Premium never low enough?

I am a fan of the Coinflation.com web page.

I was drawn to it years ago because every day the site calculates the melt value of a wide range of U.S. coinage.

No longer would I have to remember that it takes 154 pre-1983 cents to make a pound of copper and then look up the price of copper in a financial journal.

Coinflation now does it for me as it does for zinc cents or nickels or standard 90 percent U.S. silver coins.

The latest convenience to be added to the page is now at the top.

On a daily basis, the site offers the average premium that must be paid over face value for 90 percent silver U.S. dimes, quarters and half dollars. Melt value has been on the site for years, but if you cannot buy at melt value, you need something more.

Look for the "Physical Silver Premium (Bid/Ask): 12.3% / 14.8%" line at the top right.

On the day I copied this, buyers had to pay melt plus 12-15 percent.

It is important to know this. The whole purpose in buying silver is to maximize the quantity of the metal you get for each dollar spent. If you pay a premium of 13 percent over melt value, it is roughly 13 cents on the dollar that goes into thin air.

You spend a dollar. You get 87 cents in silver.

Of course, the hope is the market premium will stay steady over time and you will get your money back when you sell.

That is the theory. I have seen times when coins sold at discounts to melt value.

So in practice, it is good to know when demand is pushing premiums higher and learning at other times that premiums are shrinking. It is in the latter times that buying should be considered.

So my thanks go to Coinflation for this addition and for being such a handy website generally.

Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."

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