written by reader Junk Silver

By Anonymous Questions, June 30, 2016

Travis, where does the novice go for junk silver or, should that even be a hedge just in case everything else falls down around us? I’m looking to capture some physical silver for that purpose.

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Travis Johnson, Stock Gumshoe
July 2, 2016 2:41 pm

Some folks are particularly excited about “junk silver” because it’s the most divisible form of government-certified silver. That typically is a reference to pre-1965 quarters and dimes and half dollars, since the silver dollars from those years are slightly more valuable than the smaller coins.

Up until 1964, a dollar’s worth of dimes, quarters and half dollars was minted with 0.723 ounces of silver… now, since junk silver is usually heavily worn and sometimes even barely recognizable, the standard math is to assume that each dollar of “junk” has .715 ounces of silver. If you can buy an ounce of silver more cheaply this way than by buying miner rounds (coins minted by silver miners) or US American Eagle silver coins, then it might be a worthwhile way to salt away some silver — if it trades at a premium beyond common modern silver coins or bars, there’s not a huge reason to go with junk silver unless you think you’ll end up having to barter with the local gas station using your junk silver coins.

Most coin dealers will sell bags of these 90% silver “junk” coins at a smaller per-ounce premium to the silver price than other kinds of silver, but it’s not always cheaper, it’s important to check the math… and if buying online, check the shipping costs and what their fees might be, the math is important if you’re trying to find relative bargains. If buying in places like eBay or from folks you don’t know, be careful that they’re not sneaking in items that have less silver (or no silver, like most pre-1965 nickels). The coinflation website is a great place to get the melt value of various coins.

And, of course, you can poke around in your attic for old piggy banks and keep scouring your pocket change for the occasional pre-1965 quarter, which has about $3.50 worth of silver in it… you might get lucky.

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bobwins
Irregular
July 3, 2016 1:31 pm

Junk silver is becoming harder to find at a reasonable price. If paying $2-3 above spot is ok, you can still buy it from reputable coin dealers like Provident Metals, Gainesville or Apmex. Sometimes shipping can be a sneaky add to cost so always make your purchase based on total cost per oz of silver+shipping.

I buy many things on ebay but for some reason the sellers of junk coin on ebay try to deceive you with several scammy tricks. Instead of quoting a set price, they will try to sell you X pounds of coin. They don’t tell you that silver is priced in troy oz and they are selling you regular oz. A troy oz weighs more than a regular oz.

If you go to Provident or Gainesville, they will quote you a price for X$ of face value junk silver. Usually around 14 times the face value of the coins. As silver rises, that ratio will change. I can remember buying junk for over 20X face value.

Go here to find out what the actual silver in various junk silver coins is worth:
http://www.coinflation.com/

Also be cautious because all junk silver is not created equal. Dimes, qtrs and half dollars before 1965 are 90% silver. But there are 40% silver coins as well as war nickels from WWII with different silver values so check coinflation.com before buying.

Another place that you can occasionally find junk silver locally are craigslist ads. I found a guy who sold me junk for reasonable prices but had to drive a few miles to meet him at a public place. When you are buying from a private individual, you want to meet in a public place. He doesn’t want to let you know where he lives so you can rob him later and you don’t want to go to a strange house where you might get mugged with cash on you. Meet in a public place like a coffee shop where you can sit down and inspect and count the coins before paying cash.

The supposed advantage of junk silver is that you can use it if all hell breaks loose and we are in a barter economy. The problem with that scenario is that if things are that bad, carrying around a bunch of silver coins will get noticed and somebody may follow you home to get the rest of them from you.

So since premiums over the spot price of silver have risen so much, my purchases have declined. You can also buy govt issued silver coins for similar premiums. Maybe some american silver eagles or Canadian silver maples. There are also lots of coin dealers that have taken to issuing silver rounds. These are minted coins, some with very nice designs, that are not govt issue but are pure silver coins. They typically call them rounds to distinguish the fact that they are not govt issue.

Good luck.

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