Chapter eighteen. What is silver worth?


The answer seems simple enough. Just look to see what the spot market today says. Right?

My idea is conceptual. We relate everything to dollars today. If you are in Poland, you relate to this in your currency - the Zloty. Much of Europe uses the Euro. Today you would buy silver in whatever currency was used where you live, probably.

But, as shown elsewhere, cash is trash! Dollars or whatever are paper or in a computer using 1s and 0s. But - what do any of these things really matter?

An ounce of silver is the real standard here, not paper money. That ounce of silver is the constant in this equation. How many of those sheets of paper must you have to trade for silver only matters while the faith in that currency exists. After that - all bets are off! Silver will continue to retain value. Silver is an actual store of value in itself. 
 

Our minds will continue to relate to our currencies for now. That is after all, what the current dealers request in return for their product. But I believe we should be thinking about what an ounce of silver is worth in real terms such as what it will buy. Today, we make two calculations to arrive at this. First we say my silver is worth some dollars. Then we see an item for sale for some dollars and conclude that we can buy that item if we first trade our silver for some dollars, then offer those paper dollars to buy the item. In reality we bought the item for a certain amount of silver didn't we?

As we see the decline of the dollar we will see that we can buy that "some" dollars item with less and less silver. One day a point will be reached when the item may be purchased directly using silver. I think that day is rapidly approaching. Silver itself will become the medium of exchange used by many people, if not most people.

Ask yourself this: Would you take silver in payment for an item TODAY? There are people that would. I would. There are some who are using Bitcoins. That isn't US currency, yet they accept it.

Just some things to think about is all . . .

Chapter seventeen. More about coin slabs.

Professional Coin Grading Service slab.
WARNING!

There are fake slabs out there. I have read that they are mostly Chinese made - just like with the coins themselves. There is a lot of money to be made by making a fake slab and encasing a coin which is a lower grade than the slab says it is.

It helps to avoid this by using only trusted sellers. At first, that won't be easy for you. After a bit you will make good decisions as your source proves itself. I have been lucky, because so far, I haven't bought a fake. 

For what it is worth, eBay "guarantees" your purchases. I don't know how that will shake out if you buy a fake and go to them with it. But, it is offered there in any event. The stats of each eBay seller are online so you may be relatively certain a seller with a few thousand sales and a 100% rating (or close to that) is probably safe.

There are web sites which go into this in detail if you are interested. 

One is here: Fakes

From what I can tell, unless you are stupid enough to buy a coin in a PCGS holder from a Chinese seller, at an obvious low price, you are pretty safe for now. But, stay alert!

I haven't checked into the NGC and other holders, but I'd be surprised if it weren't the same thing.

Now for the good part!

The slabs have evolved through the years and a few have become more valuable. Yes - the actual slab has made a coin more valuable! There are the "rattlers" which didn't hold the coin tightly and rattled. There are the old green holders (OGH) and many other varieties. Some, in and of themselves, can become valuable. A few are quite scarce since only made for a year for example before the next PCGS change.

To see the evolution of the PCGS slabs you can go here: Slabs evolve

I only recently (earlier today) found that page and discovered I may have a few pretty rare ones I bought in the mid and late 80s.

Chapter sixteen. Don't buy - invest


What you need to understand is that we have become accustomed to saying we "buy stuff" whenever we part with our hard earned currency.

We go to the store and buy food, we buy cars, toys, clothes and most anything else.

Have you ever heard someone say the went to the bank and "bought" a savings account? Me neither. Sure, the term is sometimes used for other investments. We do "buy" an IRA or a CD. I know that. But my point is that when we "buy" a silver coin or a ten-ounce bar of silver (yes - gold for the wealthy folks!) we aren't actually buying anything. We are investing currency into the precious metals market. We are trading a piece of paper (or a bunch of 0s and 1s in a computer) for a piece of silver. We are betting that the piece of silver is a better store of value than a piece of paper.

As with all bets, it is possible to lose! It is possible that those computer 0s and 1s will outperform silver. It is also possible to lose everything on a stock or, on an IRA as well. ALL investing is risky. Life itself is risky!

But ask yourself this: WHAT ARE THE CHANCES OF SILVER GOING DOWN TO ZERO? What is the possibility that precious metals will "tank" like a stock or bond can do? Everyone knows that investments are risky. We all know investing is almost like gambling. In the Market, we are gambling that this stock or that one will "perform" well. 

In the entire recorded history of mankind precious metals have ALWAYS been of value.

"Money" used as wallpaper!

So, when and if you trade dollars for metals, think about what you are doing. You are betting that precious metals will always retain value and hopefully outperform dollars. Stop thinking about "buying" metals. You are investing in the future.

PS: Worst case is if everything goes well and the dollar stays valid for our lifetime - you still have a store of value to pass on to your family.

Chapter fifteen. Handle with care

Cotton gloves.
To avoid leaving finger prints (which become permanent) or even light scratches on a coin, wear gloves. White cotton gloves, as shown, are used by many people and they are very inexpensive. I just purchased five pairs for six-dollars online. Cotton gloves are also sold at Walgreen's and other fine stores. They wont hold up for doing gardening but are plenty good enough to handle coins. You may use some other type glove of course. For example, rubber gloves are OK. I prefer the white cotton ones myself.

 NOTE: I understand that the professional coin graders handle coins with their bare hands. That is fine for them. I'm sure they use hand cleaner etc. to avoid the oils associated with tarnishing a coin. But for me and you, that is a really bad idea. I own a proof coin from 1988 which I purchased then myself. It has a nice smudge where I touched it some 25+ years ago. That smudge is permanent now and may well have cost me hundreds of dollars! Buy and wear gloves!

Remember, a small mark or scratch or a finger print on a coin can cost you a lot of money! It can make the difference between one grade and a lower grade, which could easily lower the value by half! In the higher grades this can be as much as seven times or even more in value. So be careful.

For slabbed coins it matters as well. Think of the plastic slab as a show case. Small marks or scratches lower "eye appeal" and reduce the value, even though the problem is not on the actual coin. So handle those slabs with care. If you harm a slab and must get it re-certified it can cost about twenty-dollars or more depending on which coin it is. I always wear gloves.

 My results in scratch removal: I have used Meguiar's Scratch X2.0 to polish coin slabs. The results are near perfect! On all minor abrasions or light scratches it works 100% of the time. Naturally, any deep scratches have now become a part of the slab and cannot be (easily) removed. Get that coin re certified if you want - or live with it as is. I am not saying only Meguiar's works. It is just the only one I have tried is all. Other brands may work as well.

If you decide to remove silver bars from the plastic in which they are often shipped, handle those bars with gloves too. Silver bars don't gain value with collectors in the ways coins do, but some are worth more due to a company going out of business or other reasons. Plus it just makes sense to keep them looking like new if possible. It costs you almost nothing and allows you to take pride in your collection. I know if I were buying, and had the choice between a shiny new looking silver bar or one that was ratted out I would pick the better looking one, and for that matter probably respect the seller more.

Make sure whatever glove you use is perfectly clean. Cotton is soft and does no damage. I also have a couple pairs of silk gloves which are even better for the feel you get. Personally I don't like rubber gloves and you need to toss them after use. The thicker ones wont give you the "feel" needed to handle a small coin.

Also, work over something soft. Put a towel on your desk or table to catch the coins when you drop them. And . . .
YOU WILL DROP THEM! 


Enjoy your new hobby

Chapter fourteen. Inflation or deflation?

 Our medium of exchange is . . .

 Today we use currency to pay for "stuff". Here in the USA we use dollar$. Usually they are a small slip of paper which proclaims it is a "note and legal tender" for some printed amount of dollars. WTH does that even really mean? IT ISN'T REALLY MONEY! It has zero store of value. It is only worth the amount printed on it because a government fiat tells you that.


People argue with me about this topic. They laugh and tell me that they can still go buy a TV with a few of those pieces of paper. They chide me about, "If I think it is worthless then trade me a few of those with 100 on them for some with a 1 on them." My favorite is, "You can't eat silver!"

As for not being able to eat silver. You can't eat paper either!
The difference is that today people readily exchange products for our fiat currency, but today they wont accept silver in payment. Today, the accepted medium of exchange remains fiat paper currencies. So silver, which you indeed "cannot eat", would first need to be exchanged for that fiat currency, then used to buy whatever product you wanted. The only difference therefore is that to "eat" silver would require two steps to acquire what you needed instead of just the one. But, that is just for TODAY.

As in many things in life, sometimes "facts" today become "lies" historically. Take the Zimbabwe dollar as an example. It replaced the Rhodesian dollar in 1980 and started off on a par with it. After a while they actually printed $100 trillion banknotes. No joke.

So, do I believe we will have inflation like they had? No! Ours will be far worse! In its effect at least. The Zimbabwe problem had little effect on people beyond their borders. In fact - most of you had no idea about what happened there. But let me assure you of this:
WHEN THE US DOLLAR CRASHES IT WILL BE FELT WORLD-WIDE!

When dollars are recognized as just paper - what will be used then to buy a TV? Food? Maybe I'm wrong, buy I suspect a person would then accept a one-ounce silver coin as a "medium of exchange". We will see how this shakes out. Since nothing even close to this has ever happened - all ideas are at best speculation.

It is quite possible there will be a strong deflation prior to the hyper inflation. Some believe it will go that way and it will entice people to dump stored value (precious metals and land). Many will, of course, sell off because they need to do so, or just through ignorance. It happens regularly when a stock drops. People try to cut their losses by getting out while they can, while those stocks still have some value. I believe that would be a big mistake for precious metals.
Hang in there!

Chapter thirteen. Obtain a safe or otherwise secure your investment


Place slabbed coins in one of these -
Place it all in something like this.

Silver has a problem. That is - it is a bulky way to store value. Historically, an ounce of gold is worth fifteen ounces of silver. So, basically, silver storage takes 15 times as much space as gold. As I mentioned early on, possession of precious metals is a balancing act between value and liquidity. An ounce of gold is far more valuable than an ounce of silver today, but what will it buy for you when the dollar crashes? Are you going to be able to buy groceries and get a clerk to give you back a pile of silver as change?

Remember when I said I DON'T KNOW what is going to happen? It applies here too.

What I do know is if you invest in silver, before long you will have enough to need a safe place to store it. Unfortunately, I haven't had this problem yet since every time I begin to collect some, I need to sell off to pay a bill etc.

Anyhow, you may be a smarter investor than I am. I hope so. So, you may need a safe place to keep it. Buying a home safe is one answer. A gun safe works well for this.

The cost of a safe can be pretty high. Depending on the size and quality they can range into the thousands of dollars. Cheaper safes are better than none. But a heavy-duty one bolted down is best.

 The safe pictured has both a combination lock as well as a key lock. Both are required to open it. Buy one like that then store the key off site someplace like at work or whatever. So, no matter what nobody can get in it without knowing where the key is and then going to get it. In my case that would by my job site which has a dozen armed guards working at any given time!

I am not going into the various ways to hide your stash here. That is available online in dozens of places. What I am saying is do something. Don't pile silver on a living room table. Think about the problem for yourself. But do something.

Chapter twelve. Storage


A ton of American Eagles!
Storage and/or display.
After you begin to accumulate silver in one form or another you will need to decide how to store it. When you buy bullion bars, they mostly come sealed in plastic from the dealer. So, if you are going to keep them in the wrap from the dealer (manufacturer) your problem is solved. If you purchase from a different source, it may be different. Plus, you may not like the plastic and want to do something else.

Coins sometimes arrive in "Airtight" plastic containers or in those little cardboard flips or maybe in small plastic bags. Again, this may solve your problem and leave you with no further action needed.

On the other hand, you may buy some junk silver which often arrives in small Manila envelopes or nothing at all. If this is so you will want to improve your collection by purchasing storage items for your bullion and/or coins.

The American Eagle $1.00 and Canadian Maple Leaf $5.00 coins store well in the mint tubes. Twenty for the Eagles and twenty-five fit in the Canadian tube. When you buy one at a time you wont have those tubes and need to buy them aftermarket, which is easy and not very costly.

 Bullion stores well in several ways. There are shipping tubes which hold twenty coins and keep them separated (see blog page one). Bullion rounds can be stored the same way in shipping tubes made for them. Junk silver dollars are nearly the same size as silver rounds and fit nicely in those shippers. You can buy Airtight plastic holders to hold each coin separately as well.

Slabbed, certified coins are already sealed in special plastic containers to protect them and to preserve the certification authentication. However, after you acquire some of these you may want to store those slabs in a box. PCGS and NGC (and the others) make boxes which store twenty slabs in slots separating the slabs from touching. Remember a scratch on the plastic is almost as bad as a scratch on that coin! It still looks bad and unless you pay to have it re-certified, it will reduce the eye appeal and value at resale.

 Here are a few photos to help clarify all this for you:

Flea Market coins are often in these.

Airtight makes most of these in clear plastic.

 Each coin or slab fits in the slots.

Coin "slab". NOT certified.
NOTE: Coin holders often have little hand written notes, like the quarter above, claiming the coin is "AU". Whatever it says is the OPINION of the seller and not the "Gospel" as they say!

Chapter eleven. Trusted dealers

OK. Let's get back on track.


One Hundred Trillion Dollars.

IF you decide you want to buy silver (or gold), From whom should you buy?

I already mentioned eBay in a previous entry. They, along with other online auctions, sell almost any type of silver you could ever want. Then there are dealers, both locally as well as online.

Most people probably live near one of these dealers. Here in the Palm Beaches there are several within easy driving distance. I find a better selection and often better prices online. Plus, there is usually a guarantee protecting you. For me, the local dealers have been limited in what they have to offer, and for some reason not always easy to deal with. But, that's just me.

Many "local dealers" also sell online! In which case they may be a really good place to deal. You can avoid shipping charges and simply drive over and pick up what you bought online. The shipping savings may give you an extra edge against others who may be bidding. For example, a coin selling for $80.00 plus $6.00 shipping gives you a six-dollar edge when bidding! Be sure to confirm with the dealer BEFOREHAND that you wish to pick up instead of having it shipped !

I will name a few online sellers for you to check out. This is but a very few of the many out there. Some sell coins and bullion and others either/or. Remember to shop around. You will find that from time to time one has the better price, then a week later the other is better. Don't marry any one of them. It is your hard earned currency you are spending.

Here is a short list with a comment or two as appropriate.

Good selection. Every sale is always FREE delivery. Sells "grouped" items at a discount. Has adequate stock without "sold out" on a lot, like some have. Fast delivery. Accurate sales. Discrete packaging. Very limited number of coins available. Coins priced a little higher than eBay coins.

Good selection. Offers FREE delivery on certain items and occasionally on everything they sell. Sells own brand items minted at Silvertowne. A few "sold out" items in a few sections like Canadian Maple Leaf coins and some other. Very limited number of numismatic coins available and prices on eBay sometimes better. Produces investor information pod casts.

Good selection. Usually requires minimum purchases. Sells own brand rounds. Good prices on larger quantity purchases. Producers of a great many videos regarding currencies and precious metals. Does not sell numismatic coins.

 jmbullion
Good selection. No minimum required. Priced competitively. Fast discrete shipping. Sells numismatics as well as bullion.

 apmex
Good selection. No minimum required. Priced competitively. Fast discrete shipping. No numismatics.

Supplies, JP'S Corner
Carries extensive inventory of coin and bullion related supplies like holders, tubes, albums etc.

 Onfireguy
Good selection. FREE shipping in lower 48.

Do a search or two to find dozens more.

Chapter ten. A piece of American History in your hand!

While US coins represent just a part of a typical silver collection, they are no doubt THE more interesting and enjoyable part!

Anna Williams posed for the Morgan Dollar.
Called a "Morgan" dollar. Named for the designer.
The pictured coin was struck at the US Mint in San Francisco in 1881. It is 136 years old (in 2017). The obverse (front) design is considered one of the most beautiful ever designed, and the Morgan dollar is the most sought after US coin by collectors. This pictured coin has been certified by the Professional Coin Grading Service (PCGS) Holding one of these in your hand is like holding a piece of history for our American republic!

My personal collecting involves part numismatist and part silver/gold "bug". Many, if not most, collectors will collect "type" sets. Most experts advise you to do this. A type set would entail having "all" of a particular series of coins. For example, you may wish to collect all the years of the Morgan dollars. Maybe even all the years and mint marks plus even the variations involved with errors etc. While I find that attractive - it simply is not what I am doing. 

I collect US (mostly) coins which are sometimes graded and are selling for an amount not much more than a raw version of the same kind of coin. This plus some raw (junk) coins which will perform the same. I believe these will increase in value along with the spot prices of precious metals and always hold their value in that vicinity. I believe this removes the risk associated with coins which are rare or mint errors etc. Yes, perhaps a penny selling for $3,000 dollars today will increase in value when the dollar crashes - but the number of customers (buyers) will be quite small and I can't imagine that buying food or clothing with a rare penny will ever happen. This is just my opinion and in no way advise.

Coin collecting gets in your blood!

 PS: It can be profitable, if you can ever bring yourself to sell one of these magnificent coins.

Chapter nine. Junk silver or silver bullion?


The term "junk silver" means basically a US silver coin which has no value other than the silver content. Bullion on the other hand is usually pure (99.9%) silver in various forms like bars, rounds or other. Silver bars are either pressed or poured.

When the dollar crashes and the world's economy fails some people who are today mostly ignorant about silver and gold will become your first "customers"! Be nice to them!

Although they are basically ignorant, they may have enough knowledge to make a purchase or sell something to you. That little knowledge will probably be the fact they can actually recognize a US "silver" coin.

Some will know what this is and accept it.
Junk (I really hate the term!) silver is available all over at this time. Silver US coins are always dated 1964 or before - remember. The exceptions aren't important now. Remember the date - Nineteen sixty-four 1964. Don't be ignorant. It will cost you sometime later. 1964 - got it!

Even worn out coins may be a rare date and be quite valuable. Make sure to check.
One silver dollar today sells for about the same as a one ounce silver bullion bar or round - maybe a tad less. Junk is sold by the pound, by the dollar value or sometimes as individual coins. Break out the calculator and shop wisely. Scan the sales online and compare. The prices sometimes vary a lot.

If using ebay prices to compare, make sure to see what the offering is. Selling price or bid price? You can also click to view sold items to see what amount things are actually being sold for.

After a period of time more people will learn about values and what to look for, so after a time your bullion will come into play. If all you own is bullion that's fine. You will just have to be a better salesperson at first!
As I said elsewhere - NOBODY knows for sure what is coming down! So my thoughts here could be all wrong! As the Terminators were so fond of saying: "We'll see . . ."

Chapter eight. All "silver" is not "pure" silver.


Silver bullion is generally made of 99.9% silver. It will have that printed on it someplace in all cases I know of. As long as you purchase from a reputable dealer you are pretty safe with bullion. This includes new coins produced by a few governments, which also state 99.9% or even 99.99% in the case of Canada.

US silver coins were made of 90% silver and 10% copper until 1964. After that they were made of a copper center clad with a silver colored surface (see  CLAD below). They no longer had any silver content. EXCEPT for the Kennedy half dollar, which went to 40% silver until 1970, then zero from 1971 forward. There are exceptions with some proof coins, made especially for collectors, which are 90% silver. It gets confusing and my suggestion is to simply avoid coins made after 1964.

Sterling silver is an alloy of silver containing 92.5% by mass of silver and 7.5% by mass of other metals, usually copper.

Nickel silver, German silver, Argentan, new silver, nickel brass, albata alpacca or electrum is a copper alloy with nickel and often zinc. The usual formulation is 60% copper, 20% nickel and 20% zinc. Nickel silver is named for its silvery appearance, but it contains no elemental silver unless plated. The name "German silver" refers to its development by 19th-century German metalworkers in imitation of the Chinese alloy known as paktong.
CLAD. This means coated. A very thin outer layer covers copper (usually) . Not enough silver to be worth much of anything.

Read the words carefully

 Did you catch it? The words seem to say "In God We Trust. But they don't. Look again.

Chapter seven. When the dollar crashes, then what?



I haven't a clue. Nothing like the crash of our dollar has ever happened in the history of mankind. There have been several nations whose currency crashed. Greece comes to mind. But, the world reserve currency isn't the Greek euro. Most of the world doesn't use euros for petroleum purchases.

The world reserve currency is the US dollar. Petroleum is traded in US dollars (mostly). The crash of the dollar will be felt world-wide, and probably overnight.

When that happens, and it will, what becomes of what we possess? Does our paper money revert to its intrinsic value - paper? Things we have financed will still be contracted and no doubt payable with dollars, even when they are otherwise worthless. I don't know that, it just seems right. Paper dollars may go out of existence in fact. Replaced with computer zeros and ones only.

Food, water and shelter will still be required. Our financed homes will be still there. We will still be able to stay out of the rain. Payment for them should still be in dollars somehow, since that is what the contract calls for. The food shelves may become empty overnight. Make sure you have enough to get by for at least some period of time until the system takes hold again.

Guns and ammo. A necessity. However, contrary to what a lot of websites tell you, a gun isn’t going to help you in "martial law". Nor will having a lot of guns. I actually can’t think of one situation where a gun helps someone survive martial law.   Do you really think your guns are going to overpower the tanks rolling down the street, or the guns of the entire military fleet outside your door? If you use your gun, it is just going to draw attention to you and get you locked up. So, be wise.

So, what becomes of silver then? Will stores start accepting it? If dollars cease to exist and they somehow require payment - how does that work? Will silver skyrocket in value? Should you accept currency for your silver toward the end? If so, exactly when? Should you wait until it reaches a hundred-dollars an ounce? More unknowns than knowns that's for sure.

People tell me "You can't eat silver." That's is true. But, when you can't buy shoes with dollars, what will be available to use then?

I do know that silver and gold have had value since the start of civilization and have never become worthless. Paper, on the other hand has never lasted as a fiat currency anytime anywhere it has been used. 100% of the time - fiat currencies have gone under and reduced in value to zero.
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