90% vs. 40%
 

Hello everyone,

First, I'd like to say that this is one of the most interesting forums I've been on. I visit pretty much every other day!

Now for my question - I see that many of you tout the 90% silver coins. I've seen bags of 40% around - and they carry lower premiums in general vs. the 90% coins. What advantages/disadvantages are there to 40% vs. 90% coins? I'd like to know before I start buying anything and make a mistake.

Thanks in advance!

~MMN Maniac

Re: 90% vs. 40%
 

Yeah Nailbender, but you have read it so often, you could probably tell it!

Why are you buying PM's?
If it is to take advantage of the huge increase in the price we all believe is in the not too distant future, then you want to get the most metal for your dollar.
If it is because you believe we are headed for a financial meltdown and that gold and silver will become money again, then you want to buy both 90% and 40%. Buy in this order: 90% dimes, 40% halves, 90% quarters, 90% halves, 1/10 oz. Eagles, 1/4 oz. Eagles, 1/2 oz. Eagles, and 1 oz eagles. You may want to buy some 1 oz silver rounds between the 90% halves and the 1/10 oz. gold, and you might even consider some 10 oz silver bars, but I would not buy any silver dollars as the premium on them is too high. Also, there was some problems with the 100 oz. silver bars back in the 80's, with people drilling and filling, and it will probably happen again in this run-up, so they will sell at a discount. This is because they will have to be smelted to prove silver content. The seller will have to pay the smeltting cost.

Re: 90% vs. 40%
 

Question from a new member here. Why not load up on the 40% halves as they have the highest face value in relation to their silver content? There's not much difference between the 90% and 40% as far as how much you pay per ounce of silver and it would seem your down side is more limited with the 40% because the face value is higher. Is there some other negative with 40% other than that there would be more of it to physically store. Anybody have any comments on this?

Re: 90% vs. 40%
 

The other downside to 40% halves is that they are harder/costlier to refine than 90% pure silver. Refineries are less likely to want to take these in so these are viewed as less desirable to own. 35% war nickles have for years traded for under spot prices because of this. In short, the silver content in these is valued less than 90%+ silver because of the higher costs to convert it to 99.9% fine silver.

The higher face value could potentially make a decent deflation hedge though. If the USD doubled in purchasing value in a deflationary environment, you'd break even and more importantly, have actual legal tender cash to take advantage of the fire sales. In a deflation the person who loses the least comes out ahead.

40% halves probably are the best silver play to guard against failures in the monetary system that result in either deflation or inflation. There are compelling arguements for either one or even both. If you have the space, owning some 40% is a one of the few ways to diversify your silver holdings. To keep it simple I maintain 25% of my silver US coinage in each of the main types: 90% dimes, 90% quarters, 90% halves, and 40% halves. This would be handy if we ever did barter with silver coins again, but I'm skeptical of that. Anythings possible though.

Re: 90% vs. 40%
 

Very nice answer Irish!!!!!!!!!!!!!!!!!!! Also note that Tulving is out of 40% and the premium on the 90% has gone up considerably

Re: 90% vs. 40%
 

Thanks, Romir! I hadn't considered the higher cost to refine the 40%. I like the hedge idea, though.

Re: 90% vs. 40%
 

Irish says: Why are you buying PM's?

I'm buying PM's b/c I also believe that in the not-too-distant future, the FRN system is FUBAR'd.. I'm buying for keeps, not to trade back and forth.

Irish says: ...then you want to buy both 90% and 40%. Buy in this order: 90% dimes, 40% halves, 90% quarters, 90% halves, 1/10 oz. Eagles, 1/4 oz. Eagles, 1/2 oz. Eagles, and 1 oz eagles....

Why this particular buy order? When I do things, I always like to understand WHY - I'm sure you have a very good reasoning behind it. I'd appreciate any insight you can give. =)

Right now, I'm just getting started. Don't really have much of anything. Thanks, guys!

~MMN Maniac

PS Being the paranoid SOB that I am, I'll be posting under another name soon.. I use the current name in all my internet travels.. so a simple google search will eventually ID who I really am in real life.. don't want to make myself 'traceable,' in case the govt decides to start surfing these forums & start a list of physical addresses to search during confiscation times.. heh. =P

Re: 90% vs. 40%
 

QUOTE:
PS Being the paranoid SOB that I am, I'll be posting under another name soon.. I use the current name in all my internet travels.. so a simple google search will eventually ID who I really am in real life.. don't want to make myself 'traceable,' in case the govt decides to start surfing these forums & start a list of physical addresses to search during confiscation times.. heh. =P

Like my buddy Irish says, When they come for my precious metals, they're gonna find some LEAD mixed in there!

Re: 90% vs. 40%
 

That is the order of the silver they contain.
90% dimes contain .0724 oz. of silver, 40% halves contain .1479 oz. of silver, 90% quarters contain .181 oz. of silver and 90% halves contain .3619 oz. of silver. If you buy them in that order, and TSHTF before you are finished with your purchasing, you will have positioned yourself as best you could, to conduct "business."

Re: 90% vs. 40%
 

Why necessarily start out with small amounts of silver? What if one could afford more? Do you still recommend starting out small anyways? What's the reasoning - is it for trading purposes WTSHTF? (i.e. if Silver becomes, say, $100/oz, kinda hard to break a 40% halve to buy a meal for a family of four :P)

Sorry to ask so many questions. Want to know more!

Re: 90% vs. 40%
 

That is exactly the reason!
Figure out before hand how much physical you hope to have and buy 25% of that amount in dimes. If you finish your "stash" and decide to buy more, then repeat step one from above.

Re: 90% vs. 40%
 

Where do u suggest i buy 90% dimes from? I didnt see them on AJPM or Tulving. I dunno who else to 'trust.' Any suggestions?

Re: 90% vs. 40%
 

Contact Tulving, he has sold dimes in the past, and may be able to get you some. He sells only in $1000 bags and that has been a problem for some and I have sent them here: http://lynncoins.com/jsilv.htm I have bought here also.
You will find the premiums quite a bit higher, but that's what happens when you buy in smaller quantities.

Re: 90% vs. 40%
 

how come tulving doesn't advertise dimes? i asked for a 1/10 oz chinese panda on my last order, and the guy said, 'we advertise whatever we have... sorry!' I naturally assumed that they didn't have it since they didn't advertise.. hm... :(

Re: 90% vs. 40%
 

I said to contact him, he may be able to get some for you. Maybe he can not. If you ask him to get some, he may be able to do so. I don't know anyone with more contacts in the bulk coin business.

Re: 90% vs. 40%
 

Thanks Nailbender, I didn't go look at the site again, I'm glad you did!
I knew I had bought dimes from him, but didn't know his current stock.

Re: 90% vs. 40%
 

Yes the cost to refine 40 % is more but remember the other 60% is mostly copper and that is up in price also the same as it was in the early 80's and then many times the premium on 40% was higher than the 90% because of the higher cost of copper

Re: 90% vs. 40%
 

IrishGold, you once recommended http://www.scpm.com/goldsilverbullion.php and I'm glad you did, thanks! I'm happy to report that I've had multiple positive transactions with them. I've paid them with credit cards, cashiers checks, and bank wires without a problem. Right now they're quoting $440 shipped for $100 face while Lynncoins is quoting $575.60. They don't update their site much because it doesn't get many orders so it's best to call them to place the order so it goes through. Silver has gone up 6 cents since they updated it so they'd like to charge more to reflect that. They were able to send me either dimes or quarters when I requested but it depends on their stock.
edit: SCPM updated their site and the price stayed the same (435 + $5 shipping (which is really a credit card fee, they haven't charged me it over the phone when paying by wire/check). $440 divided by 71.5 = 6.15 an ounce.

Re: 90% vs. 40%
 

Romir, I'm glad you have been happy with Southern Coins. They do a pretty good job for coon-a$$es:haha: