking price (and the fairness of the offer). Knowledge is power.

A final note: for those of you who have had trouble viewing my article on Morgan CC Silver Dollars, the problem has been resolved. Clicking on the link (above) will take you to the corrected page.

Thanks for reading.

Wednesday, June 1, 2011

Silver Investing - May 2011 Totals For Silver Eagles

The May total for Silver Eagles stands at 3,653,500, second only (in 2011) to January's 6,422,000! Year-to-date, 18,901,500 Silver Eagles have been produced and snapped up by a growing number of investors.

Talk of physical silver shortages continues to circulate but the spot silver price doesn't want to rise accordingly. Shouldn't the price get back on a rising track with such high demand and tightening availability? Not while the paper silver traders keep getting "in the way". To get a better understanding of this silver market, I recommend you read Silver Action a Reminder of the Risks of the Paper Market.

In the last few weeks, Richard Russell has come out strongly in favor of silver and his belief in a resumption of rising prices. The first appeared on May 10th and can be read at Expect Huge Rebound in Silver. The second was posted on May 30th and can be read at Subscribers Should Buy Silver Once Again. When Richard Russell speaks, I listen.

In my research of the last few weeks, I listed several potential stories for this post but decided to drop most of them in favor of this one that really caught my interest. It is titled "A 1980 copy of Playboy Predicts the Future for Silver". It explains the Hunt Brothers actions in the silver market at that time and offers some parallels to today's actions. You can see it here.

Thanks for reading.