Buying Junk Silver

Junk Silver is the term most often used for certain coins that were minted in the United States before 1965. At that time, all coins (except the penny and nickel) had a weight based value of silver. Ever wonder why the dime is small and the quarter was big? So that 10 dimes, 4 quarters or 2 half dollars all should weigh the same. Since they all have 90% silver composition,  if you had 5 dimes from 1964, they should weigh the same as 2 quarters or one half dollar. And, they should all be worth the same amount.  These older coins often were referred to as junk silver because they had no real collection value since they were worn, scratched, and generally beaten up. In the past few decades, many people have begun to realize they have some serious value as a result of the amount of silver in them.

A normal dollar face value of pre-1965 silver coins should have about 71% of a troy ounce of pure refined silver. It isn't always right on because as the coins wear out they actually lose some of their metal. These pre-1965 silver coins are collected and often purchased in bags of $1000.00 or more. If you have a bag with a face value of $1000.00 (meaning you add up the face value of all the coins in it) it should have roughly 715 troy ounces of silver in it.

Many investors buy junk silver coins as bullion investments.  Just recently, many people have begun to purchase junk silver coins as a "survival" investment.  What is a survival investment?  These buyers think that if the dollar collapses, then the US silver coins (pre-1965) can then be used as they were originally intended--AS MONEY! 

I recently read an interesting book called, The Modern Survival Manual: Surviving the Economic Collapse, by Fernando Aguirre.  This is a great book that describes one man's experience during the collapse of the Argentine economy in 2001.  Many of the contributing factors that lead to the collapse seem to exist in the United States today. In fact, Mr. Aguirre suggests that one of the few things he wished he had done before the collapse is buy a large supply of small denomination silver coins for use as barter and trade.  In the chaos that followed the insane inflation that hit Argentina, he said it would have been extremely beneficial to him and his family if he had some silver coins.  The reason he gave was that they kept their value even though the Argentine currency collapsed. 

Another reason to have physical silver is in case the banks are closed for a few days.  During the Great Depression, FDR held a bank holiday where the banks were all closed for 3 days in an effort to stem the tide of withdrawls.  If this were to happen, and you had some silver coins, you would still be able to shop for needed items such as food, water, medicine, etc. 

Either way, it never hurts to have some physical savings.  In the event of a national currency crisis, hyperinflation, or just for your retirement, owning physical silver is a good idea. 

There are many places you can buy Junk Silver. One of the easiest and simplest methods is to shop on EBAY. As long as you identify a reliable seller and make several small transactions, you can stay reasonably safe on EBAY. You can also buy junk silver from several reputable dealers. Some of the best are:

1. Lynn Coins
2. CMI
3. Monex

If you decide to buy silver coins, do a couple of things.  First, choose a reputable dealer.  Whether it is one of the previously listed dealers or not, call them up and make sure you are comfortable with them.  Next, make several small purchases to establish a level of trust with the dealer of your choice.  Finally, find a safe place to store your silver coins.  Put them in a very secure safe--and don't talk about it with your friends.  You may be tempted to discuss it with everyone you meet, but in a true economic meltdown, anonymity is priceless.