Buying Junk Silver At Multiples Of Face Value. How Does That Work?

So you have decided to start buying circulated U.S. 90 percent silver coins also known as "junk" silver. You stop in at a local coin shop you've passed by many times before and tell the dealer you have $1000 and want to purchase some old U.S. silver coins. So the dealer takes out a box containing dimes, quarters and half-dollars, all dated 1964 or before, and begins counting out your coins. As the dealer is doing this, s/he explains that the current spot price of silver is $18.00 and their current price of selling junk silver is 14 times the face value. And it turns out your $1000 fiat currency will get you about $71.40 in junk silver.

At this point you might be thinking "this dealer is scamming me, I thought $1000 would get me more silver coins than that".  Actually this "deal" isn't bad at all. Even if the dealer was charging 15 times face value, it would be fair. So how can you be prepared to spot a fair deal from a bad one prior to visiting the dealer? Here is what you need to know...

It is generally recognized that a $1000 bag of 10,000 circulated silver dimes, 4,000 circulated silver quarters or 2,000 circulated silver half-dollars contains 715 ounces of silver. With a spot silver price of $18.00, the silver value of that bag is $18 times 715 or $12,870. Divide the $12,870 by the bag's $1000 face value and the result is $12.87. So for each $12.87 of fiat money you would receive $1.00 of silver coins - but only if the dealer was running a non-profit company. Since the dealer has a right to make a decent profit, 14 times face would be generous for such a small transaction (far less than a full bag) and 15 times would be more like it. If you were selling silver coins to a dealer with the 12.87 times face value, the dealer might offer you 11 times face as the spread would help them stay in business.

If you are offered uncirculated silver coins at multiples times face, such as rolls of Brilliant Uncirculated Franklin or 1964 Kennedy half dollars, the amount of silver in an uncirculated $1000 bag is approximately 725 ounces so use this number instead of 715. Or you might come across some 40 percent silver clad Kennedy half dollars minted for circulation (business strikes) from 1965-1969. Although not as desireable as 90 percent silver coins, if the price is right get the silver. A $1000 bag of silver clad Kennedys contains approximately 300 ounces of silver (each coin contains .1479 ounces of silver). I have never seen Morgan or Peace silver dollars offered at multiples times face but that doesn't mean offers like that don't exist. A $1000 bag of circulated Morgan or Peace dollars is considered to contain 765 ounces of silver with uncirculated silver dollars at approximately 780 ounces (each uncirculated Morgan or Peace dollar contains .77344 ounces of silver).

You can find lots of information on U.S. and Canadian silver coins in my ebooks The Last 90 Percent Silver U.S. Coins and The Last 80 Percent Silver Canadian Coins.

Thanks for reading.  JA

The Carson City Morgan Silver Dollar - A Favorite of Collectors and Investors

I like Morgan Silver Dollars a lot. What I don't like is how some sellers often misrepresent them, either by advertising these dollars as rare when most are not, and/or correctly stating they are 90% silver but omitting how much silver they actually contain. And I'm not too crazy about the healthy premiums of Morgan (and Peace) dollars being charged by dealers. But I make an exception for Carson City (CC) silver dollars. 

The Carson City mint produced the Morgan CC silver dollar for 13 years, from 1878 through 1885 and again from 1889 through 1893. Of the slightly more than 656,000,000 Morgan dollars minted from 1878 to 1904 and again in 1921, only about 13,862,000 Morgans (approximately 2%) were minted by the Carson City mint, the least of any of the five U. S. Mints that produced Morgan silver dollars. Here are those production numbers by year...

1878CC = 2,212,000; 1879CC = 756,000; 1880CC = 591,000; 1881CC = 296,000; 1882CC = 1,133,000; 1883CC = 1,204,000; 1884CC = 1,136,000; 1885CC = 228,000; 1889CC = 350,000; 1890CC = 2,309,041; 1891CC = 1,618,000; 1892CC = 1,352,000; 1893CC = 677,000

(The most valuable CC Morgan, by far, is the 1889CC followed by the 1893CC and 1879CC).


But it's anybody's guess how many CC Morgans exist today. Most likely some were lost in 1918 when 270,232,722 were melted down by the government to recover their silver content (the Pittman Act). And more were probably turned in and melted down when silver was on its way to $50 per ounce a few years back. Others may be hidden in buried caches, their location long forgotten and their owners no longer on this earthly plane. No wonder CC Morgans are in high demand and fetch a generous premium.

The CC Morgan you see at left was purchased from a local coin dealer a few years back. The story on it is:

   The U.S.Government "discovered" a bunch of CC Morgans in the mid-1960s, encased them in plastic, boxed them up along with a numbered certificate and sold them to the public. 

It doesn't show up well but this coin has some noticeable bag marks and would probably be graded in the low Mint State grades of MS-60 or so a.k.a. Brilliant Uncirculated. Current dealer bid/ask price (the Coin Dealer Newsletter) on a BU 1883 CC Morgan is $190/$205. 

The places I like to shop for Carson City Morgans (including encased CC Morgans like that pictured) are at local coin shows but you can find them elsewhere. But beware as there are some very good counterfeits. Higher valued Morgan dollars, including CC Morgans, are a prime target for counterfeiters (the asking price for a Brilliant Uncirculated 1889CC is currently at $25,000). For any higher priced Morgan silver dollar, CC or not, buy only from a dealer you trust. And expect to pay a higher premium for the CC mint marked Morgans.
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If you are interested in Canadian silver coins, I am offering a free download of my eBook The Last Canadian 80 Percent Silver Coins - A Buying & Selling Guide for a limited time. There are over 100 pages and 70+ detailed coin photos. If you take advantage of this freebie, it would please me greatly if you would provide your honest review of this eBook when you have read it. You can find it here at Amazon.

Happy investing. JA

Beware Of These Morgan Silver Dollar "Deals"

Let me first say that the Morgan Silver Dollar is one of my favorite silver coins. But I want to clear up some of the dis-information and half-truths in some of the ads I have seen for these historic coins. There is no shortage of Morgan dollars despite the fact that 270,232,722 were melted down in 1918 by the U.S. Government to replenish their silver stockpile. Every coin show I have been to, including the latest one mentioned in my Gold Blog, has had a surplus of Morgans for sale in many different grades. So if you are shopping around for some Morgan dollars beware of misleading ads such as these...

One ad was promoting 1921 Morgans, stating this was the last year they were struck (true) and implied they had special value because of it (false). The truth is Morgan dollars were minted for the first 11 months of 1921 - a total of 86,730,000 between the three U.S. Mints. Not exactly a small number and far from scarce (the 1921 Peace dollar has a higher value as only 1,000,473 were minted). So don't go paying a high premium for circulated or uncirculated 1921 Morgans. And be VERY careful if you are interested in Mint State 1921 Morgans that are graded and slabbed. Even some of the higher grades are not that scarce and counterfeit Morgans in these grades are not unheard of. If you want truly special Morgan Silver Dollars, look for Carson City Morgans in the higher uncirculated grades and shop around.

Another ad states you can buy Morgan (or Peace) Silver Dollars at a very low premium over the spot silver price. So if spot silver is at $30 and you can get each silver dollar for $32 it sounds like an okay deal. They are hoping the buyer doesn't know the actual silver content or just assumes that these 90% silver dollars contain an ounce of silver. They DON'T. An uncirculated Morgan and Peace silver dollar contain .7734 troy ounces of silver and at $30 spot their intrinsic or melt value is $23.20. A very good deal for the seller but a very bad deal for the buyer. The silver price would have to go up another $11 just to break even on this deal. And if the silver dollar is lightly circulated, it is considered to contain .7650 taking in account the wear factor. If you are not sure of how good some of these deals are, ask any reputable dealer and they will tell you.

After a strong showing for Silver Eagles in January, the numbers kind of dropped off a cliff in February - from 6,107,000 to 1,490,000. So far in March the number is at 1,065,000. Gold Eagles are down in numbers too. After going through 127,000 ounces of gold for all the Gold Eagles produced in January, only 21,000 ounces of gold were used for February's Gold Eagles and 21,000 so far in March. Let's hope they "spring ahead" in numbers in the coming months.

Thanks for reading.

Silver Investing - Are You A Collector Or Investor

I decided to escape the winter weather of the upper mid-west for a few weeks and head for warmer parts - namely Laughlin and Las Vegas NV plus Palm Springs CA later. While in Laughlin, I attended a local coin dealers show. There weren't a lot of dealers there but the ones that were had impressive inventories of coins with silver far outweighing gold coins.

There were many, many Morgan Silver Dollars, Peace Silver Dollars and Silver American Eagles being bought and sold but what struck me were the majority were slabbed and graded. MS-63s, MS-64s and MS-65s on the 1878-1921 dollars and MS-69s and MS-70s on the Silver Eagles. Of course there were some pretty hefty prices on most of the merchandise and I can't say I got too excited about most of these graded coins.

I'll admit I did enjoy looking at many of them but it just reinforced in my mind that I am a silver bullion coin investor and not a silver coin collector. Not only is it less expensive but the knowledge to wisely invest in silver bullion coins is much less. God bless the gold and silver coin collectors but for me it is quantity over quality. Unless it is a coin I am really interested in such as a Morgan CC Silver Dollar, coins grades of XF or AU will do just fine. So which are you?

At the time of this post (in Laughlin), spot silver is at $33.91 for a gain on the day of $1.25! Very impressive. Let's see where this leg up takes us.

Thanks for reading.

Silver Investing - Silver Sniping On eBay

When I have some spare time, I like to look at the various silver coins that are being auctioned on eBay. While I haven't seen many "deals", every now and then I find something that is of interest enough for me to bid on. That may be Walking Liberty Half Dollars, Silver Philharmonics, Silver Rounds, Morgan Dollars, etc. As long as the current bid isn't too high, the shipping fee is reasonable, the seller has a high positive feedback with a good number of transactions under his/her belt and there are only a few hours to go on the auction, I will probably place a bid.

Nothing is more frustrating than almost having the winning bid when some other bidder "steals" it from you with seconds to go. Then it's too late to place a higher bid before the auction ends. That's where sniping comes in. There is a free service that allows a bidder to automatically place a bid with just seconds to go (sniping) thereby increasing the odds of being the winning bidder. And the bidder doesn't even have to be by his/her computer. Just enter the eBay item number, the maximum bid and when to place the bid (how many seconds before the auction ends). Then go play outside. If interested, go to Goofbay and read up on eBay Sniper. This site offers other useful services that you may find of interest.

If you have come across other useful silver investing tools, please share them on this blog.

Thanks for reading.

Silver Investing Guide - Beware Of This Deal

In a recent catalog I received, there was an offer to purchase an 1800s Morgan Silver Dollar (in brilliant uncirculated condition) for only $79.99, marked down from $99.99. The description went on to say that many millions had been melted down in 1918 (true) and due to this event plus more meltings throughout the years, relatively few Morgan dollars remain (not true).

Just three years after the big 1918 meltdown of 270,232,722 Morgan dollars, 86,730,000 Morgans were minted with the 1921 date. It is estimated the approximately 17% of all Morgans minted are still in existance. That is still a lot of these silver dollars floating around. Being brilliant uncirculated is a plus but the coins could still end up with some bad bag marks. Another point worth mentioning is the coins have been certified by a grading company I have never heard of.

Uncirculated Morgan silver dollars contain .77344 troy ounces of silver. That would result in a silver price per troy ounce of $103.42. Today's spot price of silver is $15.69 per troy ounce. Without knowing the year and mint mark, I would say this is definitely one deal to stay away from. Common date Morgans in MS 60 grade (Mint State 60 is an uncirculated grade) can be purchased for less than $30.00.

If you are ever tempted by deals such as these, do your research first. This is an awful lot of money to pay for one Morgan dollar. If your objective is to get the most silver for your money, you must shop around and watch out for deals like this.