Even ten-ounce coins will trade at a steep discount here, as to be useful, someone will have to melt down and recast them. Here, the smaller increment the coin, the greater the relative value. Now take things even further: Imagine the dollar has collapsed or is collapsing, and you want to barter in silver. Only a fraction of the people who can afford to buy one ounce or ten or twenty ounces of silver can afford to buy one hundred ounces at any given time. Imagine you want to sell your one-hundred-ounce medallion-the market for one hundred ounces of silver is much smaller than the market for one ounce of silver. The per-ounce mark-up over spot on these items is low, but your savings come at a price: liquidity. Two-, five-, and ten-ounce coins are produced by a lot of mints, and some even make kilo or one-hundred-ounce “medallions” that are made to look like coins. If you believe, as I do, that silver is set to skyrocket, then the name of the game is getting as much silver in your hands as possible… With one caveat: It has to be liquid. But as an investment strategy, buying numismatics is not wise. In summary: If you want to buy a few numismatic coins because you enjoy them, by all means do so. This could divert demand from numismatics and into coins like Silver Eagles, Silver Maple Leafs, and generic silver rounds that have very low mark-ups over spot. Why? Because in a scenario wherein the demand for silver goes through the roof, people are going to want as much silver content as they can get. There’s another possibility, too-that numismatic values will actually go down as silver goes up. Perhaps the numismatic premium will go up with inflation, but assuming silver beats inflation, numismatic coins are still a bad bet. The collectible coin will go up based on the silver it contains, but there’s no reason to think the numismatic premium will increase too. For example, if silver goes up 177% from $18 to $50, then a one-ounce numismatic collectible coin valued at $100 is likely to go up by only 32% to $132. The problem with these coins as investments is that their numismatic premiums are unlikely to keep up with the rise in the price of silver. They are prized for their rarity more than anything else. Collectible numismatic coins are those that have market values that are wildly out of line with the value of their silver content.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |