Junk Silver or Junk Bonds?

Junk Silver

“Junk silver” and “junk bags” are terms that refer to $1000 in U.S. coinage—dimes, quarters, or half dollars minted 1964 or earlier; commonly known junk bags consist of 90% silver. Junk bags of silver dollars are sold separately and have always held a higher premium.

We are talking about coins that are only in fair condition and have no collectible value above the bullion value or the “melt value.” The word “junk” refers only to the value of the coins as bullion, and “junk” is not scrap silver.

When these coins were freshly minted they contained 0.7234 troy ounces of silver per dollar of face value. In practice, the recognized weight of fine silver is 0.715 troy ounces per coin, or 715 troy ounces per bag—a bit less than original, due to wear. Thus the market recognized junk bags as containing 715 ounces of silver if smelted to 0.999 purity. Less common as junk silver are Kennedy half dollars from 1965 to 1970, which contained 40% silver.

In days gone by, junk bags of Canadian dimes and quarters were in the marketplace, but in today’s world very few exist. The Canadian coins contained 80% silver (0.600 troy ounces per dollar of face value) until 1966. In 1967, they were minted in both 80% and 50% varieties. In 1968, they either contained 50% silver or none at all ((such as the Cupro-Nickel). Dollars and half dollars were minted in 80% silver until 1967.

Junk silver coins are still considered legal tender and at many times have carried very low premiums. Today, however, the premium on junk bags is about 20% or more. There have been higher premiums near the peak of the silver price in 1980 and also during Y2K, when silver bags were in high demand.

For those beginning to invest in the real silver market, U.S. silver coins are easily recognized. In addition to being easy to describe to someone who has never seen a 90% silver coin in their lifetime, coins provide convenient divisibility. In other words they can be traded in small amounts, while a silver bar of perhaps 100 troy ounces cannot be divided or used for small transactions.

Simply stated, junk silver is popular among survivalists, but today it might be added among financial survivalists! In the event of a currency collapse, it is speculated by many in the precious metals community that silver coins could provide a viable alternative to today’s currency (scrip), commonly perceived to be money.

So, that is a very brief summary of “junk” silver and it must be pointed out that there is no default risk associated with owning silver. The price does vary along with all other assets, so you might risk not being able to trade your silver for the same amount of currency used for the initial purchase.

Junk Bonds

Now let’s look at “junk bonds.” A junk bond is a high yield bond that is rated below investment grade at the time of purchase. Bonds can also become “junk” if the market determines that the issuer’s risk has increased. For a quick example, at one time General Motors bonds carried a very high rating with the risk of default being extremely low, but today does anyone think that GM is capable of paying back the bondholders? These junk bonds are called “Fallen Angels.” Generally, junk bonds have a higher risk of default or other adverse credit events, but typically pay higher yields than better quality bonds.

Risks in all bond investments, including “high” quality bonds:

1. Inflation

2. Currency risk

3. Risk of Principal

4. Market Risk

5. Political Risk

6. Default Risk

7. Liquidity Risk

There are other risks but the point is made: bonds of any caliber have risk! In this day and age, nearly everyone is familiar with the fact that certain rating agencies described the risk of certain “assets” to be high grade at near zero risk. Today that is laughable but certainly no joke, as it has basically taken down the global markets to the present level, and the trust (confidence) in the system has been greatly damaged.

These days, we see many fleeing to government bonds, due to the perceived safety. However, it might be interesting to note the words of currency expert, the late Dr. Franz Pick, who said that government bonds are “certificates of guaranteed confiscation.”

We might ask if Franz Pick’s statement is true or false. Perhaps we can approach the question differently since the outstanding public debt is roughly $35,000 for everyone in the U.S. Simply ask yourself if you, your friends, and your neighbors are able to pony up the amount required on a per capita basis. If so, don’t worry be happy! But if roughly $140,000 per household is not in your petty cash drawer (or your neighbor’s) you might start to consider what really deserves to be called junk—bonds or silver.

Jimmy Rogers states, “I’m now selling long-term U.S. government bonds short. That’s the last bubble I can find in the U.S. I cannot imagine why anybody would give money to the U.S. government for 30 years for less than a 4% yield. I certainly wouldn’t. There are going to be gigantic amounts of bonds coming to the market, and inflation will be coming back.”

As the debt burden continues to increase, more and more people will see the light and realize that it is not the government responsible for paying off the bonds—it’s the people themselves. And where is that “money” coming from?

It is an honor to be,

David Morgan

Tags: 90% silver bags, bonds, government debt, inflation, junk bonds, junk silver, silver coins, silver investing

Pure Silver Coins: An Investor’s Delight

Be it a declining dollar, fears of inflation, collector’s ambition, or pure curiosity, pure silver coins offer an opportunity. To the investor it’s alternative to paper investments, and to the collector it’s ascetic and rare qualities. Either collector or investor pure silver coins are a selection for both. And, these coins are readily available from dealers, on the Internet, and at-or-in auctions.

As a pure silver coin, the coin needs to have 90-99% of silver. Indeed, many countries, such as U.S.A., United Kingdom, Mexico, China, and Australia produce an ounce of pure silver.

Examples of these silver coins are U.S. silver eagles, to the Canadian silver maple leaf, Chinese Panda, British sovereign and the variety issued by the Australian Mints.

More for the collector, but even coins featuring famous people are available from the late Princess Diana, Marylyn Monroe; even John Wane has a silver coin minted after him.

A quick search on the net will net you hundreds of varying types and styles and mintages but all with the same theme of purse silver but in different sizes from one troy ounce up to one-kilo coins.

If you do decide to seek out and buy pure silver coin sets, then be sure to buy from a reputable dealer–or the mint directly, if possible. Ensure the quality of the coin is near proof, proof or brilliant un-circulated. Also ensuring the coin is sealed in the original container and has a certificate to go with it will help maintain the value of the coin.

Indeed, it can be heaps of fun collecting a pure silver coin or set of coins or profitable for investors. Regardless of investor or collector these pure silver coins will shine into the future.

Tags: 90% silver bags, pure silver coins, silver investing

Junk Silver Ratings: The Top Five Places to Find Junk Silver

Coins may be call “junk silver,” but far from a junkie investment. Junk silver is a term thrown-on the coins by coin collectors because most of these coins won’t have a collector’s value. But junk silver has value in the eyes of silver investors. So, where do you find your next silver investment in junk silver? Here are a few ideas to start with. Rated from number one to five, we’ve listed five places to find junk silver as an investment.

1. eBay – rated number one because junk silver in thousands of varieties abound on eBay. If you’re looking for $5 dollars or $1,000 dollars of junk silver almost any amount can be found on eBay. In addition to the amount of junk silver, eBay also provides information on the credibility of each seller. As an investor buying your next asset, finding an honest seller could mean the difference between profit or loss.

If you do decide to use eBay, it’s easier to find junk silver if you search for more specific junk silver. For example searching eBay for “junk silver” will turn up fewer results than searching for terms like: pre-1964 U.S. Circulated Quarters, or Batch of Silver 1964 Nickels. Also be aware of the sellers rating, the seller’s information can be found to the right of a listing under the heading: “Meet the Seller.” These ratings will provide you with the honesty and credibility of the seller.

2. Lynn Coins – is rated right below eBay only because of the slightly less amount of options. You can find bags of junk silver from $129-$2,175. Although the options are limited, buyers won’t have to spend much time searching. Unlike eBay’s thousands of choices, at Lynn Coins there are 10 choices.

Even though the website looks a little out-of-date and somewhat unprofessional, Lynn Coins is a PayPal verified site—which means the sale has more security than third-party systems you might not know. Also, according to PayPal, Lynn Coins has been in business for seven years, and Lynn Coins has processed “3,406 buyers.”

3. C.C. Silver & Gold Inc. – this company offers a more professional approach. And for investors with a large purchase of $1,000 or more, C.C. is a better option than eBay. Unlike CMI, C.C. seems to have more coin choices as well, as of now C.C.’s website is showing options for Morgan Dollars, Peace Dollars, and 90% Silver coins with U.S. Half-dollars, Quarters, and Dimes all dated before 1964.

While browsing the selection, I noticed non-users will be confused at the process of purchasing what she is looking for. I had a hard time knowing what pull-down option to choose. So, if you don’t use the Internet well, CMI might be a better option.

4. CMI Gold & Silver – Offers junk silver bags to investors worried about professional businesses. Just take a look at the spotless design of CMI’s website. Now there’s a professional website. Anyways, a professional website does not necessarily increase the returns of an investor, and in this case CMI does offer junk silver at the same premium of silver bullion.

One of the downfalls of CMI is the lack of an on-line store. CMI wants buyers to call CMI as to “help you make the right decision for your precious metal investment.” However, professional CMI’s website, requiring investors to call CMI is rather inconvenient. For the Internet users, CMI is not for you; however, for some CMI is the place.

5. Monex Deposit Company – Along with the professional image CMI casts, Monex casts the same. Or it might be egotism, either way Monex says it “[has] led the industry in silver coin investing programs.” But that claim is hard to verify. Again, Internet shoppers will be disappointed because Monex wants you to call an account representative before you can make a purchase.

To concluded this article in rather simple terms, if you love the Internet use eBay, Lynn Coins, or C.C. Silver & Gold Inc., but if not use CMI or Monex. Likewise, if you have a limited amount of money, less than $500, use eBay, or Lynn Coins, but if you have more than $500 go to C.C. Silver & Gold Inc, CMI, or Monex.

Tags: 90% silver bags, junk silver, silver coins, silver investing

1932 – 1964 Silver Quarter: 90% silver

1932 – 1964 Silver Quarter is 90% silver. Use the Silver Melt Value calculator to see the value of silver in this coin. This quarter is classified as “junk silver“, read more about junk silver as an investment. You can also invest in silver using a Silver ETF.

Listed below are the mintage numbers for each year. The year column lists the year and mint mark on the coin where, D is for Denver, S is for San Francisco, and P is for Philadelphia. Also, a coin without a mint mark means the coin was minted in Philadelphia.

The Mintage column is the number of coins struck and released by the U.S. Mint.

The Numismatic Value Range column represents what people typically pay for that type of coin (usually a very wide price range depending on the condition and demand of the coin).

Tags: 90% silver bags, junk silver, silver investing, silver quarters

Junk Silver — U.S. Coins With 90% Silver

Junk silver is an informal term used in the United States and Canada for any silver coin which is in rough to fair condition. Junk silver usually, has no collectible value above the bullion value of the silver the coins contain.

Such coins are popular among investors seeking to invest in silver — particularly in small amounts. The word “junk” refers only to the value of the coins as a bullion investment and not to the actual condition of the coins; meaning, junk silver is not necessarily scrap silver.

The most commonly collected U.S. junk silver coins are the Mercury dimes and Roosevelt dimes, Washington quarters, and Franklin half dollars, and Kennedy half dollars, which are minted in or before 1964. These coins have a 90% silver composition (”coin silver”).

When minted some coins containe 0.7234 troy ounces of silver per dollar of face value. In practice, the silver content is usually assumed to be 0.715 ounces because circulation erodes the coins.

Less common junk silver is the Kennedy half dollars from 1965 to 1970, which contained 40% silver. The value of silver content is one reason investors buy junk silver coins. The percent of silver is less likely to come into question, than silver bullion bars, which require certification and authenticity tests.

A “bag” of junk silver, ($1000 face) contains approximately 715 ounces of silver. And, it will generally track the spot price of silver. If silver goes up ten cents, a bag of 90% silver coins will rise $70 or so; however, prices sometimes lag sharp spot price movements because of the liquidity of junk silver coins.

To gain the benefit of junk silver as an investment, investors must sell his or her coins through a coin dealer, on an on-line auction site, or classified advertising. Selling through any of those means usually takes a few weeks, therefore the liquidity of an investment is gradual.

When bags of circulated 90% silver coins can be bought — at about the same premium as 100-oz bars, or even at small premiums over 1-oz silver rounds — bags should be the first choice for many investors because of the reduction in price when an investor buys in bulk.

Buyers can expect to pay a little more for half-dollars than for dimes or quarters because of the higher silver content as well as half-dollars are much more popular. Yet another reason for the demand of half-dollars is fewer half-dollars were minted than dimes or quarters.

Although many investors buy junk silver coins as bullion investments, other investors buy junk 90% silver coins for “survival purposes.” These buyers fear the worst for the dollar. They fear the dollar will be printed until it becomes worthless. If this “worst-case scenario” were to become reality, then U.S. 90% silver coins would be used the purpose they were originally minted: as money.

The history of paper currencies have been to print until those currencies became worthless. Actually, today most dollars in circulation are not printed but are “electronic” or digital dollars, created by the Federal Reserve to increase the supply of money, which many argue increases inflation.

Choosing between junk silver coins or bullion bars is largely a matter of an investor’s goals and resources. Although before 1965, silver coins would be ideal for survival purposes. Junk silver coins sell at premium, or below premiums on 100-oz bars and, 1-oz silver rounds, junk silver coins hold greater upside price potential than .999 fine silver bullion products. At times, and especially during rising precious metals markets, circulated U.S. silver coins pick up premiums.

However, .999 fine bullion items (1,000-, 100-, and 10-oz bars and 1-oz rounds) can be produced at any time; as a result, there are limits to how high premiums on .999 fine silver bullion items can go.

To support this assertion — bags of 90% silver coins hold greater upside potential than .999 fine bullion items — a little background on junk silver coin prices and silver prices must be shown.

Over the last three decades, when precious metals enjoyed bull markets, 90% silver coins often achieved premiums of $1.20/oz to $1.50/oz over spot, sometimes as high at $2.50/oz. This is because many investors want silver in a form they know is silver, and pre-1965 U.S. 90% silver coins certainly fit the investors objective.

Following silver’s spike to $50/oz in the 1980’s, industrial silver users implemented efficiency moves which reduced industrial demand for silver. Furthermore, the rising prices of the 1970’s had spurred efforts to mine more silver and to increase the recovery of silver in the secondary market.

Today, reclaimed silver or recycled silver, is a major source of silver — the essential metal for many industrial consumptions.

Because of these efforts, silver went into “surplus” in the 1980’s. Meaning, newly refined silver exceeded industrial demand. This caused investors to avoid silver in the 1980’s, except for a shortly-lived strong market in 1987.

But, for most of the 1980’s, investors were net sellers of silver. Selling resulted in huge quantities of junk silver coins to be refined and converted into .999 fine silver.

Meanwhile, the Y2K scare in 2000, caused yet another huge melting of circulated 90% silver coins. Buying spurs junk 90% silver began when fears of the world’s computers would stop working on January 1, 2000.

Many people began preparing for the worst. And, fears were accelerated, as highly respected economists issued warnings and wrote books on the coming collapse.

Entire newsletters were dedicated to educating people: how to prepare. One recommendation was circulated instructed people, 90% silver coins should be stashed away so the coins could be used as money when banks closed and ATMs no longer dispensed $20 bills.

Consequently, people bought junk 90% silver coins at whatever prices, and bags picked up 50% premiums. The Y2K scare showed just how quickly 90% silver coins can pick up big premiums and that premiums on 90% silver coins can rise while the price of silver remains stagnant — during 1999, the price of silver was essentially unchanged.

And then, on January 3, 2000, as soon it became evident the world’s computers were not going to fail, investors began selling. And, sellers continued throughout the year, even into 2001. As the sell off continued — forcing down prices on 90% silver coins until they sold at discounts — some junk silver sold below the value of its silver content.

In addition to the sell off, untold quantities of bags were refined into .999 fine silver bullion. Therefore, bags of pre-1965 U.S. silver coins are in short supply.

After the Y2K crash became a nonevent, premiums on bags of 90% silver coins fell to record lows. Junk silver coins became less expensive than 100-oz silver bullion bars.

Indeed, the potential for 90% silver bags to pick up big premiums justifies the buying of bags circulated silver coins by investors who can manage the bags’ weight and bulk.

Tags: 90% silver bags, junk silver, silver coins, silver investing

1921 – 1935 Peace Dollar: 90% silver

1921 – 1935 Peace Dollar is 90% silver. Use the Silver Melt Value calculator to see the value of silver in this coin.

Listed below are the mintage numbers for each year. The year column lists the year and mint mark on the coin where, D is for Denver, S is for San Francisco, and P is for Philadelphia. Also, a coin without a mint mark means the coin was minted in Philadelphia.

The Mintage column is the number of coins struck and released by the U.S. Mint.

The Numismatic Value Range column represents what people typically pay for that type of coin (usually a very wide price range depending on the condition and demand of the coin).

Tags: 90% silver bags, junk silver, peace dollar, silver coins