What's the Story on Silver Coin Melts & Coin Premiums?
 

What's the Story on Silver Coin Melts & Coin Premiums?

By: Charleston Voice....

http://news.silverseek.com/Charlesto...1163381566.php

-- Posted 12 November, 2006 | Digg This Article



From what I can gather the best informed and collective opinion is that $500 million (face value) in pre-1964 90% US silver coins remain in existence. They have not gone into the previous silver melts. I believe those remaining to be in very 'safe hands'. This best guestimate is outside of the number of silver dollars remaining. I say this because those that held back in the 1980 melt have since 'camouflaged the pre-1964 coins with bullion eagles, bars and other bullion-related silver. It is those latter categories that will go into a future melt before the "junk" pre-1964 coins. I don't plan to ever sell my "junk" silver coins for fear I could never buy them back! I don't trade the G/S ratio with them; I sit tight. Plus, the halves I could never replenish w/o paying a premium over dimes & quarters today. Talk about a core portfolio! The irony is that today's silver bullion items are probably fabricated in large part from re-cycled pre-1964 coins melted in the 1980s!



With silver currently at $13.03, Tulving (just to use an example benchmark) is buying junk silver coins @$8,838 per $1,000 face circulated bag ($8.84/oz.). The silver melt value with silver at $13.03/oz. would be $9,316 (.715 X $13.03). Tulving is selling those same circulated bags @$9,188.



When silver certificates were being redeemed by the Fed they were being exchanged at $1.29 per dollar. What occurred, was that typically you had a "market maker" in your community who was paying, say $1.15 per dollar, and then would make the trip down to the nearest Federal Reserve Bank and redeem them in bulk @$1.29, but were not redeemed in silver coin, but in FRN's! Today they are just another FRN backed by nothing. This is what will occur, in my opinion, when the silver and gold ETFs blow up, or the government confiscates the ETF's metals - - your ETF shares, never being redeemable for the metal in the first place, will then even lose their supposed backing, and FRNs will be your only choice of weapons. You will be happy because you received the gold or silver paper dollar price equivalent, but not the real thing. But, then, unless you have a physical stash of silver, you'll have to just be a spectator as the silver price continues on into the next galaxy. Bye-bye.



Putting the $500 million pre-1964 silver coins in perspective to today:



The 2002 State Quarter production for the five states and both Philadelphia & Denver mints was 3,313,704,000 billion quarters. Just that one year's production of quarters only was more than $800 million. And that's not counting the additional dimes. Half dollar production has not been considerable. Subsequent years' productions have run apace of that. State quarters are being hoarded by the bag lot indicating Americans' ignorance of sound money vs. clad sandwich coins. These present day hoarders are to get a rude lesson in sound money vs. counterfeit when their quarters not only don't appreciate in numismatic terms, but actually buy less and less at their corner 9-11 store. These slugs will be plentiful for decades to come.



I don't know the total market capitalization for the silver mining stocks, but SSRI alone is about $1.2 billion with resources indicated to be 850M/ozs. PAAS is $1.5 billion with measured and indicated to be 242.3M/ozs. Silver mine production in 2005 was 641M/ozs. and demand was 912M/ozs, the difference being made up from "above ground stocks". Now, with nearly 70% of new silver coming from copper, zinc, nickel and other mining operations, the beauty in all this is that weaker copper and other industrial metal prices (recession?) will result in less silver being mined. You can do the math. You can add up the official US Mint numbers to determine the precise silver eagle production since 1986, but I'm gonna make a wild guess of 7M/year; so, for ten years a round-house number 70 million have been minted. All are Uncirculated, and aside from selected issues like the 1996, have no numismatic value which enables the 'collector urge' in some of us to be satisfied by putting together a date set.




The 1900 US census tells us the population was 76,212,168. This year we crossed 300 million, about a fourfold increase. In 1902 when we were still on the bimetallic standard, US quarter production was 18.5 million for the year. That's about one silver quarter for every fourth person. A hundred years later we're minting over five counterfeit quarters for every person. And, this in an age of credit cards! Now, I don't know where this exercise has lead us, except to point out two things: If we are to restore our freedoms and lost liberties, one element is essential for our survival and that is freely circulating specie. The second necessity is the full restoration of our 10th Amendment, ensuring a state's sovereignty with reserved powers not delegated to the federal government. A Constitutional Convention is not required nor desired, only recognition and adherence to same by our state legislatures is necessary. Our slide into socialism and total government has gone on longer than most of us would have imagined.



So, if sound money should circulate once again in our land, silver and gold coins will be saved (not hoarded) for the honest money characteristic. Their purchasing power will increase and not be inflated away with ever increasing issues. We will again be an honest people and vigilantly enforcing an honest government. I cannot say I am optimistic we will return to that culture in any of our lifetimes - a culture that would prefer one honest quarter for one in four than today's people who will take five dishonest ones for every man, woman and child. The 1902 quarter has no debt, whereas the 2002 quarters are all debt tokens which must be paid.



Colin collecting has taken a big hit these past thirty years, brought on by the "big melt" of 1980. Youngsters no longer have a circulating pool to which they can defer and find their starter coins. The number of retail coin dealers has shrunk. Even in Charleston there is no major retail coin dealer. When gold and silver prices roar it will be the pawn shops who will 'make the market' and folks are going to get ripped off.



In summary, it's taken me a lengthy dissertation to get to why "junk silver" (pre-1964) might offer you, or your descendents the best deal for generations to come. An uncirculated (brand new) 1902 Philadelphia quarter goes for $200, one from New Orleans will run you somewhere under $500, and a San Francisco will cost $500. Higher uncirculated grades will go for several thousands. Spend a minute checking prices here. Keep in mind that there was nothing unusual in the mintages of 1902, in that period it was just a routine production year.



Dump your state quarter slugs, and as part of your silver accumulation program, convert to "junk silver" coins. How many rolls of uncirculated quarters from the 1960s do you have? Ben Franklin halves? Too bad, because due to the high mintages of the period many went into the Big Melt, and today are at stiff premiums.



Right now the 90% silver coins are at about a 1 1/2% discount to melt (see above Tulving prices).



Watch the large refiners for backlogging silver to be refined. Three months seems to be their tolerance. How one does that, I don't know, but when they get backed-up look for silver to correct sharply.



I know one thing: I sure wish my Dad had set aside a bag or two of 1962-D quarters that I could sort thru and pull out some MS-67 grade coins that today sell for $9,000 EACH! Heck, I'd settle for MS-65's at $40 each; that's $1,600 a roll!



Those melts are nasty, but also an opportunity for the initiated.



AFTER THE MELTS: WHAT'S LEFT IN SILVER COINS?

Some of my web sites:

Early Manual Graph Chart, 1979-1980
1999 Buffett Run
1979-1988 Gold/Silver Analysis (LOTUS 1-2-3)


- - CV

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

$500 million * (0.715 oz troy per dollar) = 357,500,000 ounces of silver.

This is what's left (maybe) of the 1,300,000,000 ounces of silver in circulating U.S. coinage as of 1964.

Hmm. His bet sounds high to me, but not outrageous. That 1.3 billion-ounce figure as of 1964 is probably close to reality.

Consider the following occasions for melting coins:

i. Late '60s melting by industrial users who could get it for under spot just by pulling it out of circulation
ii. 1979-1980 melting in mass quantities.
iii. Post Y2K melting due to 90% bags selling at a steep discount -- disappointed survivalists aren't always savvy about selling when it's too cheap
iv. All the other melting over the years not included above.

Do you believe that more than 1/4 of the dimes, quarters, and halves necessary to support the U.S. economy in 1964 are still held in cloth bags and rolls somewhere? How much do you think was melted during under the four timeframes I mentioned above?

Good article. Plenty to think about here. IMO, selling your 90% is a bad idea.

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

Thanks.

500,000,000 Face = 500,000/$1000 Bags = $4,658,000,000 Melt @ $13.03/oz.

$35,750,000,000 would be junk silver's total value if silver was $100/oz.

We are underestimating silver's value at $100/oz. 37-38 Billion is not a lot to pay for something that is becoming scarcer and scarcer year after year!

I'm starting to feel like Ted Butler now....I'm going to sleep....:haha: :afraid: :rolleyes:

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

Drill, to put things in perspective I added up all the dimes, quarters and halves minted in the US for the years 1960, 1961, 1962, 1963 and 1964 and the $ amount in face value comes to about 1.181 billion dollars or $1,181,000,000.(x .723= 85.4 million ounces). So to think of all the face value of silver coins of all denominations minted since 1792 in the US and only 500 million $ left?..... HUH :eek:

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

I don't have the figure handy -- so to cover my ___ on this, I'll plead possible ignorance in advance -- but wasn't the production in 1964 absolutely massive? As in, gargantu-unbelieva-damn-tastic?

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

YEP....The 1964 dime, quarter and halves mintages were by far the largest. I've read that this was to try and fool the sheeple into not hoarding until the mint got over the hump and had enough of the slugs circulating. Also that 1964 dated coins were minted in 1965 and even until 196_? :y: I can remember though by the late 60's you had to look hard to find silver coins circulating.

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

Here is another perspective. If you know where it is, you could buy it all for spot or less. You would corner the silver market. The problem is you can't. How do you suck out any quantity of coins after what little is left from the bank sifting through the change for the past 42+ years?

The circulating coinage is clad. Not much remains outside of personal hoards. And most do not know what they are worth.

And we have a silver shortage.

Buy.

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

I wonder in what year it became really tough to find 90% in your pocket change? 1968?

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

Silverwood; I dont know how much time it took you to put this post together .

BUT HONESTLY YOUR WASTING YOUR TIME.

I mean not to put you down or nothing but what a waste of time.

Live in the here and now Bro!

We have to go into AFTERBURNERS NOW...................

Buy all the bullion you can and leverage mining stocks (sell the car) , options are a bargain right now.

Theres fortunes being made ! wake up!

In a flash we can say ohooooo! :getdown:

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

In the back of my mind in those days, I knew that I should be saving silver coins. Unfortunately these were my college years(poverty years) and with women ,drugs and rock&roll all I was able to save was a bright new roll of 64 Kennedies and a few rolls of quarters and dimes. Then in 1972 realizing I've missed the hoarding opportunity I started buying silver dollars in BU condition.:cheerful: Then in late 1977 I realized there was those 40% clad to be mined from the banks. So for the next 15 years I was very seriously searching the banks for what was left of our silver coin era.:bandito:

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

SO HOW'D YA DO?

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

So let's put it this way, I've been preparing and waiting for the silver horse to win the race for many years! I can smell it coming..:D and after all... "Theres fortunes being made ! wake up!" right? :beer:

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

:cool2: His estimate is way too high...

Cut it in half, and even then it's overly optimistic on what remains in hidden hoardes.

All US banks were under strict orders to confiscate and turn in every silver coin they could aquire.

They did a bang up job...silver coins disappeared like magic...

Being a rabid coin collector at that junction of US history it was not amazing to see silver disappear so fast...it was amazing that nobody cared.
Not one person out of a hundred even bothered to save back a silver dime back then...only the hard core collectors and the smart even bothered to stash anything at all.

The big rocket took off in 80-81 and I sold upwards of 1400 lbs at $47.00 an ounce....there were people selling quantities even larger than I owned.

Nope...it doesn't exist folks...the meltdown was huge...much bigger than he is aware of. What the banks failed to get their hands on via confiscation was mostly sold for melt in the run up...the banks had almost wiped US silver coinage off the face of the earth by then.

:Sorry:

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

They' never confiscated silver post 64 , from my musings theres a hell of a lot of physical pre 64 out there.

T. Butler estimates 1/2 a billion oz's I recollect and hes a conservative guy.

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

So, did you break even on your investment?

:birthday: :banana:

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

Hmm... I was born in 64, and I recall in the late 70s seeing 1964 dimes and quarters all th etime. They always stuck in my head because that was my birth year. To bad my parents didn't have more of a financial clue (despite thier respective college degrees)(they are from the Trust The Government Generation I guess??) or they might have told me to save them!

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

:cool2: Drill....Yep....came out very well indeed.

Ponce wasn't the only one who cashed out at the top.

My ex father in law cashed out over 2600 lbs of silver...made me feel like I needed to apply for welfare.

He retired a millionaire at 39...

Wonder why I still believe in miracles ?

:D :D :D

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

So, if my calculations are correct, you grossed about $855,400 from that sale? And your father in law grossed about $1,588,600? Now, 25 years ago, that was REAL money! Nice job.

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

I have a different recollection. I was born in 66, and I worked in my grandparents' store by the time I was about 12. (1978). I only saw silver once in a blue moon by 1978. I have a feeling that it was gone way before then.

Re: What's the Story on Silver Coin Melts & Coin Premiums?
 

Just an anecdote. I am travelling in Alberta this week and I have received 2 80% quarters in my change from different retailers!

It is still out there..., but hard to get any large quantities.