Getting the best deal on precious metals.
As Y2K See Y2K problem and Y2K compliant.
Y2K - Year 2000 draws closer, the demand for gold and silver is increasing. Even though official daily "spot" (the commodity exchange) prices for both metals has been weak, strong retail demand for gold and silver has led to higher prices and tight supplies.
Why do people invest in the metals when they don't pay interest or dividends? So-called hard money advocates point to Article 1, Section 10 of the Constitution, which declares, "No State shall ... make anything but gold and silver coin Silver coins are possibly the oldest mass form of coinage. Silver as a coinage metal has existed since the times of the Greeks. Their silver drachmas were popular trade coins. a tender in payment of debts."
There is an important reason why the Founding Fathers emphasized a sound currency. During the American Revolution American Revolution, 1775–83, struggle by which the Thirteen Colonies on the Atlantic seaboard of North America won independence from Great Britain and became the United States. It is also called the American War of Independence. , the Continental Congress issued paper notes that were known as Continentals. When they first circulated, Continentals were valued at one Spanish 8 reales (a silver coin about the size of a pre-1936 silver dollar), which was the standard trade coin of the era.
As time passed, a flood of Continentals emerged from the printing presses. Eventually, it took 600 Continentals to obtain one 8 reales silver piece. Why did this happen? The Continental was a fiat currency In economics, fiat currency or fiat money is money backed by government demand for it as legal tender in payment of legal liabilities, such as taxes. It is often associated with paper money because legal liabilities are created and settled by documents which are usually , meaning that it was not backed by gold and silver and was money only by fiat or order of the government.
Every national currency in the world (including the U.S. dollar) is now a fiat currency. When gold and silver certificates served as paper money, the government's ability to print notes was limited by the amount of precious metal in the vaults.
That discipline is completely eliminated when fiat currencies are the medium of exchange. Governments are free to produce as much "money" as their printing budgets allow. Until the larger-denomination bills were redesigned and made more secure earlier this decade, it literally cost the same amount (about 3 cents) to print a $1 bill as it did to print a $100 bill. As gold bug gold bug
leads to finding of Captain Kidd’s buried treasure. [Am. Lit.: Poe “The Gold Bug”]
See : Treasure and economist Ludwig von Mises Ludwig Heinrich Edler von Mises (September 29, 1881 – October 10, 1973) (pronounced [ˈluːtvɪç fɔn ˈmiːzəs] was a notable economist and a major influence on the modern libertarian movement. noted, "Only government can take commodities like paper and ink and make them worthless."
Since virtually all governments in history have had the spending habits of a mob of drunken sailors, it's no surprise that every fiat currency has been completely devalued de·val·ue also de·val·u·ate
v. de·val·ued also de·valu·at·ed, de·val·u·ing also de·val·u·at·ing, de·val·ues also de·val·u·ates
1. To lessen or cancel the value of. and destroyed over time. The dollar is no exception. Relatively speaking, the Yankee dollar has been "stable" when compared to Latin American, European and African currencies that were nuked by hyperinflation Hyperinflation
Extremely rapid or out of control inflation.
There is no precise numerical definition to hyperinflation. This is a situation where price increases are so out of control that the concept of inflation is meaningless. , but any honest evaluation quickly reveals what has happened to the "world's benchmark currency."
Hard money backers correctly note that the dollar has lost 90 to 95 percent of its value since 1940. For example, if someone had 50 $20 bills or $20 pre-1933 gold pieces in their possession at that time (Franklin D. Roosevelt banned gold ownership in 1933, but savvy folks hid theirs), they had the necessary assets to purchase a brand-new Buick.
Let's assume that the paper money and gold owners both stashed their nest eggs away, and their descendants just discovered the proceeds. Discounting anything over a modest amount of collectible value for the coins or currency, the paper money holder could only get an old, beat-up vehicle with his funds. The gold owner could still purchase a new Buick with his coins.
Privacy is a major concern for some people, and hard money investors are especially sensitive to that topic. Today, a moderately talented computer hacker can quickly discover your assets, liabilities and other financial information. Tangible assets don't appear on a computer screen.
With popular investments such as stocks and mutual funds, the asset is often nothing more than a recent statement or a computer entry. Bonds are merely an attractive IOU IOU
An abbreviation of the phrase "I owe you."
An IOU in the business community is actually a legally binding agreement between a borrower and a lender. The terms of the loan are set out in a contract, and, once it's signed, the two parties must abide by the terms , a promise to pay back a debt at some time in the future.
Gold and silver are not someone else's liability or subject to a debtor's whims. Like buildings, land and equipment, they are real wealth. However, the metals investor must maintain possession of the bullion to reap its benefits. There are countless stories of how naive people trusted a third party to store their goods only to find them missing when they needed the coins most.
More than any other asset, gold and silver have almost instant liquidity. You can sell the metals with a phone call to a precious metals Precious Metals
Valuable metals such as gold, iridium, palladium, platinum, and silver.
Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. dealer in another state, to another person, or to a local rare coin and bullion shop. The spot price of bullion might not be as high as what you had hoped it would be, but you can literally cash out in a minute. Try doing that with real estate or a '67 Mustang.
There are three general categories of bullion-related items. Numismatics numismatics (n'mĭzmăt`ĭks, –mĭs–), collection and study of coins, medals, and related objects as works of art and as sources of information. , or collectible coins, are a highly specialized field that often acts independently of the metals markets. Liquidity is lower, and buy/sell spreads can be steep. Prices are heavily based on scarcity, state of preservation and collector demand.
For example, a high-grade 1832 Bust dime priced at $850 has about 40 cents worth of silver. Coin collecting coin collecting
Systematic accumulation and study of coins, tokens, paper money, and objects of similar form and purpose. The long-held view that coin collecting began with the Italian Renaissance has been challenged by growing evidence that the activity is far more is more akin to other hobbies such as comic books or baseball cards than it is to using the metals as economic insurance. It can be a worthwhile pursuit, but don't look at an old coin as a precious metals purchase.
Semi-numismatics have been popularized by promoters ranging from honest businessmen to sleazy rip-off artists. These are coins such as pre-1933 U.S. $10 and $20 gold pieces and lower-priced silver dollars. While they are fairly common, these coins are no longer minted, so they have some collector demand along with a fair amount of bullion value.
One of the favorite arguments of the semi-numismatic specialists is the so-called "15 percent rule." This is a proposed IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. regulation from the mid-'80s that would have made private party sales to dealers of large quantities (25 or more one-ounce gold bullion Gold bullion
Investment-grade, pure gold, which may be smelted into gold coins or gold bars. coins, large silver hoards) of precious metals reportable to the Feds unless the items being sold had a 15 percent or greater premium above the bullion price for collector value.
"When the final regulations were done, there was no mention of that," according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Diane Piret of the Industry Council for Tangible Assets. "The 15 percent is not a determinant in any current law."
The real question is: If a dictatorial government was bent on Adj. 1. bent on - fixed in your purpose; "bent on going to the theater"; "dead set against intervening"; "out to win every event"
bent, dead set, out to knocking down your door and seizing bullion coins Bullion coins
Metal coins consisting of gold, silver, platinum, or palladium that are actively traded. Some examples include the American eagle and the Canadian maple leaf. Their price is directly connected to the underlying price of their metal. , wouldn't their thugs also scarf up the semi-numismatics? If things get that bad, all property is ripe for pillage PILLAGE. The taking by violence of private property by a victorious army from the citizens or subjects of the enemy. This, in modern times, is seldom allowed, and then, only when authorized by the commander or chief officer, at the place where the pillage is committed. . So why do firms aggressively promote the semi-numismatic stuff?
Profit margins are much fatter on the semis. Bullion items usually trade for a 2 to 7 percent spread, while the semi-numismatic coins have a 15 to 100 percent markup, depending on which company is doing the selling. Those who scream the loudest about the virtues of old $10s and $20s often lack any sense of objectivity and are acting out of self-interest.
Another favorite sales pitch is that when FDR banned gold, he exempted coins that had recognizable collector value, so the semi-numismatic coins are presumably pre·sum·a·ble
That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster. "safe" from future government attacks.
You could drive an 18-wheeler through the huge holes in that illogical argument. Since when has big government ever been known to act consistently or fairly? The "seizure exemption" is being broadcast with such volume and regularity that it's safe to say the bureaucrats are well aware of it. If you like older U.S. coins and have the knowledge to play that market, then they might be for you. However, you will pay a somewhat higher price per ounce for your gold.
Pure bullion coins are the third category. Their value is based almost entirely on precious metal content. This group includes recently minted gold pieces such as the American Eagle, Canadian Maple Leaf The Canadian Maple Leaf coins are bullion coins of gold, silver, platinum, or palladium. The coins are issued by the Royal Canadian Mint. See also
Coin minted in gold, such as the American Eagle or the Canadian Maple Leaf. such as the Austrian 20 and 100 corona, British sovereign, French, Swiss and Belgian 20 franc and Dutch 10 guilder also fall under this description. Mexico once issued gold coins ranging from the tiny 2 peso to the gargantuan gar·gan·tu·an
Of immense size, volume, or capacity; gigantic. See Synonyms at enormous.
huge or enormous [after Gargantua, a giant in Rabelais' 50 peso, which contains just over 1.2 ounces of gold.
In silver, the bullion choices include a wide range of privately minted one-ounce rounds and bars, silver Eagles and Maple Leafs, and circulated (not shiny) pre-1965 U.S. dimes, quarters and half dollars. Known in the trade as "junk silver Junk silver is an informal term used in the United States and Canada for any silver coin which is in only fair condition and has no collectible value above the bullion value of the silver it contains. ", these coins are anything but junky, especially for the small investor Small investor
An individual person investing in small quantities of stock or bonds. This group of investors makes up a minimal fraction of total stock ownership.
small investor .
If your primary purpose for buying silver is for potential barter use in a Y2K or economic meltdown, junk silver is definitely the way to go. Fourteen silver dimes equal just over one ounce of silver for greater divisibility di·vis·i·ble
Capable of being divided, especially with no remainder: 15 is divisible by 3 and 5.
di·vis and flexibility. You wouldn't want to be out trying to swap a one-ounce gold piece for a few gallons of gas or a sack of food.
Do your homework and learn about prices. While the vast majority of dealers are honest, there are more than a few slimeballs who prey on the uninformed. I recently saw a mass mailing from one firm offering tenth-ounce American Eagles for $60 to $70 each, depending on the quantity purchased. A fair price at that time would have been $34 to $37. Likewise, prices for common-date certified MS-63 $20 Saint-Gaudens gold coins can range from $575 to $1,200. Let the buyer beware!
There will always be at least a small premium over the spot price. The price of junk silver is quoted in multiples over face value. If a dealer says his silver dimes are "four times face," multiply four (or whatever the price is) times $1.40 to arrive at the cost per ounce. Since $1,000 face value bags often trade on the market, the price quoted might be the cost of a full bag. Smaller quantities may cost a little more per coin.
Is silver or gold the better choice? Hard money types would tell you to own some of both, but the beginner (especially one on a modest budget) should start with silver and move on to gold once a fair amount of silver has been obtained. Silver is historically cheap compared to gold at this time, and it tends to have more volatile price moves. For basic bartering and economic activity, silver is an ideal metal.
If you just want to have a flashy gold coin Gold coins are one of the oldest forms of money. The first gold coins in history were coined by the Lydian king Croesus in about 560 BC, not long after the first silver coins were minted by king Pheidon of Argos in about 700 BC. or two in your possession, the Eagle and Maple Leaf are minted in half-ounce, quarter-ounce and tenth-ounce versions along with the standard one-ounce model. The smaller pieces cost more per ounce than the one-ounce coins, but they do provide an option for the low-budget gold investor.
1. Of or relating to coins or currency.
2. Of or relating to numismatics.
[French numismatique, from Late Latin numisma, numismat-, News is a weekly publication that tracks the collector coin and bullion markets. Contact Krause Publications, 700 W. State St., Iola, WI 54990 for a sample copy. NN will provide you with current prices and trends and some education on how the markets work. COINage (48 80 Market St., Ventura, CA 93003) is a monthly magazine that often has articles on the bullion markets.
Listed below are experienced coin and bullion dealers who have a reputation for good customer service and competitive prices.
Camino Coin, P.O. Box 4231, Burlingame, CA 94011, (800) 348-8001
The Coin Shop, 2909 E. 20th St., Farmington, NM 87402, (505) 326-2156
Dillon Gage, 15301 Dallas Pkwy., Suite 200, Dallas, TX 75248, (972) 788-4765
Gaithersburg Coin Exchange, 16 E. Diamond Ave., Gaithersburg, MD 20877, (301) 948-6884
Julian Jarvis, P.O. Box 626, Greencastle, IN 46135, (765) 653-6612
Wayne Miller, JW Coins, 303 Fuller Ave., Helena, MT 59601, (406) 442-0713
Franklin Sanders, P.O. Box 341753, Memphis, TN 38184, (901) 853-6136. Sanders also writes and publishes The Moneychanger mon·ey·chang·er
1. One that exchanges money, as from one currency to another.
2. A machine that holds and dispenses coins. , a monthly newsletter and is the author of Silver Bonanza, a book on the history of silver usage and prices.
Silvertowne, P.O. Box 424, Winchester, IN 47394, (765) 584-7481
Tilden Co., P.O. Box 3501, Vero Beach, FL 32963, (561) 464-9928
Universal Coin & Precious Metals, 148 S. Dowlen, Beaumont, TX 77707, (409) 866-0836
F.J. Vollmer, 3 Towanda Service Rd., Bloomington, IL 61701, (309) 663-9494
RELATED ARTICLE: Y2K, market fears, heat up coin market
Coin dealers we talked with (in October) say August and September were their busiest months in many years. And the U. S. Mint sold more than 250,000 gold Eagle coins in August--compared with fewer than 100,000 for virtually every month since October, 1987. In fact, for most of this decade, monthly sales have been below 20,000. They attribute this tremendous increase to the volatile stock markets and Y2K.