90% US Silver Coin Bags, $1000 Face
(Benefits and Drawbacks)
Silver Stock Report
by Jason Hommel, May 31st, 2008
Since 1 ounce rounds, 10 ounce bars,
and 100 ounce bars are getting very hard to find, and a 6-8
week delay is unrealistically unacceptable, some of you may be considering
buying 90% Silver, which are more available in places these days,
especially, I hear, from www.fidelitrade.com. So, I
figured that some of my readers would like my experienced opinion on
acquiring this kind of silver product.
Definition: 90% US
Silver Coins come in "bags" of $1000 face value, which consist of 10,000
dimes, or 4000 quarters, or 2000 half dollars. The coins were
regularly minted, circulating U.S. silver coinage dating 1964 or
earlier. Usually, a "bag" is split up into two or four actual canvas
sacks to make it easier to carry. The coins exclude silver dollars,
which are another product. The silver is 90% silver, the rest, the
other 10% is copper, to help harden and toughen the coinage. There
is 0.72 of an ounce of silver in each $1 face value, or 10 dimes, 4
quarters, or 2 half dollars, but the industry counts it as if it's .715
ounces, due to coin wear. A full $1000 bag weighs about 54.5
pounds. The most common form is quarters, about 70% of the
time. 20% of the time, you get dimes, and 10%, half dollars.
Seems that the dealers hold back the dimes and half dollars because they
might be more interesting.
Known as:
"Bag" U.S. 90% Silver
Coins
90% Silver Coin Bags
90% Junk Silver Bag $1,000 Face
Value-715 Ozs. Of Pure Silver
90% Silver Bag - 715 Troy Oz.,
$1,000 Face
$1000 bags of 90%
Silver Bag 90% $1,000.00 Face
Value
Silver US 90 Percent Coinage
US 90% Silver Coins $1,000 Face
(pre1965) (715.00 oz.)
90% Bags, $1,000
90% Silver
Coins
Benefits:
1. Easily divisible into small
amounts, since they are already broken up into small
amounts.
2. As former U.S. circulating coinage, the risk of
confiscation might be the lowest of all forms of silver.
3.
They just don't make this kind of silver anymore!
4. This
silver is very difficult to counterfeit -- once you get some, you will see
how our modern coinage is so different, as today's coins are lighter, the
metal looks different, and toda's coinage has the copper strip in the
middle. Silver coinage also has that distinctive "ring" to it.
5. This silver has historical value and significance; as our
forefathers worked a day's wage for these exact same silver dimes and
quarters! It's amazing that you can get a silver dime for about
$1.20 each, in bulk!
6. Price varies. Sometimes 90%
coinage had a 30-50% premium, or extra value over the spot price, such as
6 months to a year prior to Y2K, as people wanted spendable, usable or
more practical forms of silver.
7. Rarely, you might be able
to pour through a bag of dimes, or half dollars, and find some coins that
might have some numismatic value. I have separated out my mercury
dimes from the rest, but nobody is paying any signifianct premium for
these, maybe $50/bag which is not yet worth it. My mercury dimes
might even end up having less value, being more worn
down.
8. 90% silver is among the cheapest kind of silver you
can get today, and it tends to be more available and easier to find.
When this silver is the cheapest, you end up getting the most silver for
your dollar, which is a significant advantage. One strategy among
silver investors is to buy the kind of silver that is the cheapest at the
time, and then sell the product that happens to be most highly valued in
the marketplace at the time.
9. 90% silver might not be a
reportable transaction. However laws change, and this is not legal
advice. Check with your attorney (Yeah, as if attorneys know
anything!)
Drawbacks:
1. In 1980, when silver was
being melted at the refiners, 90% silver coins were bought for about
$35/oz. when silver was $50/oz, due to the fact that the refineries were
backed up with too much 90% silver to melt down, and smelting them down is
an added cost if there is a need to turn them into 1000 oz. Comex
bars. (Personally, I don't think that's much of a worry or concern,
since I'm not investing in silver hoping for a Comex-driven short covering
spike and crash; instead, I'm expecting more of a permanant revaluation
upwards as society must return to real silver and gold in commerce when
paper money fails.)
2. Counting requires a coin counter,
which can cost $1000; but most coin shops have these counters. (Or
you can use a scale to see if the bag weighs 54.5 pounds.)
3. Regular, coinage, dated 1965 or later, can slip into the
mix. This usually happens when 40% silver halves get slipped into
the 90% silver half dollars, since they are more difficult to tell apart,
since the 40% coins have no copper strip in the middle, and so you have to
check the individual dates. One time my dealer found about 5-10
coins of 40% silver in one bag that I had bought years
earlier.
4. Most people I tell about silver are not as
interested in buying 90% silver, due to the fact that the conversion
factor is "too much math" for most people to figure out by multiplying $1
face value times .715 ounces of silver. Most people want to easily
know how much silver they have, and what it's worth. Most people
prefer 1 ounce rounds, in my experience, because it's easier to know how
much silver you have, and what it's worth.
5. There is a scam
going around where 90% junk "walking half dollar liberties" are being sold
for up to 72% over the spot price, and on leverage, (with no delivery of
product) with interest on the loan of up to 15%, which is a horrible
deal. These coins are not numismatic, and have no numismatic demand,
and no numismatic value.
As always, the best place to find silver is your
local coin shop, and then try some large internet dealers. For more,
see:
http://find-your-local-coin-shop.com/
Sincerely,
Jason
Hommel
www.silverstockreport.com
www.miningpedia.com
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