Find Your Local Coin Shop
A Brief Guide to Buying Silver:
What kind of silver, and where to get it.
by Jason Hommel, SilverStockReport.com
The silver story is simple: Since the 1870's, the trend has been for national governments and banks to stop using silver as a medium of exchange. This has reduced demand. Then, around 1945, electronics started booming, and since silver is the greatest conductor of electricity, a lot of silver has been used up. Today, the world has nearly run out of silver, just as paper money is beginning to fail around the world as gold begins to explode upwards in price. As investment demand returns to gold and silver for savings (as a store of value), like it will for no other commodities, physical silver prices will explode past them all, because monetary demand (starting as a store of value) will return.
Therefore, I strongly suggest that you try to get the most physical silver for your money, and take posession of it. To do that, you ought to ask the dealer at your local coin shop the prices of the following items. (You can find your local coin dealer at a link below.) Prices sometimes change.
Types and Kinds of Silver Available
A. U.S. minted Silver-Eagle. --This coin is .999 pure silver, and weighs one ounce. It is generally more expensive. The U.S. Mint, like all government operations, is less efficient than private industry, and thus has higher costs. I don't prefer these, but they are popular.
B. One-ounce "rounds". --They are .999 pure silver, and weigh one ounce. These coins are like the Silver-Eagle, but they cost much less. They are minted by private mints.
These are my favorite choice , because you get the most silver, for the least cost. People tend to choose these when given the choice, because it's easy to know how much silver you have, just count the ounces. They are called "rounds" not "coins", because the word "coin" refers to government issued currency.
90% US Silver Coin Bags, $1000 Face --These are half dollars, quarters, or dimes that commonly circulated in the U.S. Called "Junk silver", they generally contain no rare or special coins. Sold by the "bag", each full bag contains $1000 face value of coins, such as 2000 half dollars, 4000 quarters, or 10,000 dimes. A "bag" weighs about 55 pounds. $1 face value contains .72 of an oz. of silver. Or, $1000 face value "bag" contains about 720 ounces. That's the total amount of silver. The purity of the silver is 90% pure, with 10% copper.
D. Commemorative Coins. Often times, the public will buy silver at a rate of 10 times higher than the bullion content if it is made into "Elvis" coins or "Space Shuttle" coins, or "Princess Diana" coins. Often made by the Franklin mint and sold on late night TV, these are generally a rip off. People pay so much, and sell them to the bullion dealers only for the melt value. And you can sometimes buy these kinds of so-called collectables at the coin shops very cheap at just over the spot price, or ten times cheaper than found on TV.
A. 1000 oz. Bars. --These bars weigh about 68 pounds, and vary about 10% as to weight. You may get a 908.8 oz. bar or a 1099.6 oz. bar, and the price is settled on delivery. These are the NYMEX bars. Benefit: Good for NYMEX delivery to the major exchange for delivery into a 5000 oz. futures contract, and thus, the most liquid for large buyers or sellers. Also, it is quicker to physically move them in large quantities, rather than moving hundreds of 100 oz. bars. Drawback: They are not suitable for smaller transactions, but they are always liquid if they are sold to a wise bullion dealer who knows what they are. The other drawback may be shipping, if you are on the west coast, since the exchange is in New York.
B. 100 oz. Bars. --These bars weigh 6.8 pounds, and are among the most popular with retail investors. They stack well, and make it easier to inventory than 1 oz. rounds or silver bags. Popular brands are Englehard and Johnson-Matthey. Those two brands cost a bit more than other brands, usually about 40-50 cents per ounce above the spot price, but that price may vary with market conditions.
C. Odd weight retail bars. --Stamped as 101.46 oz. or 51.23 oz., these bars cost less, and generally have a wider spread, due to the extra work it takes to calculate their value, and extra risk due to the lack of good brand name. To test that they are silver, try a simple ring test. Bang them with a wooden spoon, and if you hear a faint, quick, "riiiinnnngggg", they are silver. Lead filled bars thud or thunk, and do not ring. But you may be able to buy these as spot, and sell them at spot, depending on the dealer. These are true "bullion" bars, and not found in quantity. Also, there is the 1 kilo bar, which is 32.151 ounces.
D. 10 oz. bars are also very popular, often harder to get, with a slightly higher cost, as they seem more "affordable" and are very neat to hold, and can act as "change" between the 100 oz. bars, and 1 oz. rounds.
So, what kind of silver is best? It depends on your situation. I own and like the 100 oz. bars, and the 1000 oz. bars, and the 1 oz. rounds the best. But that's because I have a lot of silver. My friends and family typically like the 100 oz bars, 10 oz. bars, and 1 oz. rounds the best. For storing large amounts, the 1000 oz. bars are most convenient. The 100 oz. bars are troublesome in very large quantities--it takes much more work to move 200 of them than it takes to move 20 big ones. I also like the bags, but they may require counting with a coin counter which I have purchased, which takes more time. My kids like the one-ounce rounds the best. Most people find the 100 oz. bars fascinating to hold in one's hand, and the 1000 oz. bars are typically considered too heavy to lift.
Where to Get It!
Beware! Don't trade in your dollars (which are defaulted promises to pay silver or gold) for more promises of precious metal!
ETF's are NOT silver.
Silver "bullion accounts" are NOT silver.
Silver Certificates are NOT silver.
Silver is a metal, it's heavy, you hold it in your hand, it represents payment in full, not a promise to pay.
If someone owes you silver, or owes you the value of the silver, then you don't have silver, and you won't have the protection of silver.
My MOM's silver
Find your local coin shop. Get your phone book out. Type in "coin shop". Visit them all. Some might be one room offices rarely staffed. Some might have bars and gates on the doors, that might be intimidating, but is actually a good sign.
I DO NOT TRUST THESE GUYS:
http://www.kitco.com --main page
I do NOT recommend the kitco "pool" accounts. Kitco recently had the worst terms of all dealers in 2008. Unknown delivery times for silver, and unknown and backlogged payment if you sold silver to them. Unreal.
Warning: Monex will offer to hold silver for you, or offer you leveraged accounts. I strongly advise against that.
Warning: NorthwestTerritorial Mint has very long delivery times.
Warning: Goldline may want to sell you numismatics on leverage, on borrowed money and hold them for you, and they reportedly have long delivery times.
Warning: Perth Mint has often run out, has long delivery times, up to 6 months, and has extraordinary fees to convert certificates or unallocated silver into real silver. With a reported $1.5 billion in "inventory", to be used for minting purposes, they should have enough to make more than the U.S. Mint annually, over 20 million ounces, but they make less than a million! Something is very wrong at the Perth Mint.
If you absolutely must have someone else hold your silver for you, there are four people I might trust. (And these people are NOT holding silver for me.)
Brink's, which is "only a storage company", not a bank.
http://www.churchtrust.com/, sure enough, these guys went out of business!!!
Remember, the only way to prevent from being defaulted on a delivery default, is to bring your cash, in person, to a dealer and take delivery in person, that same day.
List of refiners
(refiners don't usually sell to the public)
European precious metal dealers:
www.mp-edelmetalle.de in Germany
www.hopea.fi languages Finnish, Swedish, English. serves E.U.
www.thesilvermountain.nl in Netherlands/English OK
Tax is 6-7% for "Legal Tender Silver Coins" such as Eagles, Libertads, Maples, etc.
www.gold4ex.be/servlet/Home in Belgium/Brussels
www.atsbullion.com in UK
www.royalmint.com in UK
www.silverexchange.co.uk in UK
www.24carat.co.uk in UK
www.goldavenue.com in Switzerland
www.monnaiedeparis.fr in France
www.ainsliebullion.com.au/ in Brisbane
www.ausbullion.com.au/ in Sydney
There is also "The Perth Mint". http://www.perthmint.com.au/ I strongly advise against letting them hold your silver for you. I cannot warn about this danger enough. If someone is holding your silver, then you are holding the bag! You don't have silver if someone else has your silver! Instead, you have a promise, essentially, a promise is no better than paper money. Know the difference!
Even they recently ran out of silver in March/April, 2008.
In Bangkok, Thailand:
The Bangkok Assay Office (www.bkkassay.com ..site is currently under construction).
Bangkok Assay Office
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1230-32 New Road
t: 662 727021416
f: 662 7270217
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