For several years now, I have urged my clients and others, to buy silver (AG) if they have a place to store it, plus some patience. All things require patience, be it a marriage, raising kids, watching the grass, flowers, kids, or corn grow. Without patience, we’d be in a heap of trouble. When people get bored from waiting, the common funny phrase is, “I’m just sitting here watching the cars rust.” Well, I’ve got gobs of patience, and every time I open my safe and look at all those goodies, I am never tempted to sell, because all those goodies, represent real money, real substance, real tangibles, and if I die and leave it to my kids, tax free, my patience will have been rewarded. But perhaps a bit of history on silver, or AG would be interesting.
“Silver,” comes from the Latin “Argentum,” and has been known since ancient times. It is mentioned in the book of Genesis, and slag heaps found in Asia Minor and on the islands of the Agean Sea, indicate that silver was being separated from lead as early as the 4th century BC. Silver has been used for thousands of years as ornaments, utensils, and as actual money for trade in most monetary systems. Silver is soft and malleable, making it difficult to remain in a certain shape. As a result of this, “sterling” silver was developed, which is 92.5% silver, and usually the rest in copper. When the U.S. government, as well as other nations produced silver coinage, it was 90% pure, with 10 % alloy to make them durable. “Germans Silver,” isn’t silver at all, but an alloy of nickel, copper, and zinc. Mercury was once thought to be a kind of silver, though the elements are chemically unrelated. In my favorite mining town of Silverton, (“We ain’t got any gold, but we got silver by the ton”), the ore contained lead, copper, zinc, silver, and gold. The milling process separated the metals. Almost half of the silver mined today, is a by-product of copper mining.
Silver is just over half the weight of pure gold, and similar in weight to 14 Karat gold. It is less than half the weight of platinum. It has the highest electrical conductivity of all metals, even higher than copper, but its greater cost has prevented it from being widely used in place of copper for electrical purposes. Silver’s specific gravity is 10.5. Silver has the highest thermal conductivity, whitest color, and highest optical reflectivity of any metal. It tarnishes when exposed to air with ozone, hydrogen sulfide, or sulfur in it. Silver has been used for photographic uses for close to 175 years because of the extreme light sensitivity of silver hallides. In 1939, the spot price of silver was fixed by the U.S. treasury at 71 cents per troy ounce, and again in 1946 at 90.5 cents, which was supposedly the melt down content of the U.S. silver coins in existence. 1946 was shortly after the end of WW II, and saw the rebuilding of Europe and Japan, at U.S. taxpayer expense, via the Marshall plan, one of the great public thefts in history. Never before or since, has a victorious nation paid for the rebuilding of its former enemies! The post-war period saw huge resurgence of auto, appliance, radio, the new TV, and other manufacturing, which used silver in the processes. The demand for silver was so large, that within ten years, the price of silver had gone up 35%. By 1950, the U.S. Treasury had an inventory of 2 billion ounces. In 1959, the treasury had 2,060,000,000 ounces in its vaults, plus 1.331,000,000 in circulating coinage, or a grand total of 3,391,000,000 ounces, “officially.”
Therein lies another government lie. The figures said that the government “had” 1.3 billion ones in coinage, but how could they, when the coins were in the hands of the citizenry? Maybe a more accurate statement would have been that the treasury had 2 billion ounces, and the citizens had 1.3 billion ounces. By 1960, the treasury began selling its “seed corn,” or silver. In 1960, the treasury sold 22 million ounces of silver bullion, and used another 46 million ounces for coinage. In 1961, the treasury sold 63 million ounces, I can only assume to help out with the deficits always present in government, and used 56 million ounces for coinage. Smart people were hoarding, or using silver coins as investments. How easy it was to save in silver, by simply saving a few silver coins each week! America did it. In November of 1961, the treasury stopped selling, causing the price to go up to $1.29, in 1963.
Guess what the smart U.S. government then did? Remember the “silver certificates?” You know, those dollar bills, which had on them “redeemable in silver?” The $5 and $10 silver certificates were withdrawn in 1961, which freed the silver reserves held against them. Figuring they would run out of silver, and besides the silver certificate commanded more than a dollar’s worth of silver, they stopped printing the one dollar silver certificates in 1963, freeing the paper dollar from its silver reserves. Now please note this. The paper silver certificates had an equal amount of silver in the treasury vaults, for 100 % redemption, if so desired. This was until 1963. Honest money! Since all this silver had been freed from backing the paper money, the treasury again began selling silver in late 1963. Between 1960 and 1965, the treasury sold 342 million ounces of silver, and used another 814 million ounces for coinage a lot of which went into bureau drawers as savings in a tangible substance silver. Think of the convenience of it. Saving a few dollars a week or even month, by hoarding or saving U.S. silver coins.
By 1964, a year after the last dollar silver certificate was printed and guaranteed to be backed by, and redeemable in silver, the public was saving silver in ever larger amounts. The treasury must have seen the handwriting on the wall, and declared that 1964 would be the last 90% silver coins. A few “clads,” or 40% halves were minted for a few years afterwards, but the bulk of U.S. coinage, went from value to non value, in 1965. “Officially,” the demand for silver slumped from 1964 through 1970, but once again, these figures are misleading. The demand ’slumped,’ because Americans were busy taking all the silver coins out of circulation over a billion ounces! I had a chain of ice cream parlours in Philly during those years, and I used to comb through the cash registers every night, and sift out the silver dimes, quarters, and halves. Those with brains did this, and those that were stupid, just kept on spending, and never noticed that they were spending real money as well as fake money.
Did the U.S. treasury or government realize, or even care that they were selling the real money out of their vaults? Must not have, because from 1966 through November 1970, 674 million more ounces were sold. Another strange statistic is that during that same period of time, when the treasury was unloading 674 million ounces, the public gobbled up 620 million ounces as investments. Silver went up to $2.57 in 1968, and leveled off at about $2 average during that period.
Where did all those silver coins go? Hundreds of millions of them are still in bureau drawers or some safe place determined by millions of citizens. Others were sold to pawn shops, and other places where they were bought at the higher prices, and eventually placed into “bags” of $1,000 face value silver coins. This means that “bags” contain 10,000 silver dimes, 4,000 silver quarters, or 2,000 silver halves, each one containing 715 ounces of pure silver, and usually selling for spot price or a couple of cents over a real bargain. Why are bags so cheap? Easy! There is no manufacturing cost. The manufacturing cost of new bars, coins, and rounds, have to be added into their selling price, whereas the U.S. silver coins’ manufacturing expense was paid by the government from sixty to a hundred years ago. “Bags” can be broken into half bags at a $50 extra cost to re-count, and re-bag them. “Bags” weight in at 56 bounds, and are a bit heavy for a little lady to heft, and are also not stackable, as are bars and tubes of coins. Still, if you want the most silver for the least dollars, “bags” are it. Protect yourself.