The BLOCKHOUSE #9: Coins & Precious Metals During Trying Times
By Mike Patterson
Ed note: This is Part II of our look at monetary silver. Part I looked at the overall silver market with an emphasis on silver coinage. Mike Patterson describes issues related to collecting and using Junk Silver (also known as Sterling and Coin Silver). This Junk Silver guide was originally a “Skills to the Hills” presentation by Mike in November, 2021.
During bad times or at the very least, trying times as we are experiencing now in the United States, one might ask themselves; “What happens if the dollar loses its value?”
In all honesty, it has already begun. As a matter of fact it has been losing its value for at least the last fifty years. Mostly from the manipulation by International banks , the Fed and other players in the monetary world. However at this moment in time the worst attack on our money is inflation.
I won’t go into all the details here about inflation and Big Banks because unless you are living under a rock, you know it is happening right under our collective noses. All the proof you need is to go grocery shopping. Beef prices from $4 per pound upwards to $8 per pound. And there are many other examples to prove this fact.
So, unless your head is in the sand, you need to take this little article to heart and move on the information before it’s too late. Let me get right to the point …
When I was a young boy, circa 1958, my Mom got me interested in searching out and collecting coins. At that time there were no mixed metal coinage, it was all 90% silver with 10% copper to help stabilize the coin. OK, technically they had a secondary metal, however today’s coinage is a mixture of nickle, copper, tin and less than 5% silver.
Being only seven years old it took her quite a while to make it interesting for me to continue this new hobby. The introduction of foreign coins into the mix really hooked me, mainly because of the designs. But it wasn’t until the Jimmy Carter Presidency, when inflation and run away gas prices coupled with 18+% mortgage rates did I realize how valuable my collection had become.
Silver prices were artificially inflated in excess of $300 per ounce. I grabbed nearly all of my junk silver and sold it making several thousand dollars profit over face value. After Reagan took office the prices of silver came back down to nearly the same level before Carter.
I was able to replace the junk silver and also triple my investment in other silver collectibles. By the way, the term “junk silver” simply means it has no collector value. Coin collectors can be a persnickety bunch. Bottom line, I was extremely lucky and in the right place at the right time.
Now let’s look at why I think you should buy silver and gold and other precious metals. The primary reason is because from ancient history to this day, no matter how bad things got, silver and gold have always held value. As of this writing spot price of silver is $24.77 per ounce, gold is $1,865.50 per ounce. You might ask why should I buy silver or gold, I need to be buying food and clothing.
We should all be buying emergency food, but for a moment think back at what happened in Germany during WWII. You had to literally take a wheelbarrow full of cash to the store in order to buy a loaf of bread. I can hear you now, that can’t happen here, or other misinformed statements. But guess what? It absolutely can. Do I think you need to go out and invest thousands of dollars into a coin collection or start buying spot gold and silver … no, but I do think you need a safety net. Find a reliable and trustworthy coin dealer in your area. Then do your due diligence and start buying what you can afford. Even start with silver if you can’t afford gold, and buy some every paycheck.
Buy dimes and quarters, stay away from half dollars and dollars. The reason being, if we get hit hard and you need to buy food for your family it will be much easier to trade the smaller values.
Remember, you are buying into a hedge on inflation not as a coin collector. It takes many years to become proficient in coin collecting. Not that you can’t learn or study to be reasonably good at it. My point is that even seasoned collectors can be fooled occasionally. Which leads me to my best precautionary tool, always carry a small magnet with you when shopping for silver coins. If the magnet sticks … it ain’t silver. This is especially true with foreign coins, they can look beautiful and feel like they are the right weight but have a high steel content.
There are even coins made of copper and aluminum. They won’t stick to a magnet, and they are much lighter so you should be able to tell immediately. The copper coins will be obvious because of their color. However, some of the foreign coins can be plated with tin or silver so you must be careful. When in doubt, walk away.
There are other good sources for silver and just as valuable. That old silverware set your grandmother gave you, usually marked “sterling silver”. If it reads silver plate, there is not much silver there, however if its very heavy such as a serving platter, it might be a copper core that’s plated and copper is valuable also.
I will continue this column if there is interest, please let me know if you want to know more. A final reminder, in your search for this precious metal we call silver. Unless the price for the “silver item” is ridiculously high, don’t quibble too much as you may miss out on a good opportunity. Take into account the spot price for the price of silver, which you can find on the internet, try (monex.com) calculate the weight if it is not a coin, check it with your magnet, then make a deal.
Written for the local chapter of PeoplesRights.org
by Mike Patterson, November 2021
