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<p>[QUOTE=&quot;Hobo, post: 396588, member: 11521&quot;]Suppose the US goes back to 90% silver coinage. If you thought the 3 Cent Silver &#039;Trime&#039; was small - 0.80 gram - you&#039;ll love the new microscopic 90% silver dime that weighs 0.184 grams. (Compare that to 2.50 grams for a pre-1965 90% silver dime.) </p><p>&nbsp;</p><p>The above is based on silver at today&#039;s close of $18.84/oz. so the intrinsic value of a dime equals its face value. (I can walk you through the math if you like.) If the intrinsic value of coins exceeds their face value they tend to be pulled from circulation and melted for a profit. </p><p>&nbsp;</p><p>So what happens if the price of silver goes up? The amount of silver in the dime would need to go down accordingly. If silver hit $30/oz. the dime would need to weigh no more than 0.115 gram (at 90% silver) or risk being cast into the melting pot. A coin that small would be completely useless. </p><p>&nbsp;</p><p>At $30/oz. the 90% silver quarter could not exceed 0.288 grams - about 1/10 the weight of a modern zinc cent. </p><p>&nbsp;</p><p>So how could a government make silver coins today and avoid the risk of having the coins melted every time the price of silver takes off? Answer - limit the amount of silver in the coins to an amount whose value would not exceed the face value of the coins at any foreseeable price of silver. So around what price of silver would you design your coins? We saw silver briefly hit $50/oz. in 1980. Could silver reach $50 again? You betcha! </p><p>&nbsp;</p><p>So you may want to design the coins around silver at some price above $50/oz. If you plan to produce 90% silver coins - dimes, quarters and half dollars - those are going to be some tiny coins. What if you reduce the silver content to say 10%? That way you could produce a larger coin with at least some silver content. But is 10% silver really worth the effort? </p><p>&nbsp;</p><p>With the wide price fluctuations of precious metals today it makes it next to impossible for a nation to produce circulating silver or gold coins. One day the coins have very little intrinsic value and the next they are worth well above face value and get melted. </p><p>&nbsp;</p><p>The age of circulating silver coinage is over. Clad coinage is here to stay. Get used to it.[/QUOTE]</p><p><br /></p>

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