Much Higher Denominations on Bullion Coins?

Should the US Mint (Congress) put much higher denominations on bullion coins, thus softening investor’s/collector’s downside?

 

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This is part of why I find Canadian bullion more attractive. It wouldn't hurt, but I'm not going to hold my breath either. Such a change would be interesting from a numismatic perspective, so I would switch for that, then back to the land of the frosty north.

 

A number of years ago when silver was below $10, I called the bullion desk at ScotiaBank and asked them about the $5 face value on Maple Leafs. They informed me that if the price of silver went below $5, their branches would only redeem the coins for the silver value, not the face value. They said that the face value was only put on the coins to enable them to cross certain international borders without paying certain taxes. It isn't a legal tender value like that on other coins.

 

I wouldn't expect the bullion desk to do any less: pay the least and act like they would be the most charitable of all options. Kinda like paying the IRS with bullion...for face while being taxed on a higher market value upon receipt. These classic forms of exploitation need not be indulged.


Edit - Of course, face value would indeed be symbolic if Canada law also viewed this as ScotiaBank, something I'm thinking isn't the case.

 

They don't do this by design lest the coins actually be used for currency. It will never ever happen as long as we have a Federal Reserve holding a monopoly over the issuance of money the peons are allowed to use.

 

Suit yourself. Everyone is entitled to their own opinions, but not their own facts. The best way to confirm your opinion is to call one or more Canadian banks and ask them what their redemption policy is at the local branches. That's what I did - back when it mattered.

 

When silver spot was hanging around $20/ounce, I thought $20 would be a decent face value for ASEs. Oh well, this is way too turbulent a market now. TC

 

Like others have noted, the denomination is put their for taxes reasons somewhat. The real reason is collectors. Many collectors simply only buy and collect "coins", and not medals. Without a denomination a ASE is a medal and not a coin. The denomination could be 1 cent and it would still satisfy this criteria. I doubt governments are likely to do this. Why? Could they increase prices? Unlikely. Its only downside in their eyes, not any opportunity.

As to the Canadians not redeeming $5 they can do what they like I suppose, its their country, but if challenged I believe they would be found violating international law by not honoring they own coinage. But, practically, nothing we can do about it.

 

Reagan was convinced to sign the legislation that authorized the ASE and AGE. The legislation was put forth by none other than Ron Paul. Reagan liked the idea of giving people the power to use silver and gold as an alternate currency. However by the time it was to be voted on, Paul was not holding office and there legislation was changed to give nominal legal tender status to the coins. While this sounds innocent enough what it did was to make the coins useless as a currency. Legal tender means the coins have to be valued for official purposes at face value and not intrinsic value. Hence, you can pay your taxes with a AGE, but they will only recognize the face value for it. Yet if you try to take advantage of this by claiming face value for taxation purposes, the IRS/Treasury will hit you up for tax fraud. (already been done)

The lesson of this story is the coins will not get a true value put on them as long as we have a congress which has sold out to the bankers.

 

I don't have unique facts nor are they in question. I do wonder if a customer service rep, be he a trader or no, is to be given credibility when it is clearly in that bank's interest to undercut the ill informed or just plain desperate. Besides, if such coins are purely symbolic in value I would still buy them for the other reasons that I prefer them to US. Can't hurt to have a higher value given that we are so exceedingly far from challenging the face as it is.