Baby Boomer Pocket Change

Worth The Price Of Silver-Bullion?

I took a friend’s coins to a dealer. He was very informative but I really wasn’t prepared to hear what he had to say.

The silver dollars I presented were he said, “Worth the price of silver…”. He began to explain more about silver prices. He also showed me where the coins she had were not a rare, poor condition, and did not have any errors. Hence, they were worth the price of silver.

Now that is not a bad thing and it is worth following silver prices. But here is more information from Wikepedia on bulion as it relates to coins.

Bullion

A metal is deemed to be precious if it is rare. The discovery of new sources of ore or improvements in mining or refining processes may cause the value of a precious metal to diminish. The status of a “precious” metal can also be determined by high demand or market value. Precious metals in bulk form are known as bullion, and are traded on commodity markets. Bullion metals may be cast into ingots, or minted into coins. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money.

Many nations mint bullion coins, of which the most famous is probably the gold South African Krugerrand. Although nominally issued as legal tender, these coins’ face value as currency is far below that of their value as bullion. For instance, Canada mints a gold bullion coin (the Gold Maple Leaf) at a face value of $50 containing one troy ounce (31.1035 g) of gold — as of September 2007, this coin is worth about $737 as bullion. Bullion coins’ minting by national governments gives them some numismatic value in addition to their bullion value, as well as certifying their purity.

The level of purity varies from issue to issue. 99.9% purity is common. The purest mass-produced bullion coins are in the Canadian Gold Maple Leaf series, which go up to 99.999% purity. Note that a 100% pure bullion is not possible, as absolute purity in extracted and refined metals can only be asymptotically approached. Many bullion coins contain a stated quantity (such as one troy ounce) of the marginally-impure alloy. In contrast, the Krugerrand is one of many historic and modern bullion coins of 22 Kt Crown gold, with a stated content (usually one troy ounce) of “fine gold”, with the other component(s) of the alloy making the coin heavier than one ounce in total. Still more bullion coins (for example: British Sovereign) state neither the purity nor the fine-gold weight on the coin, but are recognized and consistent in their composition, and many historically stated a denomination in currency (example: American Double Eagle).

One of the largest bullion coins in the world is the 10,000 dollar Australian Gold Nugget coin minted in Australia which consists of a full kilogram of 99.9% pure gold. There have been a small number of larger bullion coins, but they are impractical to handle and not produced in mass quantities. China has produced coins in very limited quantities (less than 20 pieces minted) that exceed 260 troy ounces (8 kg) of gold. Austria has minted a coin containing 31 kg of gold (the Vienna Philharmonic Coin minted in 2004 with a face value of 100,000 euro). As a stunt to publicise the 99.999% pure one-ounce Canadian Gold Maple Leaf series, in 2007 the Royal Canadian Mint made a 100 kg 99.999% gold coin, with a face value of $ 1 million, and now manufactures them to order, but at a substantial premium over the market value of the gold.

Gold and silver are often seen as hedges against both inflation and economic downturn. Silver coins have become popular with collectors due to their relative affordability, and unlike most gold and platinum issues which are valued based upon the markets, silver issues are more often valued as collectables, far higher than their actual bullion value

Tags: bullion coins, gold, silver

What is Numismatics?

If you talk coin collecting I am finding that you must know this term called “Numismatics”. Now, I trotted over to Wikepedia and decided to share with you what they said. In the next post I will share some history.

Numismatics (Latin: numisma, nomisma, “coin”; from the Greek: νομίζειν nomízein, “to use according to law”) is the study or collection of currency, including coins, tokens, paper money, and related objects. While numismatists are often characterized as students or collectors of coins, the discipline also includes a much larger study of payment media used to resolve debts and the exchange of goods. Lacking a structured monetary system, people in the past as well as some today lived in a barter society and used locally-found items of inherent or implied value. Early money used by people is referred to as “Odd and Curious”, but the use of other goods in barter exchange is excluded, even where used as a circulating currency (e.g., cigarettes in prison). The Kyrgyz people used horses as the principal currency unit and gave small change in lambskins.^[1] The lambskins may be suitable for numismatic study, but the horse is not. Many objects have been used for centuries, such as conch shells, precious metals and gems.

Today, most transactions take place by a form of payment with either inherent, standardized or credit value. Numismatic value may be used to refer to the value in excess of the monetary value conferred by law. This is also known as the “collector’s value” or “intrinsic value.”

Economic and historical studies of money’s use and development are separate to the numismatists’ study of money’s physical embodiment (although the fields are related; economic theories of money’s origin depend upon numismatics, for example).

Tags: coin collecting