Why are the premiums so high on 90%?

[jim4silver]

Bought some 90% Kennedy halves today for 15.5X face. One of my local coin dealer friends was going to ship out a bunch of 90% and let me buy for roughly wholesale (I am sure he charged me a bit more but still way less than retail). I could have had quarters and dimes but like the halves better. Walkers and Franklins would have cost more but I like the unworn Kennedy halves as well or better when stacking.

As far as the high premiums for junk silver, I have talked to a couple of my local coin dealer contacts this week, one of whom has been in the business since the first time silver hit $50, and none have a clue. All say the same thing: the dealers (wholesale level) are paying more for it so we have to sell it for more. One coin dealer even said his store is not "stocking" junk silver anymore, but shipping it off as soon as they buy it (from the public).

In some places junk silver is costing MORE retail than brand new Eagles. WTF!! I know it has nothing to do with numis potential since we are talking about regular, run of the mill stuff. I tend to think there is something more going on that is making junk silver more in demand (I like conspiracy theories). One possible non conspiracy reason I can think of is that "end of the worlders" are buying it hoping for barter use later, but I don't believe that is the main reason for the surge in junk prices.

Maybe some of you have an idea? One completely off the wall idea I have is: Maybe some in the know believe some day regular silver bullion will be "confiscated" but they won't touch official currency? But if that were true Eagles would not cost less per ounce, since they could be said to be US currency since they are technically stamped with a dollar figure?

Other than that I don't have any good "conspiracy" type theories, maybe I need to ask TreasurePirate because he is a real "conspiracy theorist" and might have an idea.


Jim

 

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[TreasurePirate69]

I have absolutely no idea. I was really hoping to open this thread and get an explanation because I am completely baffled by the whole thing. I find it hard to believe that it is the "end of worlders" because I just don't think there are as many of them out there today as there was two years ago. So you'd think that if they were responsible we would have seen these types of premiums long ago instead of only recently.

The only thing I can guess is that the latest round of buying/demand is being driven by a new crowd of people who have somehow gotten it into their minds that junk silver will be worth more long term. Why they would think that I don't really know. I will say that even though we've always classified this stuff as "junk" with no numismatic potential, I think this mindset will change long term. Sure, this stuff will never be highly sought after numismatic items. But I foresee a time when people come back around to coin collecting and these coins that don't look like anything else we have today will suddenly be worth a slightly higher premium (in lower quantities). Even today I could go setup a table at a flea market and sell worn walking liberty halves for significantly over spot to people who have just never seen them before. Real coin collectors wouldn't be interested but there are always people who will spend $8 - $10 on some little trinket that they find to be fascinating. That doesn't mean you can make a killing selling this stuff that way. But I just think it goes to show that there will always be a market for older coins of historical but not numismatic value, especially ones that are silver.

 

[Marchas45]

Boy Jim your lucky as all the junk I see are going for 16X and 17x as for the why. the conspiracy nuts are pushing it as the best silver to hold and more recognisable than any other silver. Also the denomination is perfect in their minds for trading with.
I just traded 80 oz's for a Minelab CTX 3030 this afternoon so I'll need to make that up. Lol

P.S. See TreasurePirate69 you can trade Silver for product and just imagine what will happen when TSHTF. Lol

 

[jim4silver]

Boy Jim your lucky as all the junk I see are going for 16X and 17x as for the why. the conspiracy nuts are pushing it as the best silver to hold and more recognisable than any other silver. Also the denomination is perfect in their minds for trading with.
I just traded 80 oz's for a Minelab CTX 3030 this afternoon so I'll need to make that up. Lol

P.S. See TreasurePirate69 you can trade Silver for product and just imagine what will happen when TSHTF. Lol

I have thought about getting into metal detecting, but I don't know where I would be allowed to detect and where it would be considered a crime (trespassing, etc) in my particular area. I had a radio shack detector when I was a kid but it only found rusted bottle tops.

Jim

 

[Marchas45]

Start in your own back yard then find others in your area here on this site and ask questions. Hell your good at that.

P.S. My deal fell through on the detector. He wanted me to send the silver first and hope I'm not offended.

 

[jim4silver]

I have absolutely no idea. I was really hoping to open this thread and get an explanation because I am completely baffled by the whole thing. I find it hard to believe that it is the "end of worlders" because I just don't think there are as many of them out there today as there was two years ago. So you'd think that if they were responsible we would have seen these types of premiums long ago instead of only recently.

The only thing I can guess is that the latest round of buying/demand is being driven by a new crowd of people who have somehow gotten it into their minds that junk silver will be worth more long term. Why they would think that I don't really know. I will say that even though we've always classified this stuff as "junk" with no numismatic potential, I think this mindset will change long term. Sure, this stuff will never be highly sought after numismatic items. But I foresee a time when people come back around to coin collecting and these coins that don't look like anything else we have today will suddenly be worth a slightly higher premium (in lower quantities). Even today I could go setup a table at a flea market and sell worn walking liberty halves for significantly over spot to people who have just never seen them before. Real coin collectors wouldn't be interested but there are always people who will spend $8 - $10 on some little trinket that they find to be fascinating. That doesn't mean you can make a killing selling this stuff that way. But I just think it goes to show that there will always be a market for older coins of historical but not numismatic value, especially ones that are silver.

One thing I forgot to say is that the coin dealers said people coming in to buy are not buying junk silver from them hardly at all (maybe due to the high premiums?). They said the one ounce and ten ounce generics are doing well and some of course only want ASEs. But no volume buyers coming in and wanting rolls of junk coins or junk bags like in the old days.

That is why I think something else is afoot. I have no way of knowing, but I am sure we will find out later on.


PS I did hear a good "conspiracy" theory a while ago, not so much a conspiracy but something I wouldn't have thought about. One of my coin dealer friends said he heard that a lot of the cull and over worn US silver dollars were being bought up in large amounts and sent to China. His theory was that if this is true, they are melting them to make really nice fake numismatic US silver dollars and thus would have the exact correct silver/copper, etc metal content in the coins. Don't know if that is true but makes for good story telling I guess.


Jim

 

[jim4silver]

Start in your own back yard then find others in your area here on this site and ask questions. Hell your good at that.

P.S. My deal fell through on the detector. He wanted me to send the silver first and hope I'm not offended.

If I get one it won't be as fancy as one that costs 80 ounces of silver. Maybe I can still dig out (no pun intended) the old radio shack model from the 80's that I had.

Jim

 

[TreasurePirate69]

One thing I forgot to say is that the coin dealers said people coming in to buy are not buying junk silver from them hardly at all (maybe due to the high premiums?). They said the one ounce and ten ounce generics are doing well and some of course only want ASEs. But no volume buyers coming in and wanting rolls of junk coins or junk bags like in the old days.

That is why I think something else is afoot. I have no way of knowing, but I am sure we will find out later on.

PS I did hear a good "conspiracy" theory a while ago, not so much a conspiracy but something I wouldn't have thought about. One of my coin dealer friends said he heard that a lot of the cull and over worn US silver dollars were being bought up in large amounts and sent to China. His theory was that if this is true, they are melting them to make really nice fake numismatic US silver dollars and thus would have the exact correct silver/copper, etc metal content in the coins. Don't know if that is true but makes for good story telling I guess.

Jim

Hmmmmm... that is an interesting story about China. Sure makes you think.

 

[lastleg]

Jim

The old coinshooters combed the parks, schools, beaches, private yards and all the ghost towns
harvesting the pre-64 silvers from the top five inches of dirt. Now one is lucky to find just one mercury
dime in 6 hours of hard work. Many were sold in the Hunt days but many went into hiding waiting for
the next $50 surge. I sold quite a bit at half that but the ones who held too long saw $7 for year after
year, ad nauseum. Some sell but more hold indefinitely.

Key date coins in superb condition seems more likely to appreciate long term than "junk" imho.
I turned in 15 boxes of paper printing plates and only garnered a stamped 10 oz bar.

 

[golden ray]

On the remarks concerning China. If you have been paying attention to
the trade publications & even the news in general; you will come to the
same concluetion that many have.
China does not care at all as far as our anti-piracy laws & agreement.
They gladly sell fake gold ,silver, meteorites, etc. And in general, they are
the worlds biggest scammers.
Have had dealings with them myself on large gold projects, all fell through.