• seperator

Still hooked after all these years

Silver passed $15 a troy ounce yesterday. As someone who has watched daily fluctuations and been fascinated by them since 1968 when $2 seemed like a high price, this milestone seems significant.

Sure, the price has been higher before, but it rarely has stayed there. Each time silver pokes its head above $15, it gets my redoubled attention.

This morning as I write this, I was thinking in old-fashioned terms born when we didn’t have nice and handy one-ounce bullion coins.

I often still think in terms of $1,000 face value bags of U.S. dimes, quarters or half dollars struck 1964 and before.

It is in these terms that I measure everything.

The old rule of thumb for these bags is there are 715 troy ounces of silver per bag. Anyone looking up the weight of coins might pipe up that the books say that the coins add up to over 723 ounces, what gives?

The difference is a factor for wear. Indeed if all the coins were uncirculated, there would indeed be 723 ounces of silver in the bag, but since uncirculated coins would more likely trade for a numismatic premium, average wear was taken into account in the development by coin dealers of this handy rule of thumb.

This means a bag currently has a bullion value of $11,046.75, or roughly 11 times face value at the current $15.45 silver price.

So, $1 in standard .900 fine U.S. silver coin is now worth a minimum of $11.

You might wonder why my starting point was 1968. Well, until 1967 the U.S. Treasury controlled the price of silver just as it did the price of gold. It was in that year that the price was freed up and market forces began taking the value beyond the $1.2929 official ounce price. I was aware of silver’s price before 1968, but it was in that year that I developed the habit of looking up the price every day in the morning newspaper that I delivered.

In that year, it had gotten really interesting and a record of $2.56 was achieved. That seemed amazing to me and I was hooked.

I still am after all these years.

This entry was posted in Buzz. Bookmark the permalink.

2 Responses to Still hooked after all these years

  1. Brad says:

    I love picturing the paper boy looking up the price of silver in his morning paper before delivering them. That probably doesn’t happen often.

    Just think, someone might have a paper boy right now who will someday be the editor of "Numismatic News"! I wonder if anyone in 1968 thought that would happen to their paper boy?

    You know, I wonder how many people actually even HAVE a paper BOY anymore? With the economy so bad, most papers around here are being delivered by unemployed paper MEN, desperate to make a buck any way they can! Our paper MAN seems to find the ditch, driveway and hydrangea bushes more often than our steps or porch when lobbing the paper from his still moving car! 🙂

    I love your blog, Dave. I read it first thing every morning when I get to work. When it’s delayed for some reason, it’s almost like the morning paper MAN forgot to come!

  2. Mr. Chuck Schroeder says:

    I think I am more of a expert then you’ll ever be Dave. Don’t cha know. all copper, gold and silver coin’s should be melted?. No matter who makes them. It’s time I added my 2 cents worth. I have been reading Numismatic News for years. Now, it’s my turn. The negativism of non licensed coin dealers, and real coin dealers. Do you think cherrypicking is pretty much the same as stealing?. Or should people be allowed to benefit from their superior knowledge, as long as they pay the dealer the price he wants for the coin, or wishes to give to you for spot price to melt down when selling it to them?. As most people are aware, the price of gold has reached record levels (from fear of loss and hype), and is currently flirting with $1,000 an ounce. Silver has more than tripled in just over 3 years, rising from $6.40 in Jan. 2005 to about $20 an ounce today. Pawn shops, jewelry stores, and so called coin dealers are all doing a very brisk business in buying gold and silver coin items from customers who want to cash in. Most of this gets melted down and/or resold fairly quickly at a real high price over gray sheet in a market like this. But should coin dealers be melting down the very treasures they are charged to protect and conserve for future generations of collectors?. Are some coins okay to melt but not others?. Personally, I am appalled at this mass melting of U.S. coinage. Perhaps this is an attitude found more commonly among the collectors of ancient coins than the modern coin collectors, but I see coin collectors and dealers as stewards of our national heritage. Not phony con-artist’s. These coins can never be replaced, and coin collectors have a duty to conserve and protect this heritage to pass down to future generations. After all, we can’t take them with us when we die, so melting them for bullion is just selfish and antisocial. On the other side of the coin, however, are the folks who believe that if you pay for the coin, you own it. It’s yours to do whatever you want with it, even destroy it by tossing it into the melting pot. It’s bad enough Coin Club’s are disappearing at an alarming rate, like the drive in movie places, use to be years ago, how is our children of today, going to find that coin, to put in a empty hole in a book, when the silver coins are all melted down for 10 times face, that gave some coin dealer 77 ounces of silver for $100 face value of silver coins and, kills the knowledge of what coin collecting is all about, "Children", and our hobby, and The Family.

Leave a Reply