If you are new to reading the article-blogs that I write for ITM Trading, then I should take a moment to tell you a little about myself. I began working with ITM Trading as a Senior Analyst on their trading floor back in 2008. My career in banking began in 1990, and in between the two jobs I held several positions for major companies such as Sheraton and OSI (Outback Steakhouse Inc.) and Honda of North America that demanded a strong understanding of financials and generating profit. During my time on the trading floor at ITM, I watched Lehman Brothers go broke, AIG and GM get bailed out, and the Dow crash by over 50%. I also watched silver prices range from $8 per ounce to $50 per ounce. If you are looking for the best silver investment, please keep reading.
How Do I Begin To Buy Silver? There are many types of silver that are available for purchase. Some have very low premiums, and some have rather high premiums. I always suggest first that anyone new to the precious metals market spend at least several hours doing their due diligence into what type or types of purchases best suit there needs. This of course comes only after spending a fair amount of time determining what your financial needs and objectives really are. Once you have a grasp of these concepts, then and only then should you begin calling precious metals firms and speaking with their representatives. Just like any other market, there are scrupulous and unscrupulous companies participating for your dollar. ITM Trading is a family run and own business that has been helping Americans procure gold and silver bars and coins for over 18 years, and we have earned an A+ rating with the Better Business Bureau. To view ITM Tradings BBB record, please follow this link.
What Type Of Silver Should I Buy? Unless you have a very substantial amount of funds to begin to diversify into silver, buying junk silver is a good place to start. Unlike the name would suggest, junk silver is really anything but junk. We are not talking old tarnished silver spoons and forks with bent tines, but instead silver dimes and silver quarters, and in other cases silver half dollars and silver dollars that were minted in 1964 and earlier by United States Mints. These coins have a very low premium (mark-up) over their silver content. The silver content of the dimes and quarters is always 90%. Silver half dollars were also produced with a 40% silver content, and because this can sometimes be confusing to the buyer or potential buyer, I tend not to recommend buying the half dollar denomination. These old silver dimes and silver quarters are not particularly rare or sought after, and really have no collector value. This is just one of many reasons I suggest you buy junk silver as part of your precious metals portfolio. Assorted U.S.Coinage
We will continue our discussion on the benefits of junk silver. The following parts of this series of article-blogs will go further into the subject of just what a junk bag of silver is, and how it came to be in the United States that we even have such a thing. I should also take this opportunity to point out that not everyone’s financial needs and goals are the same, and therefore no single piece of advice about the best silver investment fits everybody. But, if you are new to the precious metals market, and you want to begin to buy silver, or if you want to buy junk silver in particular, then keep reading, there is a lot to learn!
One Reason To Buy Junk Silver As I mentioned, the premium for a bag of junk silver is relatively low. Mark-up is also another word that you may substitute for the word premium, but you should realize that every precious metals dealer out there has to generate some type of profit, and the profit margins that accompany a junk bag of silver are usually low, say in the 3% to 5% range. When you are looking for the best silver investment, at least initially keeping your premiums paid low is a good strategy to begin with. A junk bag of silver’s value will very closely mirror the spot price of silver which you can always find reported at ITM Trading.com on the right hand side of the web page. It is helpful to remember that a silver dime is about 1/10th of an ounce of silver, and that a silver quarter is about 1/4 of an ounce of silver. That being said, with silver currently trending at about $20 an ounce, a silver dime is worth about $2.00, and a silver quarter is worth about $5.00. If you are truly on a limited budget, you may be able to find a coin dealer nearby who will sell single silver dimes and/or silver quarters.
What Is A Bag Of Junk Silver? ITM Trading sells full bags of junk silver, half bags of junk silver, and quarter bags of junk silver. A full bag of junk silver consists of $1000 of silver dimes or silver quarters by face value. This means that with respect to Silver Quarters, you would find 4000 silver quarters in a full bag of junk silver. Likewise you would find 10,000 silver dimes in a full bag of junk silver. If you were to order a full bag of junk silver and requested silver dollars, then there would of course be 1000 of them in a full bag. If you are considering a half a bag of junk silver, or a quarter bag of junk silver, then of course these bags would contain $500 face value of silver coins and $250 face value of silver coins respectively. There is one somewhat common exception to this rule of how many coins are in a bag of junk silver. This Is Not Junk Silver.
A Junk Bag Of Silver Contains Circulated Silver Dimes And Silver Quarters When I say circulated, I mean these coins were used as currency and given as change in everyday cash transactions. Some of these coins saw very heavy use, and their wear and tear is quite visible. On the other hand, the last time I bought a junk bag of silver dimes, there were several old Mercury dimes (an old design featuring the Roman messenger Mercury) as well as some proof and cameo proof silver dimes in very good condition. This being said, what a silver dime or silver quarter weighed when it left the U.S Mint and what it weighs after fifty years or more of use can vary by a significant margin, and since you are truly concerned about the net weight of the silver you are purchasing, and not necessarily the face value, quite often the wholesaler of a junk bag of silver will weigh out a bag of junk silver rather than count out 10,000 silver dimes or 4,000 silver quarters. Therefore it is quite common to find more than $1000 face value of silver coins in a full junk bag of silver.
What Does A Bag Of Junk Silver Cost? Currently, with silver trending around $20 an ounce, a 1000 ounce junk bag of silver would cost around $20,000, a half junk bag of silver around $10,000, and a quarter bag of junk silver around $5000. I should note that silver prices can change somewhat quickly, so being able to purchase a full junk bag of silver when silver prices drop just $0.20 an ounce will result in a $200 savings. Also, if you are in the market for a smaller amount of junk silver, call us at 1.888.OWN.GOLD. Depending on market availability, we can sometimes procure smaller junk bags of silver without a substantial increase in premiums. At this point I should also point out that there can be premium differences between a junk bag of silver dimes and a junk bag of silver quarters or silver dollars. Remember, they have not made any of these coins since 1964, so this is truly a supply and demand market!
Junk Bags Of Silver Are Great Opportunity When you think about it, $1000 worth of old silver dimes or silver quarters now costs about $20,000! That is truly some growth with much more upside potential! In part four of “What Is The Best Silver Investment?” I’ll show you just how wrong President Lyndon Johnson was, I’ll bet that he wishes he had a few bags of junk silver… President Johnson’s Coinage Act of 1965 Former President of the United States Lyndon B. Johnson is the reason you can buy junk silver today. If you begin to buy silver, and you decide to buy junk silver, Lyndon Johnson stands to potentially make you a tidy sum in profits. He may not have meant to, however, judging from a speech he gave on July 23rd, 1965 as he was about to sign the Coinage Act of 1965. This act was essentially the death of the silver dimes and the silver quarters, along with the empirical near gutting of the silver half dollar.
Here is an Excerpt from President Lyndon Johnson’s speech: “Distinguished Members of Congress, ladies and gentlemen: We are gathered here today for a very rare and historic occasion in our Nation’s history. Before I make some observations that I have made note of here, I want to say to the Congress again, as I do almost daily these days, in the words of the Navy–“Well done.” When I have signed this bill before me, we will have made the first fundamental change in our coinage in 173 years. The Coinage Act of 1965 supersedes the act of 1792. And that act had the title: An Act Establishing a Mint and Regulating the Coinage of the United States. Since that time our coinage of dimes, and quarters, and half dollars, and dollars have contained 90 percent silver. Today, except for the silver dollar, we are establishing a new coinage to take its place beside the old. My Secretary of the Treasury, Joe Fowler, is a little stingy about making samples, but I have some here. Joe made sure that I wouldn’t put them in my pocket by sending them over here in plastic. Actually, no new coins can be minted until this bill is signed. So these strikes, as they are called, are coins that we will never use. On one side is our first First Lady, Martha Washington. On the other, a replica of Mount Vernon.
” What Ever Happened To The Martha Washington / Mount Vernon Coins? I wish I knew. From my understanding these coins should have been destroyed. I have to wonder however, what these coins would be worth today. If you ponder these coins for a moment, you will realize that there is no American coin minted for mass circulation with Martha Washington on one side and Mount Vernon on the other! These coins, should they have somehow survived, would be quite valuable today, even though they contained no silver! They would be termed “Numismatics” and collectors would pay top dollar for them. When you begin to buy silver, or gold for that matter, you should understand thoroughly the market you are entering. There are profits to be made in numismatics, and there are certainly profits to be made if you buy junk silver and hold onto it long enough. Lets began to look at the words that President Lyndon B. Johnson spoke just before he signed the Coinage Act of 1965. This act in essence removed the silver content from Americas silver dimes and silver quarters, and thus created the junk bag of silver. If you buy junk silver, think just how wrong Lyndon Johnson was when he spoke these words: A U.S. Mint Proof Set
“The new dimes and the new quarters will contain no silver. They will be composites, with faces of the same alloy used in our 5-cent piece that is bonded to a core of pure copper. They will show a copper edge. Our new half dollar will continue our silver tradition. Eighty percent silver on the outside and 19 percent silver inside. It will be nearly indistinguishable in appearance from our present half dollar. All these new coins will be the same size and will bear the same designs as do their present counterparts. And they will fit all the parking meters and all the coin machines and will have the same monetary value as the present ones. Now, all of you know these changes are necessary for a very simple reason–silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins. If we had not done so, we would have risked chronic coin shortages in the very near future. There is no change in the penny and the nickel. There is no change in the silver dollar, although we have no present plans for silver dollar production. Some have asked whether our silver coins will disappear. The answer is very definitely-no. Our present silver coins won’t disappear and they won’t even become rarities . We estimate that there are now 12 billion–I repeat, more than 12 billion silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins. Since the life of a silver coin is about 25 years, we expect our traditional silver coins to be with us in large numbers for a long, long time.” When was The Last Time A Cashier Gave You A Silver Dime Or A Silver Quarter?
I don’t think I have ever come across a silver dime or a silver quarter in circulation, and remember, I used to work in a bank! I’m not sure if President Johnson believed the words he was speaking when he said that the silver coins would be used “side-by-side” with the new coins, or if he really thought that silver coins wouldn’t “disappear” from circulation, but he was wrong on both accounts!
A Pile Of Junk Silver When we take a further look into the speech that President Lyndon B. Johnson gave as he signed the Coinage Act of 1965. This Congressional Act essentially ended the silver standard that kept the coinage of the United States strong. If we still used silver dimes today, a candy bar would still be two for a silver dime and three silver quarters would put 3 gallons of gasoline in your tank, but I digress. Again, if you buy junk silver, think about these words as you write the check to pay for your junk bag of silver: “If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content. The new coins are not going to have a scarcity value either. The mint is geared to get into production quickly and to do it on a massive scale. We expect to produce not less than 3 1/2 billions of the new coins in the next year, and, if necessary, twice that amount in the following 12 months. So, we have come here this morning to this, the first house of the land and this beautiful Rose Garden, to congratulate all of those men and women that make up our fine Congress, who made this legislation possible–the committees of both Houses, the leadership in both Houses, both parties, and Secretary Fowler and all of his associates in the Treasury. I commend the new coinage to the Nation’s banks and businesses and to the public. I think it will serve us well. Now, I will sign this bill to make the first change in our coinage system since the 18th century. And to those Members of Congress, who are here on this very historic occasion, I want to assure you that in making this change from the 18th century we have no idea of returning to it. We are going to keep our eyes on the stars and our feet on the ground.” Oh, How Wrong He Was… President Johnson gave this speech on July 23rd, 1965. An astute American could have walked into any bank on July 24th, 1965 and purchased $1000 worth of silver dimes or silver quarters, in essence about 56 pounds of silver, for fifty $20 bills. Silver has been over $50 an ounce a couple of times since President Johnson gave his speech. That Astute American could have turned $1000 into $50,000 simply by setting a few of boxes of silver next to his galoshes in the hallway closet and forgetting about them for a few decades, and worse case, his $1000 would always still be $1000 in American coinage! If you would like to speak to an ITM Trading Precious Metals Consultant about buying a junk bag of silver, or other silver or gold coins, please call us at 1.888.OWN.GOLD, we are here to be of service.