Find Your Local Coin Shop
A Brief Guide to Buying Silver:
What kind of silver, and where to get it.
by Jason Hommel, SilverStockReport.com
story is simple: Since the 1870's, the trend has been to stop
using silver as money (as a medium of exchange). This has reduced
around 1945, electronics started booming, and since silver is the
greatest conductor of electricity, a lot of silver has been used
up. Today, the world has nearly run out of silver, just as paper
money is beginning to fail around the world as gold begins to explode
upwards in price. As investment demand returns to gold and silver
for savings (as a store of value), like it will for no other
commodities, physical silver
prices will explode past them all, because monetary demand will return.
Therefore, I strongly suggest that you try to get the most
physical silver for
your money, and take posession of it. To do that, you ought to
ask the dealer at your local
coin shop the prices of the following items. (You can find your local
coin dealer at a link below.) Prices sometimes change.
Types and Kinds of Silver Available
A. 1000 oz. Bars.
--These bars weigh about 68 pounds, and vary about
10% as to weight. You may get a 908.8 oz. bar or a 1099.6 oz. bar, and
the price is settled on delivery. These
are the NYMEX bars. Benefit: Good for NYMEX delivery to the major
exchange for delivery into a 5000 oz. futures contract, and thus, the
liquid for large buyers or sellers. Also, it is quicker to
physically move them in large quantities, rather than moving hundreds
of 100 oz. bars.
Drawback: They are not suitable for smaller transactions, but they are
always liquid if they are sold to a wise bullion dealer who knows what
they are. The other drawback may be shipping, if you are on the
west coast, since the exchange is in New York.
B. 100 oz. Bars.
--These bars weigh 6.8 pounds, and are among the most
popular with retail investors. They stack well, and make it
easier to inventory than 1 oz. rounds or silver bags. Popular
brands are Englehard and
Johnson-Matthey. Those two brands cost a bit more than other brands,
usually about 40-50
cents per ounce above the spot price, but that price may vary with
C. Odd weight retail bars. --Stamped as 101.46 oz. or 51.23 oz., these
bars cost less, and generally have a
wider spread, due to the extra work it takes to calculate their value,
and extra risk due to the lack of good brand name. To test that
they are silver, try a simple ring test. Bang them with a wooden
spoon, and if you hear a faint, quick, "riiiinnnngggg", they are
silver. Lead filled bars thud or thunk, and do not ring.
But you may be able to buy these as spot, and sell them at spot,
depending on the dealer. These are true "bullion" bars, and not
found in quantity. Also, there is the 1 kilo bar, which is 32.151
D. 10 oz. bars are
also very popular, often harder to get, with a
slightly higher cost, as they seem more "affordable" and are very neat
to hold, and can act as "change" between the 100 oz. bars, and 1 oz.
A. U.S. minted Silver-Eagle.
--This coin is .999 pure silver, and
weighs one ounce. It generally sells for about $2.00 over the spot
price, and is thus quite expensive. I don't recommend these.
B. One-ounce "rounds".
--They are .999 pure silver, and weigh one
ounce. These coins are like the Silver-Eagle, but they cost much less.
They are minted by a private mint. They generally cost about 40-50
cents above the commonly quoted price of silver--also called the "spot"
price. These are often very popular, and a very good choice.
C. 90% US Silver Coin Bags, $1000 Face --These are half dollars,
quarters, or dimes that commonly circulated in the U.S. Called "Junk
silver", they generally contain no rare or special coins. Sold by the
"bag", each full bag contains $1000 face value of coins, such as 2000
half dollars, 4000 quarters, or 10,000 dimes. A "bag" weighs about 55
pounds. This is typically the cheapest silver you can buy,
because there is a cost to melt it down to get the kind of silver that
is needed by industry. But this kind of silver also can become
very much in demand, such as prior to the year 2000, when people wanted
"tradable" silver, and bags cost up to 25% more than other silver
D. Commemorative Coins.
Often times, the public will buy silver at a rate of 10 times higher
than the bullion content if it is made into "Elvis" coins or "Space
Shuttle" coins, or "Princess Diana" coins. Often made by the
Franklin mint and sold on late night TV, these are generally a rip
off. People pay so much, and sell them to the bullion dealers
only for the melt value. And you can sometimes buy these kinds of
so-called collectables at the coin shops very cheap at just over the
spot price, or ten times cheaper than found on TV.
So, what kind of silver is best? It depends on your situation.
I own and like the 100 oz. bars, and the 1000 oz. bars the
best. But that's because I have a lot of silver. My friends
and family typically like the 100 oz bars, 10 oz. bars, and 1 oz.
rounds the best. For storing large amounts, the 1000 oz. bars are
The 100 oz. bars are troublesome in very large quantities--it takes
more work to move 200 of them than it takes to move 20 big ones.
also like the bags, but they may require counting with a coin counter
I have purchased, which takes more time.
My kids like the one-ounce rounds the best. Most people find the 100
oz. bars fascinating to hold in one's hand, and the 1000 oz. bars are
considered too heavy to lift.
How to Buy Silver &
Gold, and Where to Get It!
Beware! Don't trade in your dollars (which are defaulted
promises to pay silver or gold) for more promises of precious metal!
What I mean is, we are clearly heading into another situation where
delivery default is imminent!
The safest place to start buying precious metal is from your
local dealer, which you can find in your local phone book -- look up
If you take delivery in person when you pay, then you will
avoid the risk of getting stiffed on a failed delivery. Start
there, and start
small. A dealer in your nearest metropolitan city may not have the best
price, but you will get your silver if you walk out with it.
If you buy all that your local dealer has, then look to
another, larger shop that might be a further drive away, and then you
might consider one of the nation's largest dealers who are not at the
COMEX. If you order on the internet, or from a dealer far away from
home, you may wish to place several orders at once, with several
dealers, to protect yourself from a failed delivery.
And when you take delivery, get a safe! And also a gun! And
maybe dogs. And perhaps a security system and alarm, or more depending
your situation. You can always protect your silver. The
typical cost is 1% per year.
I have multiple large gun
safes, each the size of a large refrigerator. I store it in
various places, in secure locations, on property not registered in my
name. It's well hidden behind a series of 4 locked doors; armed
security guards, along with security systems. They say you should
be willing to spend up to 1% of the value of your silver, annually, on
security. If you plan to hold silver for more than 10 years, you
may be willing to spend more up front. I spent about 7% up front,
and I spend about 1/2 of 1% annually. (I now have room to make
silver my number one holding again, but I plan to buy more silver when
the stocks get much, much more expensive.) Those who say they
cannot afford security for their silver do not understand the concept
of wealth, nor do they understand silver, nor
security. If you actually have wealth, then by definition, you
can afford to protect it. For example, if you have $5000 of
silver, buy yourself
a $50 lock box, or a $150 safe at Wal-Mart (maybe a floor safe), and
maybe a dead bolt and solid core door for your closet. That would
give you 4 locked doors, too: front door, closet door, floor safe door,
I DO NOT TRUST THESE
I do NOT recommend the kitco "pool" accounts.
Kitco recently had the worst terms of all dealers in 2008. Unknown
delivery times for silver, and unknown and backlogged payment if you sold
silver to them. Unreal. See more here:
Warning: Monex will offer to hold silver
for you, or offer you leveraged accounts. I strongly advise against
NorthwestTerritorial Mint has very, very, long delivery times.
Warning: Goldline may want to sell you
numismatics on leverage, on borrowed money and hold them for you, and they
reportedly have long delivery times.
Warning: Perth Mint
has often run out, has long delivery times, up to 6 months, and has
extraordinary fees to convert certificates or unallocated silver into real
silver. With a reported $1.5 billion in "inventory", to be used for
minting purposes, they should have enough to make more than the U.S. Mint annually, over 20 million
ounces, but they make less than a million! Something is very wrong at the
If you absolutely must have someone else
hold your silver for you, there are four people I might
trust. (And these people are NOT holding silver for me.)
which is "only a storage company", not a bank.
can hold silver and gold in an IRA for you. Large brokerage houses
also offer this service, but they have been known to not have the silver,
which is "standard industry practice".
Remember, the only way to
prevent from being defaulted on a
delivery default, is to bring your cash, in person, to a dealer and
delivery in person, that same day.
The easiest way to buy Comex Silver is through a precious
metals brokerage firm such as HSBC bank, or http://www.fidelitrade.com that
charges around 1% commission, plus delivery fees of about 2 - 3%
depending on how far to ship. Or you could open a commodities trading
account with any of the major brokerage houses who are most likely the
bullion banks, and take delivery of your contract. There are several
problems with this method.
First, is the most obvious. These are the paper
contracts that are controlling and suppressing the price, that I believe
must one day default. Second, the bullion banks, since they are the ones
who are likely short silver, will try their hardest to talk you out of
placing an order, or talk you out of taking delivery. I have actually had
several bullion banks turn me down, and not open a commodities trading
account for me when they heard I was going to take delivery of several
futures contracts! Their hypocritical excuses are amazing! They will say
on one hand that their commissions are too low, and thus, it's not worth
their time to open the account for you. And then, they will turn around
and also say that you don't want to order silver bullion because the
commissions will kill you! Unbelievable hypocrites those shorts! They will
also try to scare you with "assay fees" that will be assessed if you try
to return 1000 oz. bars to the exchange! But they won't tell you what
those fees may cost! I've heard the assay fee is FREE if you use Brinks in
List of refiners
(refiners don't usually sell to
precious metal dealers:
www.mp-edelmetalle.de in Germany
www.thesilvermountain.nl in Netherlands/English OK
Tax is 6-7% for "Legal Tender Silver Coins" such as Eagles, Libertads, Maples, etc.
www.gold4ex.be/servlet/Home in Belgium/Brussels
www.atsbullion.com in UK
www.royalmint.com in UK
www.silverexchange.co.uk in UK
www.24carat.co.uk in UK
www.goldavenue.com in Switzerland
www.monnaiedeparis.fr in France
www.ainsliebullion.com.au/ in Brisbane
www.ausbullion.com.au/ in Sydney
There is also "The Perth Mint". http://www.perthmint.com.au/ I strongly
advise against letting them hold your silver for you. I cannot warn
about this danger enough. If someone is holding your silver, then
you are holding the bag! You don't have silver if someone else has your
silver! Instead, you have a promise, essentially, a promise is no
better than paper money. Know the difference! Even they
recently ran out of silver in March/April, 2008.
In Bangkok, Thailand:
The Bangkok Assay Office (www.bkkassay.com ..site is currently under construction).
Bangkok Assay Office
Update my listing
1230-32 New Road
t: 662 727021416
f: 662 7270217
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