Chapter thirty. Toning - Like it? Or not?

Toning:

Since I began to focus more and more on coins I figured I'd offer up some more wisdom (ha) regarding what to look for when considering buying a coin.

Coins often become toned after years of being stored away. Vapors from drawer liners, coin roll paper, shelving paper etc. can cause all sorts of toning. Coin toning can intrinsically increase or decrease the value of coins. Natural coin toning can be quite beautiful. It can also be outrageously ugly.

Overall toned.

And because beauty is often times in the eye of the beholder, placing a value on a coin due to its toning can present problems.

Edge toned - usually from the roll paper.

Rainbow toned.

Should you pay extra or less for toned coins? After all, a coin that’s toned is going through a form of corrosion, right?

A coin that’s toned is in a normal "stage" of its life. It won’t disintegrate away before your eyes. Even in worst cases, the tone color will normally take centuries to reach its very darkest and usually its least attractive appearance.

There are several factors in determining the value of a coin, but at the very top for most people is its eye appeal. If a coin is ugly, unless extremely rare, people aren’t going to buy it and the value will be lower. If a coin is attractive AND toned, it’ll likely be worth more to some people.

With all things considered, a coin’s value is always going to be higher when it’s NATURALLY attractive. Historically, beautifully toned coins that are older garner a premium. It’s not just beauty that sets them apart but their "uniqueness".

Above information copied with slight changes from: Coin News Net

However, as I have tried to point out before, I am interested in "value" for my dollars in the future when the Dollar crashes. I doubt if a coin with toning is going to be worth more at that time. People should be able to use them as barter, and who will care then what it looks like? A certain amount of value is attached to looking in good condition. But, toning? I seriously doubt it will matter when buying food with it.

Personally, I prefer "blast white" as opposed to those which are toned.

Blast white! My favorite.

Cleaned coins:

NEVER clean a coin. That can only reduce its value. By this I don't mean you shouldn't remove mud or dirt loosely on the surface if that ever happens. What I mean is do not dip a coin in Tarnex or use silver polish or rub it with a scratch pad!

I will dip a coin in rubbing alcohol then dip in distilled water after that for a rinse. Other than that - I do not clean the coins!

Of course, if you buy a certified coin it will not have been cleaned - or the slab description will state that clearly. The experts can always tell and it will be labeled by them as "Cleaned", and the value goes into the crapper!

Damaged coins:

Unless the coin is extremely rare and holds some numismatic value despite someone drilling a hole in it - avoid these. Think melt value ONLY!

There are people repairing some of these coins - making them look almost as good as ones not damaged. Some people collect type sets and need a particular coin to complete a set of "every one" of something. The one missing could cost an arm and leg so, to complete their set they will purchase these repaired coins. Unless that describes you, avoid like ebola!

Chapter twenty-nine. My "hedge" against dropping prices.

If nothing else - silver has been volatile lately.

Going back just a little bit to April 2012 the spot price for silver was around $34 an ounce. Today it is at $17.60 an ounce. Nearly a 50% drop in dollar price. We know it will never fail and always have a store of value. But, is there any way to offset this (on paper) loss in our investments?

Yes, I think so.

Morgan dollar selling prices.

In this chart if you look at early 2012 and compare it with the current selling price you will immediately notice certified silver dollars (I used a 1921 MS64+ Morgan dollar as a typical example) dropped nowhere near the same as spot silver for the same period. This Morgan silver dollar went from $102.00 in April 2012 down to $94.00 in September 2014.

So, while silver spot prices dropped $16.40 for a 45.3% loss, the value of a 1921 Morgan dollar dropped just $8.00 for an 8% loss. A huge difference.

The reverse of this is also true. As silver spot prices rise, so do the coin prices. Coins rise and fall just like spot silver BUT FAR SLOWER, particularly on the downside. The upside rises more dramatically as silver spot prices rise. If silver were to jump to a hundred an ounce, trust me, no silver dollar could be bought for much less than that. The obvious reason for this is that with numismatics there is a completely separate market from the "silver bug" market. These coins have value for two reasons. First because they are made of silver or gold (precious metal). Secondly because they are sought after for their historic value and collect-ability.

A piece of American history in my hand!

What I consider a fine specimen. Why it isn't a PL is beyond me.

But, let me make this perfectly clear:

Unless you are knowledgeable regarding certified silver/gold coins, you can lose. And lose BIG! If that's the case, stick with bullion. Much of my blog deals with collectable coins (certified) and that is a start towards the knowledge you need to avoid big losses. But that alone isn't enough. You need to spend some online time yourself, learning what to buy. I get stuck sometimes myself paying too much or even buying a coin which isn't what I thought it was, and I have been at this since the mid 60s (and even before in some ways). Just be careful is all.

Chapter twenty-eight. Just what should you get?

Here in no particular order are my personal TOP picks :

1.   1/10  and 1/4 ounce American Gold Eagles.

2.   1/10 ounce Gold Krugerrands. 

3.   Junk US silver - any/all denominations.

4.  1/2 and one-ounce silver rounds by any reputable dealer.

5.   One ounce Canadian Silver Maple Leaf.

6.   One ounce USA American Eagle silver dollars, any date. Some demand a premium - I avoid those.

7.  One ounce silver bullion bars by any reputable dealer.

8. Certified US Morgan dollars - common date high production with the least added numismatic value.

9.  5 and 10 ounce silver bullion bars by any reputable dealer.

Brief explanations of some of my picks above:

#1 These smaller gold coins are still like a hundred dollar bill today! Easy to stash. Easy to carry around.
#3  Heavy on the Morgan dollars. Plus a roll or two of dimes and/or quarters.
#4  I currently prefer Sunshine Minting (see information about them below).
#5  Canadian Maples are one of the most recognizable silver coins on earth. Newer ones even have anti-counterfeiting engraving on them. Beautiful coin.
#6  Probably the most recognized new silver coins on earth.
#8  I avoid coins with a collector's premium due to mint errors or scarcity.

Silvertowne, JM Bullion and Sunshine Minting are people with whom I have had experience. They are reputable and a trusted source for my purchases. You can buy direct from Silvertowne (their own brand) while JM sells only other people's products. Sunshine products must be purchased in the secondary market. My experiences with AYDIN Coins and Jewelry as well as JM Bullion for Sunshine Mint products have been quite excellent. Again - bear in mind that I have absolutely no connection with these people whom I mention.

Many other suppliers, including most eBay dealers, are fine as well. I have no axe to grind here. Just my personal experiences is all.

Just buying silver or gold is one thing, but what is the reason to buy one type of silver vs. another? Here are examples of a few ways you can buy silver, some included in the lists above. Which is best? The choices are yours, but I'll add my opinion to each one.

First off, "junk" silver:

This is what? Anyone?

Yes. EVERYONE here knows what the above coin is. You all know it is a US quarter, plus you should know that, since it is older than 1965, it is 90% silver. Today's cost for this coin is minimal, albeit somewhat higher (per ounce of silver) than a silver bar for example would be.

King of coins!

This one is called a Morgan Dollar. The coin designer was named Morgan. One of the most recognizable silver dollars ever made. As a child I saw these in change all the time. If you put a few hundred of these back for tough times you will probably be pretty well off. Nobody counterfeits junk silver that I have ever heard of, and in bad times just about everyone will know what this coin is worth. 

Advantages: Very recognizable and certainly acceptable as silver coins, should the dollar crash. Easy to calculate value in purchases. Condition matters very little or not at all.

Disadvantages: Higher initial costs per ounce than many other sources of silver. Not practical for larger purchases. They are 90% silver and not pure silver (99.9%).

Next, silver bars or bullion bars:

This is a typical one ounce bar. They come in a variety of designs and are made by numerous companies. Many of these were made by companies which no longer are in business. A few demand a premium because of that. But, unless you intend to sell before the dollar crashes and turn a small profit - if they go up more - then I wouldn't worry much about who made the bar. The one pictured above has my name on it . . .  almost!

One ounce bars from Silvertowne.

Advantages: Available in almost any size your heart desires. The least initial cost for silver, especially in larger bars. Very liquid and somewhat recognizable for what they are. Easy to care for and condition is not crucial but keep them looking good if you can. 

Disadvantages:  Larger bars, while costing less per ounce, are not as liquid as junk silver or smaller bars. There are counterfeits out there and it requires a constant vigilance - especially buying in the secondary market or from an individual. When selling these it will require enough knowledge to show others they are real. Sunshine Minting solves this problem with a validation hologram type emblem minted directly into the bar. Canadian Maples use micro printing now as well to discourage the crooks.

Next, silver rounds - also a bullion:

Canadian issue five dollar coin (round).

United States silver eagle one dollar coin (round). This and the Canadian Maple Leaf are the two of the most recognizable coins in the world today.

Called "rounds" these are similar to the bars other than shape. The rounds are mostly one ounce or a half-ounce. Some are five ounce and ten ounce. I haven't seen any larger than that, but they probably exist somewhere.

Next, some words about Sunshine Minting:

 

Sunshine Minting holds a special place in my heart! As far as I know, they are the only ones that have placed the validation emblem on each bar and round produced. Older ones will not have that on them as this is relatively new for the company. Canada puts some micro printing on their newer coins (rounds). Geiger mints bars with a reeded edge to deter counterfeiting. Otherwise pretty much nothing I know of along those lines.

Quote from the SMI web page:

To help differentiate authentic SMI bullion from counterfeits, all SMI brand bullion products now have the new and innovative Mint Mark SI™ security feature. Mint Mark SI™ is an exclusive Scrambled Indicia security feature for all SMI brand bullion products. This is micro-engraving that is only visible by placing the Mint Mark SI™ decoding lens over the security pad.

Plastic decoder applied to bar yields the word "VALID".

Sunshine Minting supplies the US Government with blank silver rounds to use in producing the US Silver Eagle dollar coin (round). The company which imprints these with the hologram like mark and supplies the decoder also makes the US Passport anti-counterfeiting pages and is quite good at what they do.

Next, slabbed and certified coins:

A slabbed certified coin.

Slabbed and certified coin is a term meaning placed in a plastic protective slab. Certified means a group of experts has determined exactly what the coin is, its condition, it is genuine and usually guarantees to buy it from you for what you paid if they are wrong. Pretty good I'd say!

Advantages: Can hold their value better than pure silver in a downturn of the silver spot prices. Leaves no doubt as to exactly what you are buying. Generally are sell-able for what you paid based on what the silver spot price does. Just plain beautiful and a piece of Americana in your hand!

Disadvantages: Prices much higher than spot silver. Always consider the fact that a slabbed coin cost someone about twenty-dollars to get it certified. These coins cost a great deal more if you decide to buy other than common date, high production, coins. There is the risk that when the dollar crashes these will become worth no more than raw coins. Personally I doubt that will happen.

Foreign coins (Foreign to us here in the USA). There are a few worth obtaining here. The gold Krugerrand comes to mind. It is the original one-ounce gold bullion coin. Almost universally recognized. But, not made in silver.

Others are few and far between. Canadian silver coins are on a par with the US produced products. Even less susceptible to counterfeiting now with the micro printing. Some Mexican coins are made from silver.  I know of no Mexican coins (rounds) which are nearly as recognizable as either the Canadian or US coins. But, silver is silver. Others like Great Brittan, Australia, Germany (Geiger) and such exist. But, personally I would focus on what will be recognized most easily where you live. Your perspective could differ if you are reading this in London or Switzerland for example. Invest wisely for where you are.

Remember - being easily recognized by you and a prospective buyer is VERY IMPORTANT both today and after the the dollar crashes.

Chapter twenty-seven. President TRUMP!

We are currently experiencing rapid fire news from all over the globe. This is unlike anything I can remember.

November 8, 2016 President Donald J. Trump

DONALD TRUMP elected President! This is historic! George Washington became President with no political experience. Possibly another from the early days of our republic; but I know of none. So will everything be OK now? 

Initially the (manipulated) stock market took a nose dive. However, they recovered almost immediately after that initial sell-off. So what is next?

Our nation has an insurmountable amount of debt! Way more than President Trump can pay off! First he will need to have a face-off with the big banks. They, after all, control the economy. Only time will tell about what happens between them. Whatever the outcome is - we are still controlled by the dollar. When it fails we will also fail. Regardless as to who the President is!

BREXIT passed! GB has divorced itself from the EU. Gold shot up over $60 an ounce. Silver rose as well. It is not important how much the change was. Here is the real importance to us: The UK broke away from the EU and that move effected the entire financial world. Stocks dove. Metals went up. (Just like the initial results from the Trump win!) That effect was felt immediately worldwide by literally every creature on earth!

Can you begin to imagine what the effect of the crash of the dollar will have?

We have had internal rioting in Ferguson, Missouri and in Baltimore and New York. Organizations like Black Lives Matter preaching evil and appearing to move us toward a race war here - and then being guests of Obama at the White House! Russia involved in the Ukraine, US reporters being beheaded. Terror in France. The rise of ISIS and the return of Iraq to Islamists. Opposition to Donald Trump's candidacy has become violent in some places like nothing we've seen since the "brown shirts" of Hitler's rise to power!

Don't get me wrong here. I am not campaigning for Trump with my blog. Just pointing out the facts involved currently is all.

The internal scandals: NSA spying on US citizens, IRS targeting conservative groups, government officials pleading the 5th, voter fraud, news media being controlled, Fast and Furious gun running to Mexico, US officials murdered in Benghazi and covered up by our own government! Billions of dollars missing in the State Department under the watch of a Presidential candidate. Viable Presidential candidates preaching socialism - something which just a few years ago would have had them chased from town! And a lot of "political correctness" altering our way of life. All this with a news media that is not reporting what is going on!

Our once great republic has become one of the most corrupt nations on earth! Our currency is at risk. Our government cannot be trusted. Our national debt is beyond recovery for many reasons.

This list could go on and on. If you look around you can add dozens of items every day. In fact this particular page needs the most up-dates of all 50.

And, even if you don't like or don't agree with any of what I just typed - everyone senses there is simply something terribly WRONG!

The 2014 elections netted a huge gain for the Republicans, now controlling both houses of Congress. But, will that even matter to the economy in the long run? Watch the video below to learn why it simply CANNOT matter!

What has this to do with silver investments?  EVERYTHING! 

A part of these "many things" is the series of Quantitative Easing or QEs the government has been doing. In other words, our monetary system has been inundated with massive amounts of currency over the past half-dozen or more years. This massive increase in the currency supply is a root cause of inflation. The government, and only the government, can cause inflation in this way. Yet, despite how critical this is to our future, very few even know it is happening.

In addition to simply increasing the supply of money, the government borrows at interest from the Federal Reserve - which is a private bank! So, why borrow? Good question. The government both owns the printing presses and has the legal authority to create currency as needed - without borrowing anything! Indeed, we've done that before. But today they borrow anyhow, and a few big bankers get a lot of interest on money they never even had in the first place! If you did this, you would do time! They simply become the super-wealthy.

So why haven't we seen massive inflation? Yes, there is some. But not what you would expect with such a massive increase in the currency supply. Part of the reason is due to the methods used to report inflation. The numbers are manipulated to make inflation appear lower than it actually is. Everyone knows the prices have been rising at a greater rate than what we are being told. Groceries are way up. Housing is now on the rise. Plus many other things.

Another reason inflation is not as much as it seems it should, is the "velocity" of currency. When you pay for something, that money may get spent again and over again, and is actually multiplied in its effect on inflation. For example, say I give you a ten-dollar tip and you take a cab home with that ten-dollars. The cab driver buys gasoline and the attendant buys his lunch etc. etc.  Now the inflationary effect has multiplied several times. However, in bad times people to spend less and that velocity slows way down, slowing inflation. That has been happening because many have stopped or slowed their rate of spending.

But, there is a far greater reason for no hyper inflation yet. One which has yet to come home to roost. Large portions of the newly created currencies go out of the country. Neel Kashkari, Assistant Secretary of the treasury for Financial Stability, was asked who got those 700+ billions in bail-out dollars, and he flatly refused to say! But, he did admit they went mostly overseas. We buy products from all over the globe. New cars. Sewing machines. Hair dryers. Sports equipment. Shoes. You name it, we buy it - imported. That means many of our new dollars aren't staying here in the USA. Yes, the car salesman gets paid. But the car is made in Japan! 

Those dollars are going to return someday with a vengeance - and actually have begun to do so. China has received the lion's share of those dollars, and has been buying US land and other assets with the dollars. Other recipients are beginning to do the same thing. Dollars are beginning to return.

As these countries start seeing those dollars are just paper, which were simply printed up on machines and given out like free candy, the storm will begin. Everyone will then realize that to get any value out of a dollar they need to get rid of it ASAP! When this happens, and I believe it has started along with all that other crap in the beginning of this post, the crash begins . . .

In addition, much of what has been done with the QEs has been just in the computers. Actual paper is not boxed up and sent to China (for example). The computer age has ended the need to do that. Just a bunch of zeros and ones in a computer go there electronically. It happens instantly and efficiently. It also reduces the impact to inflation here. With the "money" not actually being printed and seen by people, the effect on inflation has been diminished substantially. However, it will take hold and hyper inflation will be upon us eventually. This can and will happen almost instantly. 

Don't expect to have time to prepare."

The time to prepare is NOW!

So, I suggest watching the news. See for yourself what is going on. Remain skeptical of the main stream news media which seems to me is either inept or complicit to what is happening.  "Fake News" is a term used now.

Wake up America! Our economy is in danger

Chapter twenty-six. Some terminologies.

There are way more words/terms in use than I have room for here. But, here are some which may come in handy as you expand into silver investing. For those who are investing only, and not really into the collecting part of the hobby, none of the following will be of any value, except to explain why sometimes a coin in an auction is priced higher than a seemingly exact same coin.

Coins.

Certified, slabbed coins come with short abbreviations on the slab from the grading service. A coin slab may have DMPL printed on it. That means Deep Mirror Proof Like. So, the coin isn't quite a proof but close in appearance. For your investment purposes this will probably not matter since these coins demand a premium and you may never recover the extra money later. But, just wanted you to know this because it comes up often.

Deep Mirror Proof Like.

In advertisements, the sellers use several abbreviations for slabbed certified coins. One, which I find misused repeatedly is OGH. That stands for Old Green Holder referring to a PCGS coin holder (slab) of early issue. The old slabs were slightly smaller and had a slightly different shape. They will not fit in the newer storage boxes correctly and would require one of the older, slightly smaller PCGS boxes or be placed inside a secondary holder, about which I know almost nothing. I just place them in the older boxes, which I happen to have a few of. Those older, smaller, boxes themselves are becoming quite rare today, since the size has been changed for many years now.

Unfortunately, many sellers themselves don't understand this, and often describe a coin as being in the OGH when in fact it is in a newer slab, but has the older "green label". Sellers list them as OGH and it drives me crazy! I try to search for OGH coins on eBay and most end up being just a newer holder with the green label. Those should be simply described as old green label, and not OGH. The coin pictured above is just that.

This is an OGH. Notice how different the edges are from the one above. RB means reddish/brown.

At first, PCGS failed to provide a slab which held the coin tightly but allowed to to rattle around inside just a little. These are called "rattlers" and are, of course, all OGH as well.

Rattler - up-side-down. PCGS would never do that. Coin rattles around and changes orientation. I know how to right this coin. Bought it and did it already in fact.

Many collectors consider that the older holders contain a more valuable coin than the newer ones. Opinions of many are that the experts were more conservative at first, and gave out lower ratings than they did later. This is perhaps true. I have no way of knowing for sure, and besides it would only matter if you were to break the coin out of the holder and get it re-certified getting a higher certification. In many cases you would (could) gain quite a lot of money, since just one increase in grade can raise the value by many hundreds of dollars! It is with this grading "mystery" that some buyers focus on the OGH and rattlers when buying coins, thus making the prices rise a little in the market place.

In a few rare cases the slab itself raises the value to a collector. By hundreds of dollars sometimes. One year PCGS made a different looking holder, then discontinued it. Automatically creating a collector's item.

Rare "Doily" label holder.

 The other brands of holders are something I know little about. I have always focused on PCGS.

FDI. What about First day Issue etc.?  Some coins are listed as FDI. This is supposed to mean First Day Issue. I personally can't imagine why that matters. Yes, they demand a premium after certification as FDI. But, does it really matter? From what I can tell, this is something that originated with the coin certification companies just to generate interest. How anyone can tell by looking at a coin what day it was minted is beyond me. I'm sure it is because of when it was shipped, but again - who really cares? 

Anyhow, unless you are deeply into the numismatic end of collecting, I say don't waste your money.

FBL means Full Bell Lines. Applies to Franklin half dollars.

FB. Full bands. Applies to both the Roosevelt and "mercury" dimes.  The PCGS "Full Bands" designation for a Roosevelt requires that both the upper and lower pair of bands on the torch be distinct and show full separation. The line dividing the bands must be complete and unbroken.

PL means Proof Like. (Pictured above) Sometimes this is called DMPL for Deep Mirror Proof Like. This is a coin which isn't a proof coin, but is one of the first produced off a new die at the mint. While not a deliberately polished die, as in a proof strike, it is none-the-less a very smooth almost polished looking die and will produce a very polished looking coin for the first strikes until it "wears in".