Circulation Values for Precious Metal coins

Platinum is one of the most difficult metals to counterfeit... it has a density of over 21 grams/cc... compared to silver which is half of that. This means a silver coin posing as a platinum would have to be twice as light or twice as thick... anyone could tell that... you would have to alloy it with something denser than platinum, and those metals are way more expensive than platinum in the first place...

 

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Problem is then the coins would get circulated and then they more than likely would be counterfeited. I think you have to keep the face value below melt value, just not so ridiculously low.

 

In my opinion you are looking at this issue too much from the view of a numasmatist... If say the price of silver theorically dropped to 0.25 cents/oz... I would sell 1000 silver eagles for $1000 (face value)... buy nice bullion bars (4000 oz. of them) and then sit with those as an investment (speculation of a rise), rather than the coins... If silver goes back to $10/oz... instead of having $10,000 worth of silver in coins... I would have $40,000 of silver in bars instead...

 

I think this article says they already have some fake 2002 examples out there-

http://reviews.ebay.com/Counterfeit-American-Eagles-1-10-platinum-2002_W0QQugidZ10000000002721070

 

I think that the reason the mint puts a face value on bullion coins is a bit of a farce... that is... they want to be able to advertise and sell the coin to numismatists AS A COIN rather than as bullion. Not many people are duped by the subterfuge, but it probably boosts their sales by 10%-20% and so it's worth it to them.

What I really want to know is: Can they be used as currency at face value in order to avoid taxation? So... you offer to buy a $6500 used car for $500... and shell out ten $50 gold eagles. Maybe the dealer say yes, he'll do it. Can you now insist that you only pay sales tax only on the $500... since you have tendered current issue US currency in that amount??

 

There was a case mentioned on another forum where a person was paid in gold eagles, and reported only the face value as income, not the fair market value (FMV). Essentially, the courts said that tax should be paid on FMV, not face value.

 

Hmmm... I had not heard about that case. I understand that they have to put their finger in the dike before that becomes a common practice... but by putting those ridiculously low face values on the "coins" they are just begging for it.