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Prepper Gold and Silver: A Primer on Coins
To help you in investing in Precious metals as a hedge against inflation, I’ll show you what I’ve learned over the years, and my opinions on what to look for and whats important.
Before I do that there are a few terms you need to understand to help you.
SPOT PRICE: This is the commodity price for that metal on the market at the time dictate by the BID and ASK prices for that metal, and COMEX prices. Don’t get wrapped up in the Spot Price when buying or selling, it is only a starting point for the ultimate price you will buy or sell at and doesn’t take into account the NUMISMATIC value, which i will go over in a second.
MELT VALUE: This is the nominal value of a precious metal in an item, and what refiners would pay for that metal. That is say that your coin is .999 Fine Silver, whatever that amount is x Spot Price will dictate its melt value. However Melt value differs when talking about alloyed coins, most coins are alloyed with some other metals such copper in Gold coins to give it more durability and the melt price may be less because the refiners have to go through more expense to extract the pure metal from the alloy. Depending on the metal and coins demand the amount below or above melt will change, if the coin or metal is in high demand people may pay 5% over or under, it just depends on the market
NUMISMATIC VALUE: This is the premium over spot that the coin is worth depending on the collectibility of the coin. This all depends on the demand for the coin, an example is Kruggerands vs. American Gold Eagles. Because American Eagles are in higher demand and have more collectibility at the moment, they have a higher NUMISMATIC value than Krugerrands, as of October 31 2012, a $27 difference.
When investing in metals I don’t care about numismatic value, i pay it, but the lowest I can find. When buying coins for future use as a hedge against inflation you can buy anything that is gold because you will be able to go in have it tested trade it in for currency and buy what you need. In a truly bad situation where you have to barter with individuals you will want the things you barter with be easily recognizeable or proven to be what it is. if you walk up with a bar of gold, unless that individual has the ability to test it they may have to just take your word for it, which they may not. So in my opinion having a Book with common national coins, their measures, weights etc
Such as…
1901-2000 Standard Catalog of World Coins.
This book has photos, weights and measures for all world coins from the last century.
This has all the most recently minted World Coins, photos, weights and measures.
Along with this i would get….
To measure the weight
To measure the size
To inspect the quality
With all of this if ANYONE came to you with a coin and said hey i have a Canadian Maple leaf coin, you can inspect and check the measurements against the published ones, if they match up and it looks right, then ‘You have yourself a deal sir’ and if not ‘POUND SAND!’
GOLD
Gold is a great investment if you have the cash, the advantage of Gold over Silver is that it is a more compact form of wealth, A 1 oz Gold coin is worth currently $1700 compared to $32 for a 1 oz Silver Coin (as of October 2012). In this you can store a large amount of your wealth in just your pockets versus a backpack if you had to leave quickly.
I will go over my favorite coins and why in order of likeability, i wont go over every coin out there…i don’t have 2 months to work on one post!
KRUGERRAND
I like Kruggerands because they are a well-known Gold Coin, but hold a much lower numismatic value than other Gold coins, which means, you get MORE GOLD FOR YOUR DOLLAR!
I have a 1 one ounce coin and just recently acquired some 1/10 oz Kruggerands since the price was right.
AMERICAN GOLD EAGLE
I don’t own any one ounce Gold eagles, but have a few 1/10 ounces i bought back in the day. It is a beautiful coin and a favorite among collectors throughout the world. in my opinion it is one of most beautiful coins in the world. however it carries a much higher numismatic value that the Kruggerands. Today (11/12/12) it is around $46 higher than a Kruggerand.
There are also many other ‘common’ gold coins such as…
CANADIAN GOLD MAPLE LEAF
The Canadian Maple is usually about $10 more than the Kruggerand
AUSTRIAN GOLD PHILHARMONIC
The Austrian Philharmonic is usually about $10 more than the Krugerrand
CHINESE GOLD PANDA
The Chinese Panda is only a few dollars more than the Kruggerrand and you can find deals for these as well, a good one to keep an eye on.
As ive said there are pro’s and con’s to every coin. American Gold Eagles, are known everywhere, loved by collectors and if on the off-chance unicorns come fly in an save the day, or just after things settle down, collectors value will come into play again.
For me personally I want the most metal for my dollar, that’s why I go for the kruggerands for gold and pre-65′ for silver….for the most part! Like I said recognizable coins like this are good in that if someone is willing to trade for your gold or silver but doesn’t know much about it, and is uneasy you can pull out this book, show the measurements and then show them the coins measurements and that they match up, etc and you can prove it.
SILVER
Now I went over why I think silver is a better buy in my Precious Metals investing section and don’t want to rehash it again, this is more about WHAT to buy then WHY.
Silver is poor mans gold, it has intrinsic worth based on the current and historical value placed on it. You may not care about Gold or silver and think its stupid to pay 100x as much for a necklace of silver vs steel or gold-plated vs the real thing, etc. Good for you, but the rest of the world doesn’t think that so you can either accept the value the world places on these things or ignore it at your own peril. You wont be bartering and trading with yourself, you are trading with other people.
AMERICAN SILVER EAGLE
I absolutely love the silver eagles, and it is one of my favorite coins out there, I bought a lot of them in 2009 when i first started buying my bullion (they were $17 then!). In retrospect I wish i had bought half the amount I did (or even less) and used that to buy pre 65′ coinage. However just like gold, the silver eagles are easily recognizable and able to be proven as “real”.
A side note here, is that no one FAKES 1 oz silver pieces it’s too expensive to do, unless it weighs nothing and looks like aluminum, you don’t need to worry about someone selling you “fakes”. However check what the condition is noted as, if it is sold as “uncirculated” and you get it and it looks old and not mirrorlike and shiny, then you need to call them up, email, whatever and work on a partial refund, because if they are selling the coin as uncirculated at the uncirculated price, then you need to receive the value you paid for.
On a sidenote, Bullion Direct has just put on their site (11/2012), “Damaged” American Silver Eagles, These are about 2 dollars less than the “pristine” Silver Eagles. I bought some and am going to sell some of my ‘nicer’ ones to make a little money for preps. This way i can have the recognizability of the “real” coin with a lower price point. You can look into it for yourself. There is still 1 oz of silver in them, they just have errors or damages to their numismatic value.
CANADIAN SILVER MAPLE
Just like the Gold versions, the Canadian Maple offers you more silver for your dollar than the American Eagle does. I personally don’t own any, but i have seen them and they are a quality and beautiful coin.
AUSTRIAN SILVER PHILHARMONIC
Roughly about the same price as the Canadian Maple leaf. These are an option for lower cost, nationally minted Silver coins, however If you live in North America I would stick to coins with English on them for easier recognizability.
PRE-65′ COINAGE
Ok my favorite! and the favorite of many preppers. Here’s why I like them so much…
1) They are recognizable as U.S. coinage and as having 90% silver content.
2) They are VERY CHEAP, relative to other coins containing silver
3) They are much more divisible, and you can use them for very small purchases and sell off’s. Don’t read too much into Patriots the Coming Collapse while i see there being a time when you can trade these, not everyone has them so the idea that every swap meet and barter exchange is going to no longer be listed in “this=$1″ and now “This=.20 pre-65′ ” is a joke to me.
Anyways, ALL U.S. Dimes,Quarters and Half Dollars were 90% Silver until 1965, when they were then changed to the Copper/Nickel Clad that we know today. From 1965-1970 Half Dollars were reduced to 40% because Kennedy’s face had just been put on it and they didn’t want to dishonor the recently assassinated President (However dishonoring the American people was just ok). There were coins with 90% silver in them produced up to 1966 but they were stamped 1964 regardless.
I’ll go over some of the different types
Quarters
DIMES
This is called the MERCURY HEAD DIME, which was produced from 1916-1945
This is the standard Roosevelt Dime that we still know today, which replaced the Mercury Head in 1946 after the late Presidents Death. This coin like the rest was silver up until 1965.
HALF DOLLARS
This looks like the same as the American Silver Eagle right? Well the Walking Liberty design is the same. This Half Dollar was produced from 1916-1947.
This is the Franklin Half Dollar Produced from 1948-1963, It was replaced by the Kennedy Half Dollar in 1964.
The Kennedy Half Dollar was introduced in 1964 after the Presidents Assassination. the 1964 is the only 90% Silver Kennedy Half Dollar. The 1965-1970 versions were reduced to 40% Silver as explained above.
1965-1970 SILVER COINS
I already explained this, but I wanted to separate this with a different category in case you were skipping the text!
From 1965-1970 Kennedy Half Dollars were reduced to 40% Silver and then phased out entirely to the Copper Nickel Clad starting in 1971.
SILVER WAR NICKELS 35%
During WWII Nickel was in much higher demand for building “The Arsenal of Democracy”, so Nickels from 10-8-1942 – 1945 were replaced by a 35% Silver, 56% Copper and 9% manganese. Currently (11/12/2012) this nickels melt value would be 1.82 versus 2.34 for a Roosevelt Dime with Silver at $32 an ounce for future reference. These nickels are hard to find and valued more for their collectability value more than their silver content.
CONCLUSION
In my opinion, and what I am doing personally this is my take.
Gold: For compact storeable wealth, I can throw a few of these coins in my BOB and be able to have a months salary weighing a few ounces or less.
Silver: The bulk of your ‘investment’ to help buffer yourself against an economic collapse and use for bartering. Have put the vast bulk of my wealth and metals investment in this.
DO YOUR OWN RESEARCH
MAKE THE BEST DECISION FOR YOU AND YOUR FAMILY
DO NOT BASE ANYTHING ON WHAT I DO OR OTHERS DO
YOU ARE YOUR OWN BASTION OF LIBERTY AND YOU ALONE KNOW WHAT IS BEST FOR YOU
2012-11-18 06:02:18
Source: http://www.greatnorthernprepper.com/prepper-gold-and-silver-a-primer-on-coins/
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