Silver Eagles and Round Premiums Shrinking!

SUNSHINE MINTING 1 OZ. SILVER ROUND

I am not a silver round type of guy. I've always believed that US Junk Silver coins (pre 1965 circulated dimes, quarters, halves, and dollars) along with the American Silver Eagles (world's best selling bullion coins), were the best overall investment. The coins have a lot going for them. They're minted by the trusted US Mint, and are among the most purchased silver coins in history. In a future economic disruption trading scenario, they'd also be the easiest to explain to the average non-savy person. On the other hand, I shrink at the thought of having to explain just what the heck the above pictured silver round is and what it's worth. I know it's one ounce of fine silver by a trusted company, but to the average American in a strange new world it's just some weird slug that he's never seen or heard about before. Indeed, ask the average man on the street what privately minted money is, and he'll say counterfeit 9 times out of 10!

In the past, however, silver round enthusiasts have been able to claim the only advantage available to their precious metal choice -  the round was markedly cheaper per ounce than the American Eagle and junk silver coins. Even that advantage is now disappearing, and the following prices from APMEX.com speak volumes:

Cost per each American Silver Eagle 1 oz. 2011 (Qty 500+)          $37.18            $3.05 per coin premium


Cost per 1 oz 90% American Junk Silver    ($500 face value)           Spot to +5%   0 to +5% premium


Cost per 1 oz. Sunshine Minting Silver Round 2011 (Qty 500+)    $36.18             $2.05 per round
premium

So, what we're looking at now is only one dollar difference between a bullion COIN minted by the US Mint and currently the single best selling bullion product in the world, and a private company ROUND product unkown to the vast majority of Americans. To make matters worse for the round adherents, presently junk silver is selling at anywhere from spot to spot +5%. A great bargain for coins that were once used in everyday commerce, and whose likeness to the present nickel/copper drones requires only quick instruction to bring a trading partner up to snuff!

To sum up, in my book a buck difference between a silver round and a coin that is legitimate US money is just too insignificant to make its inclusion in my economic distress portfolio worthwhile. Of course, silver round boosters are notoriously hard-headed types (although I truly do love you guys). They'll probably hold onto their rounds until the cows not only come home, but also after they're milked and slaughtered for hamburger! They may even take some perverse joy at having to explain their trading medium to every single person they seek to do business with. For my part, I'll just fork over my junk silver and an occasional ASE and be on my way!

Rick

The Rise & Fall of American Coinage!

The power and wealth of a country and its trajectory in history can be viewed through the study of the changes that occur to their monetary system and coinage. A particularly interesting parallel can be drawn between the history of the Ancient Romans and the present-day USA. Although separated by several millenia, the USA seems intent on following the identical path that Ancient Rome walked from rise to ruin as mirrored in the gradual debasement of their silver coinage.

Ancient Rome: Silver Content of Denarius coin (about size of USA nickel coin)

Republican Period

269 BCE 6.8 grams

211 BCE 4.5 grams

Imperial Period

Emperor Augustus (Early Empire) 27 BCE - AD 14 3.9 grams

Emperor Nero (Early Empire) 54 AD - AD 68 3.4 grams

Mid - Late Empire Mid Third Century 3.0 grams (varied during period)

Emperor Gallienus (Late Empire) 260-268 AD (alone) Copper coin with thin silver wash


USA (Early Republic - Mid-Late Imperial Period)

American Republic Various Presidents 1792 - 1964 90% silver 10, 25, 50 cents, $1.00

Early Empire 1965 - 1969 40% silver halves - all others made from base metals

Mid - Late Empire 1970 - 2011 All circulating coins cupro-nickel base metals

Ancient Rome began to decrease the silver content of its coins as the economy suffered, and Emperors looked for new ways to gain revenue without raising taxes. Where once the denarius was widely accepted in commerce throughout the Western World and Asia, it eventually became worthless and shunned as useful coinage due to the gradual debasement. Although my not-so-subtle political commentary re the USA is subject to discussion, the pattern of the systemic devaluation of the American coinage is not. The USA is clearly following the same destructive path that Ancient Rome followed to its doom.

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.

Rick

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What's Greshams Law?

Gresham's Law was named for Sir Thomas Gresham, an English financier that lived 500 years ago in Tudor England. He observed that "bad money always drives out the good" whenever the government forces both coins to be accepted on a equal basis in commerce. "Good" money was defined as coins with commodity value equal to or higher than their governmental decreed value, and "bad" coins were slugs that were made from debased metals whose inherent commodity value was lower than the face amount. In essence, on a level field of commerce, Gresham noted that people tended to pay with the bad money and hoarded the good, while vendors gave change in the bad and likewise held onto the good.

In the USA the best example of Gresham's Law occurred in 1965 when the government eliminated the 90% silver content from dimes and quarters, and reduced the Kennedy half dollar to a 40% silver & 60% copper alloy. Immediately, the older precious metal coins all but disappeared from circulation as they were mason-jarred in favor of spending the new base metal coins and debased 1965 Kennedy 40% silver halves. In response to the popular hoarding of the old 90% silver coins LBJ famously pronounced, "if anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content".

We know today that Johnson was not only a lousy President, but also a similarly dismal prophet, as the value of 90% and 40% "junk silver" coins continues to soar! In fact, in 1971, only a few years after LBJ stepped down in disgrace, the US removed the last silver content from the circulating Kennedy half. Once again despite Johnson's earlier prediction, the 40% silver halves rapidly vanished from commercial transactions as the new base metal 50-cent pieces were thrown at cash registers in their place.

Yet another example of Gresham's Law in action occurred in December 2006 as the commodity prices of both copper and nickel rose substantially. Suddenly, the commodity value of 1909-1982 copper pennies and nickels were worth more in metal content than their face value as coins. In response, Congress passed a law making the exportation and melting down of pennies and nickels illegal. As in the case of the earlier 90% silver coins, many pennies and nickels are currently being hoarded by speculators hoping to take advantage of the valuable copper and nickel content in the old one-cent and the current five-cent pieces if/when the anti-melting law is repealed.

The conclusion to be drawn from Gresham's Law is obvious. Good money will always be desired as a reserve of wealth, especially while the US and other governments continue along the path of gradual debasement of coinage and proliferation of inherently worthless "fiat" paper money! Buy and hold silver and gold US coins, and sit back while the tsunami of paper money & slug coins wash all others away!

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.

Rick

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My Quarter is Better Than Yours!

The quarter in this picture is no ordinary coin. It's BETTER than the quarters you have jiggling around in your pocket or in the loose change jar in your kitchen. Why? Because it's a 90% silver US quarter dollar minted in 1964, and as I type this article its selling on eBay for 25x its face value. In other words, if you want my quarter, you're going to have to fork over 25 of yours!

You might be wondering, if you haven't been paying attention lately, just when the US Government stole your real money and gave you nearly worthless funny money? Well, starting in 1965 the US(less) Govt., switched from minting real silver dimes, quarters, and halves, to producing base metal slugs made from 92% copper and 8% nickel for a PHONY silver tint. The average US citizen barely noticed and never missed a beat. After all, the Washington quarter dollar still looked the same, right?

George Washington when he was alive made numerous statements against using anything but gold and silver as money. He believed that paper money (and by extension base metal coins), were primarily a tool of banks and governments to enslave & rob their citizens for their own enrichment. People who own gold and silver need no questionable promises from governments to keep their value. After all, both gold and silver have been valued for over 5000 years of human history, and are likely to continue to maintain that hold on our species. How long do you think the plummeting US Dollar will last before it's finally consigned to the wastebasket of history?

Rick

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies (below):

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