Foreign silver

[RI AL]

Still cleaning out years of accumulation of coins and found a box filled with minor world silver coins. While I tend to hold on to silver I guess, I don't remember where all this stuff came from.

 

At the meeting with our financial planner last week, one of his suggestions was to increase my holdings in precious metals (we went in gold from 4% to 7% of our portfolio though he felt that even 10% would be appropriate at this point)...we both feel that Israel is eventually going to attack the nuke plants in Iran resulting is another "world crisis". A bit of an increase in gold holdings might be a good hedge against tough times as well as the inflation that he anticipates will happenn with all the printing of dollars of late. He also said the some silver would be a bad idea.

 

Well, silver I have, from pocket change in the 50's and 60's, silver "art bars" bought at about $2, 3 an ounce and this box of foreign silver. It amounts to quite bit of silver.

 

In the event of a world calamity (thouh I'm not THAT pessimestic about a long term crisis arising), how are values of foreign silver, mainy minor, determined? Of course weight and finesess are factors, but are foreign silver coins from foreign countries considered a hedge against possibly temporary times? Does anyone forsee a market for foreign silver?

 

Thanks, RI AL cleaning out years of stuff.

[World Colonial]

This is at least partly an assumption, but the primary reservation I have with holding metals in the forms you are describing is the reduced liquidity and larger price spreads. Its better than not owning the metals at all but I would expect that unless the coins carry a numismatic premium, that they would sell at a DISCOUNT to melt value.

 

I also do not care for bars from an issuer that is not well known. I am only interested in owning Johnson Matthey, Englehard or a similar name.

 

Now partly, it also depends upon what type of crsis you are trying to hedge. If it is simply a financial crisis (though I believe the current one will be bigger or much bigger than it is now before it is over), then owning a larger range of options I would consider feasible though far from optimal.

 

If you are talking about actually having to use it in a barter exchange, that is another issue entirely. I think the holder of silver (or gold) in a form which is not widely recognized could have a hard time using to it to buy anything.

 

If you do not own those coins and bars as a collectible and do not care if you keep them, then I would recommend trying to convert them into a more recognizable form if you can do so without too much of a discount.

 

I'm not exactly sure how you would do that other than by selling them on eBay or through a trade or what terms you will get. In my case, I would not want them but I cannot speak for others.

[DaveG]

Personally, I would think that circulated US silver coins would be more readily marketable than foreign silver (especially in unsettled times).

 

I know some coin dealers who buy foreign circulated silver coins, but their buy price is lower than for US coins, because they have to look at each coin and put it into the right pile - 90%, 80%, etc. (depending on what you have) and their main customer is either other dealers or the smelter.

[WoodenJefferson]

Hard not to get political with this topic, but Iran is testing SAM's (Surface to air missiles) to defend against air attacks. I would assume Israel Air Force would be the prime target since they already knocked out the nuclear sites once before, but these kooks will fire at anybody.

 

I would not think unrest in this region of the world would have much influence on the price precious metals world wide, countries holding the vast majority of gold and silver in this region are friendly to the powers that be. Besides, those friendly nations have half the worlds supply of crude oil, that is going to be the leverage, not precious metals.

[RI AL]

Interesting replies. Yes, I agree that Iran's nukes are soon to be toast. Interesting times ahead, hopefully not TOO interesting, but if I was in Israel, I wouldn't feel any too comfy with that insufficiently_thoughtful_person next door running the country...since he seems to have stolen the election...possibly.

 

Sounds like the answer for my silver stuff is just hang tight. I am trying to lighten the load here but seem to be having trouble unloading anything. Either no one wants it or I can't part with it. Dilemmas, dilemmas. Silver...when the time comes...to the smelter it goes, except of course for the better pieces.

 

Tried to sell a 3 coin gorgeous BU set of Greek coins on E-Bay, catalog value $30 in UNC, (no mention of BU in the catalog), for $7. 2 lookers...no takers. Oh well, guess they will go in the box with the "better foreign". Why...I'm not sure...being "better" doesn't seem to mean a whole lot these days.

 

But then, I put in an offer for $60 for a $67 dollar coin on E-Bay and got rejected. Go figure. Not even a rare coin. Things are goofy.

 

RI AL

[Houston Investor]

Foreign silver coins are very marketable, especially nice BU pieces. At the very least they are worth BV but many carry premiums well above BV. I have bought numerous deals off the Bay where people unfortunately were giving them away. Either the other bidders were asleep, broke, or too ignorant to know what they were passing on. World coins are a super deal vs US. If bidding on these at coin club meetings, focus on the ones near the end of the auction - by that time a lot of the other bidders have run out of money . I really like gem foreign silver material and at times have paid really strong prices to acquire it.

 

I use Krause CV for pricing foreign silver for the most part which goes in my Collector Browse Boxes at shows (nicer, slabbed coins go in my cases instead) but one needs to adjust the price for BV changes (take a look what the BV basis was for the CV). In most instances, Krause only represents average unc (MS 60-62) so higher grade coins, especially TPG graded pieces are worth a premium. A good rule of thumb for accurate retail pricing is approximately a 25% tack on (to CV) for each change in grade above MS 62; however this can vary. I recently sold a 1913 NGC MS 63 Mexico Cabalito Peso for $325 as this piece is very scarce this nice. I have always wanted to complete a set in this series but can't hold any of these long enough to do this. I only had it in inventory a couple of months before it sold. I recently acquired a PCGS MS 65 Mexican 1950 Railroad Commem, a very scarce coin in investment grade:

[World Colonial]

As an exclusive collector of world coins, I agree with you that at least some issues especially in high grade are marketable.

 

But I doubt that either Rial or the typical individual has many high grade world coins and most collectors have either few or none. They will almost exclusively have a stash of low grade common issues, possibly mostly from obscure countries. I doubt very much that these are very marketable at all and to the extent that this does not apply, many or most will be far more marketable for a dealer such as yourself than the typical collector or retail buyer. I would expect that the typical collector of these issues would only be able to sell them at a substantial discount to either the catalog price or retail, mostly somewhere around bullion value or even less.

[cladking]

In the event of a crisis you don't want silver you want gold.

 

Gold is no longer absolute protection against instability or even inflation but it's a far better bet than silver.

 

Silver is one of the best bets for dramatic price increases but it might not do very well in a crisis. Silver is a bet on the future that might protect against some crises. Gold is one of the best forms of monetary insurance. Oil is better in small crises.

[Houston Investor]

The biggest market I have found for the lower priced / grade foreign silver under say $50 retail is from my junk box at shows. Its like they are digging for buried treasure.

 

Good JB sales can pay my expenses of doing a show. Years ago I would advertise in NN I was a buyer of this stuff at 55% CV. Many responded including one guy (about 15yr ago) who sold me a large quantity of junk foreign but the best one was a very nice 1906 Great Britain Unc Florin. It made MS 64 at PCGS - it did take a few years to move it at my price of around 150% KRS CV. It took selling in on the Bay as many at shows had passed on it (I guess they thought I would just give it to them for nothing). It was a very scarce coin. Haven't seen one since.

 

The other stuff it probably took 5-10 years to retail it (around CV) in JB sales at shows, so while GM may appear high the time value of money would dictate otherwise. I love this stuff (and have a lot) but now only try to buy it at around 50% CV as I may not be able to sell all of what I have in my lifetime.

 

With all of this world silver I have, including rolls and rolls of US, a move by silver to $50 / oz would certainly make my day!

 

 

[World Colonial]

What you have described is exactly why a collector should NOT buy this material in quantity. Its a great way to LOSE money.

[jackson64]

I have done very well with foreign silver....generally I like to snipe coins at well under melt on ebay (usually the seller doesn't realize that they are silver...or a large foreign coin has 1.3 oz of silver in it..or mixed lots have silver which I pick out )..

 

then I'll relist it at melt with the foreign silver and a mix of a few low-grade American silver coins in a "lot"...place the listing in the bullion section of ebay with the start bid just under melt value..( I always add up the total silver ASW configuring purity and %)..

 

they eat it up !!..I make about $5,000 a year on this little "rainy day" project..

 

PS: my listings usually say something like "Clearance Sale !! Silver starting under Melt and no Spot Charge !!

 

PPS: this only works buying larger amounts or finding free shipping...but selling your silver in the Bullion section on the Bay instead of World Coins makes the difference..

[jtryka]

There was a dealer that dealt mostly in foreign coins that always came to the local show where I used to live. He always had a silver junk box and I loved it! I mainly went for the larger silver coins, and he just calculated the silver content and multiplied by the spot price. When silver eagles were $5-7 over spot, it was a great way to buy. My favorites were always the Panama Balboas or the Cuban pesos, they had the exact same silver content as a US silver dollar but would always be $2-3 less than a junk Morgan or Peace dollar. Depending on the quantity you have, that may be a way to go, certainly it might work on eBay given Jackson's experience.