junk_silverAs I can afford to do it, I have been buy­ing sil­ver.  Most­ly sil­ver rounds. I have a small stash of sil­ver rounds pri­mar­i­ly in hopes of hedg­ing my bets against eco­nom­ic down­turn or to hope­ful­ly cap­i­tal­ize on ris­ing prices at some junc­ture, assum­ing they go above the cur­rent spot rate.  I also have to pref­ace this arti­cle, with that I know very lit­tle about the pre­cious met­als mar­ket, and I prob­a­bly should be defer­ring to some­one with more knowl­edge, how­ev­er, I don’t think I will need to get that tech­ni­cal.  My expe­ri­ence is based on speak­ing with oth­er like mind­ed indi­vid­u­als who have sim­i­lar mind­sets about the econ­o­my.

That said, while the amount will remain undis­closed, I con­tin­ue to buy, and here is why…

Why I buy Silver Rounds

I hon­est­ly start­ed buy­ing sil­ver rounds because I could not afford gold.  I did­n’t even know why I was buy­ing sil­ver, except for the idea the econ­o­my was on a down­ward slide.  Then I start­ed pok­ing my nose around at small­er invest­ments I could make that might yield me some sort of guar­an­teed return.  I real­ly could­n’t find any.  Noth­ing sol­id, noth­ing that appealed to me.   Sav­ings accounts are yield­ing 1/2 of 1% if you are lucky at best.  And I want­ed to make incre­men­tal invest­ments as I could afford it.  Enter, sil­ver.  I could buy it online, I could buy it in pawn shops, I could buy it in coin shops, I could buy it from friends, etc.  I thought it could or would be a good way to pre­pare myself for the “bad times.”  As my prep­ping evolved, I first believed sil­ver would be good for barter, for pur­chas­ing goods and ser­vices, for sell­ing as an invest­ment, etc.  I also recent­ly learned that if you are going to sell your sil­ver back and make a prof­it, you have to pay cap­i­tal gains tax on it with the excep­tion of sell­ing Sil­ver Eagles or Cana­di­an Maple Leaves.  Unless you sell them pri­vate­ly, of course.  Either way, I am hop­ing they can pro­vide me with a return on my invest­ment that will either feed me, pro­tect me, or pro­vide me with the items I need in a pinch if I need them.  Cur­rent­ly the price of sil­ver per ounce is just over $28.00.  When buy­ing the sil­ver rounds, I think you also have to know  going in that you are going to pay more than spot price.  Usu­al­ly 10% — 20%.  And, that if you sell them lat­er to a coin deal­er, pawn shop, etc, you will take a small hit of 5% — 20% off spot, so you will be tak­ing a larg­er hit, unless, of course spot price goes up to a lev­el where­by you are mak­ing a prof­it.  It has been hov­er­ing around the 28 — 33 dol­lar mark for some­time though.  Rumor has it, that it also is arti­fi­cial­ly being kept low, and should be about 50 dol­lars an ounce.  If that is the case, then I want to keep buy­ing until the mar­ket is not going to be held down any longer…

Why I am  starting to buy Junk Silver

The flip side of sil­ver rounds, there is Junk Sil­ver…  Most pre­pared­ness mind­ed peo­ple have heard of junk sil­ver, and have con­tem­plat­ed buy­ing it for var­i­ous rea­sons as well.  I would assume, some of the rea­sons men­tioned above seem to be sim­i­lar.  How­ev­er, the phi­los­o­phy with junk sil­ver is slight­ly askew for me from the above descrip­tion.  See, junk sil­ver is pre 1965 coinage (Quar­ters, dimes, and nick­els) that are 90% sil­ver, yet still the famil­iar mon­e­tary for­mat every­one is used to trad­ing for goods and ser­vices.  Why is this impor­tant.  Well, by today’s stan­dard, those 90% junk sil­ver coins are rough­ly worth the fol­low­ing:

  • Quar­ter — Rough­ly $5.00 
  • Dime = Rough­ly $2.00
  • Nick­el = Rough­ly $1.60

Now, why is this impor­tant?  Well, as stat­ed, they are famil­iar denom­i­na­tions and types.  Sec­ond, if the price of sil­ver goes up, so does the val­ue of the quar­ter, dime, or nick­el. Again, why is this impor­tant.  Well, in the event the econ­o­my takes a slide, and the price of sil­ver, lets say, goes up five times it’s val­ue, I can use a nick­el will be worth the equiv­a­lent of eight dol­lars, and I can use that to pur­chase food, with­out hav­ing to wor­ry about using a sil­ver round and hav­ing the farmer or mer­chant ‘make change.’  It will also allow for many oth­er barter oppor­tu­ni­ties with small­er denom­i­na­tions as well.  The secu­ri­ty fac­tor in here, as well, is that a would be intrud­er or thief might just mis­take it for a “jar of change” and let it go because it is too heavy to car­ry.  Just think­ing out loud with that one.  Anoth­er advan­tage is that with Junk sil­ver you would not have to car­ry much of it, and it is easy to hide on your per­son.

Either way, as infla­tion con­tin­ues to rise, unem­ploy­ment stays high, it seems assumed that pre­cious met­als are going to remain at a high­er rate than they were just a few years ago.

How much junk sil­ver and sil­ver rounds should I buy?  Or you for that mat­ter?  It is sug­ges­tive, depends on what you are com­fort­able with, how much research you do, etc.  Some coins are worth more than oth­ers, based on rar­i­ty, year, etc.  I per­son­al­ly sug­gest stay­ing with he most com­mon as the denom­i­na­tion and actu­al sil­ver spot price will be what is most wide­ly rec­og­nized in my hum­ble opin­ion.

Addi­tion­al­ly, my research has shown, and please keep in mind it is lim­it­ed, that sil­ver will con­tin­ue to out­pace infla­tion in the long term.  Again, I reit­er­ate that I am no expert, but it sort of makes sense to me.  Oth­er areas that might push up the cost of sil­ver based on my read­ing are it’s use to puri­fy air, water, in elec­tron­ics such as com­put­ers and mobile phones, and it’s antibac­te­r­i­al prop­er­ties.  Indus­tri­al­iza­tion of emerg­ing coun­tries also is a fac­tor in the price ris­ing.  Coun­tries such as Chi­na and oth­er nations are also con­sum­ing more pre­cious met­als for their elec­tron­ics, own­er­ship of bul­lion, etc.

In con­clu­sion, I think the cost of Sil­ver and oth­er pre­cious met­als are going o go up and I am going to con­tin­ue con­sum­ing it to try and hedge my bet(s) a bit… How about you?  What are your thoughts on sil­ver?






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