I started brokering precious metals in 1977. At that time, silver was about $1.50 an ounce, and about all I had to sell, were ‘bags’ of U.S. silver coins, which then, and still do, contain $1,000 face value of the coins. 10,000 silver dimes, 4,000 silver quarters, or 2,000 silver half dollars. A ‘bag’ is heavy, so I had half bags or even quarter bags. 1964 was the last year the U.S. Treasury made silver coins. I well remember, at age 30, when news came out that silver coinage was being suspended, I started taking silver coins out of circulation as I got them in change, and kept them, although they were still only worth their face value for quite a few years. Anyone with a brain, could realize that they would be valuable in the future, due to the fact that they were made of silver, not nickel or copper.
Back in 1977, when I started this profession, ‘bags’ were still about the spot price per ounce, or within a dime or two. They have been as high as $3 per ounce over spot, and now they are less than a dollar per ounce over spot. A ‘bag’ has 715 ounces of pure silver in it, so to find out how much over spot a ‘bag’ is, simply divide the ‘bag’ price by 715, or a half bag times 2 and then divide by 750, and currently they are a bit less than a dollar over spot per ounce. The problem with U.S. silver coins, is that they are a minimum of 55 years old, and probably a lot older. They have been circulated, and many times are so well used that their dates are indistinguishable. Young people, if told that a silver quarter is worth 90 cents, they’ll think you’re nuts, because they have never heard of a silver U.S. coin. Age seems to have at least one advantage, since we can remember 1964. Pre-1964 U.S. silver coins do not have anything on them which says they are made of silver, so if you were going to use them as barter, there may be a problem finding someone who will take them. Silver coins do not have the copper mid-section on them, which is a giveaway, and also, pre 1964 dimes, quarters, and halves do not have their weights on them, but only that they are a dime, quarter or half.
The reason that ‘bags’ are not a good buy, is that (1) They are heavy. (2) They will be difficult to barter with, if that ever becomes necessary. (3) Their being made of 90% silver is difficult to prove. (4) Their silver content or weight in silver is not imprinted on the coin. (5) All the collectable pre-1964 U.S. coins have long ago been taken, and you will rarely, if ever, find one in a ‘bag’.
Silver in any shape, weight, purity, age, or name, is a very excellent method of protection from inflation, but we now have a choice, and to me, ‘bags’ are not a logical choice for the above reasons. Silver in denominations of ‘ounces,’ not dollars, year, or rarity, is what makes sense. It’s how many ounces you have which counts, and being able to handle a once ounce, or at the most a ten ounce bar or coin, to barter with, sell, or own, makes sense. ‘Bags’ are a reminder of what used to be, and not a method of storing wealth…at least to me. Don Stott – don@coloradogold.com, or 1-888-786-8822