jim4silver
Silver Member
- Apr 15, 2008
- 3,662
- 495
Interesting to see that premiums on regular junk silver are going up, faster than generic .999. Locally, junk halves, quarters and dimes can be bought in small amounts for 60-75 cents over spot based on one ounce of pure silver. They were available at or below spot for quite a long time.
However, the generic, lower rung .999 like the Merry Christmas bars, Mother's Day bars, etc etc, can still be had for 50 cents and sometimes a few pennies less over spot. I am wondering if large amounts of junk are being accumulated by "preppers" who believe it will be used for barter or if the coins are being melted? It would not make sense for wholesalers to be melting junk now if it is selling for more than .999, which is now cheaper than junk and more efficient to refine than junk silver (90%).
I have a theory on why the premiums on junk have gone up, and it is partially that more people are buying junk silver for possible doomsday scenarios, but even more than that is there is less and less being sold to coin stores and such by regular folks who have been holding it for years (grandpa's coin collection). Back when I used to post on the CRHing forum, I always said that over time, less and less junk silver is being held by people because once that silver is either cashed in at a bank or sold to a coin store, that person who held it is likely to never get any more silver coins again. Over time, new junk silver coinage is not being made and circulated and now, 50+ years since silver coins were made for circulation, the available stashes held by non-investors are dwindling, especially after much of it has been sold since silver hit near 50 not too long ago. Thus, since less junk silver is being sold to coin stores by those holding grandpa's collection, said coin stores have to buy wholesale from other coin dealers to meet the demand from investors who come in to buy junk silver. This type of wholesale buying goes on all the time by coin stores when they need inventory but cannot meet that need by buying from customers who come into their stores. When a coin dealer buys wholesale, they have to pay much more than when buying from Joe Public who comes in off the street to sell his junk silver.
Although I own some junk silver, I don't buy it anymore. File this under probably will never happen to junk silver, but look at how easy it was for the gov to make it illegal to melt pennies and nickels or to export them. Granted, silver coins are not circulating currency anymore, but said junk coins are still US currency. If the gov ever wanted to do something to the silver market or supply, etc, how hard would it be to make new regulations that applied to silver US currency, such as banning its melting or exporting, etc? I guess the same argument could be made for ASEs to some extent. But for the gov to start regulating privately minted silver bars/rounds, would also bring into play silver jewelry, etc. Yes they could do all of the above, but it would seem easier and would probably bring less objections from Joe Public if they only did something to affect junk silver, which presumably there is still much out there in vaults or collections being held by investors.
Some say junk silver has a lowered risk for counterfeit, but I have seen a few well circulated looking silver dollars that were fakes (from China?), so I guess they could start doing that with smaller denomination coins as well if they wanted to.
Just my opinion.
Jim
However, the generic, lower rung .999 like the Merry Christmas bars, Mother's Day bars, etc etc, can still be had for 50 cents and sometimes a few pennies less over spot. I am wondering if large amounts of junk are being accumulated by "preppers" who believe it will be used for barter or if the coins are being melted? It would not make sense for wholesalers to be melting junk now if it is selling for more than .999, which is now cheaper than junk and more efficient to refine than junk silver (90%).
I have a theory on why the premiums on junk have gone up, and it is partially that more people are buying junk silver for possible doomsday scenarios, but even more than that is there is less and less being sold to coin stores and such by regular folks who have been holding it for years (grandpa's coin collection). Back when I used to post on the CRHing forum, I always said that over time, less and less junk silver is being held by people because once that silver is either cashed in at a bank or sold to a coin store, that person who held it is likely to never get any more silver coins again. Over time, new junk silver coinage is not being made and circulated and now, 50+ years since silver coins were made for circulation, the available stashes held by non-investors are dwindling, especially after much of it has been sold since silver hit near 50 not too long ago. Thus, since less junk silver is being sold to coin stores by those holding grandpa's collection, said coin stores have to buy wholesale from other coin dealers to meet the demand from investors who come in to buy junk silver. This type of wholesale buying goes on all the time by coin stores when they need inventory but cannot meet that need by buying from customers who come into their stores. When a coin dealer buys wholesale, they have to pay much more than when buying from Joe Public who comes in off the street to sell his junk silver.
Although I own some junk silver, I don't buy it anymore. File this under probably will never happen to junk silver, but look at how easy it was for the gov to make it illegal to melt pennies and nickels or to export them. Granted, silver coins are not circulating currency anymore, but said junk coins are still US currency. If the gov ever wanted to do something to the silver market or supply, etc, how hard would it be to make new regulations that applied to silver US currency, such as banning its melting or exporting, etc? I guess the same argument could be made for ASEs to some extent. But for the gov to start regulating privately minted silver bars/rounds, would also bring into play silver jewelry, etc. Yes they could do all of the above, but it would seem easier and would probably bring less objections from Joe Public if they only did something to affect junk silver, which presumably there is still much out there in vaults or collections being held by investors.
Some say junk silver has a lowered risk for counterfeit, but I have seen a few well circulated looking silver dollars that were fakes (from China?), so I guess they could start doing that with smaller denomination coins as well if they wanted to.
Just my opinion.
Jim
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