Why doesn't the USA circulate silver coins anymore? Is it because every one would hoard them? Could they discourage hoarding by minting a gawd-awful number of them? Would silver coins circulate if they made a 1/2-ounce (0.90 Ag) coin worth say $10.00? With the popularity of digital cameras will the demand for industrial silver lower? Will the price drop accordingly? I want to see some new silver coinage! :thumb: Same questions for gold...............................
When the melt value exceeds the face value of any coin, it doesn't make sense to circulate a coin that will likely end up at a refiner. Expanding industrial use of silver (even with the advent of digital cameras) led to its depletion in the U.S., and in 1965 the U.S. Treasury reduced the silver content of a half-dollar and introduced silverless dimes and quarters. Finally, in 1967, when the demand for industrial silver use exceeded the total annual world production, the Treasury withdrew all silver coins from circulation. Price of silver back in the early 60's? Between $1 to $2 per troy ounce (31.1 grams). Silver and gold are not strong metals. They wear easily and do not last as long in circulation as other metals that are used like nickel, copper, etc. A $10 coin? Look, we can't even get people to use the $1 coin so the likelihood of a coin to circulate with a higher denomination is probably zero. I like the luster and look of a well struck silver coin too, but it's not going to happen. You have melt value, wear, and availability all working against you. That spike you see in the late 70's is when the Hunt Brothers out of Texas were trying to corner the silver market. As fast as price went up, they went just as quickly down, if not faster!
I think Midas is right....even though the Gov is already in the hole buying silver and then using it for less than its worth would put it more in the hole...I guess a few billion more might not be too bad on the Gov but it might up' your taxes. Speedy
Name me one country that actually uses silver in their current circulating coinage. I don't think there are any more countries that do, and in fact you should consider yourself lucky as US still has some silver coins in circulation if you are lucky enough. No other countries can afford to circulate silver coins any longer. In the past, you can pay for quite a fair bit of items with coins. A few sweets? Perhaps quite a fair bit for a nickel. Nowadays, what can you buy with a nickel? Perhaps, it's just powerful enough to choke someone, but that is pretty much it. Buying power of a coin has gone down, and when higher denomination of banknotes got issued to meet consumer price index, coins are getting out of the question. With higher levels of counterfeiting to pass off, adding silver to genuine coins is not a way to deter counterfeiters but in fact making them happy as they could make a major profit. No government is able to "waste" so much money on such expensive counterfeit measures. Gold IS out of the question. Why? Because gold prices are somewhat unstable and hence out of the question. In the past, this was doable because the US used to guarantee *FIXED* price for an ounce of gold, however private ownership of gold bar was not allowed. Suppose if US ever managed to issue such 10 dollar coin (I think some company is doing that though), how likely one not accept it as a payment? Or rather, this would be a very typical example, but would you give a waiter tips in several 1 dollar bills or several 1 dollar coins? I think that is the keypoint of why 1 dollar coins don't get much chance to circulate - there are people resisting coins. Imagine people who don't know the value of coins - what your good intentions of tipping someone 10 dollars could result in fury. I guess that is what you get in a selfish world - all "expensive" things get hoarded by the rich people and general public gets less of it.
Some countries actually issue silver coins at face value. Instead of paying about 30 dollars for a $1 coin, you "pay" exactly the amount that this coin will then buy you if you spend it. A concept which I as a collector appreciate of course except that those pieces do not really circulate. Not even in countries that do have "high" denomination coins. Too heavy, not accepted by vending machines, etc. The Austrian Mint even launched a promotion campaign last year to make its silver collector coins more popular. They are legal tender (well, in Austria only) and easily available without any surcharge. Sure, a circulating silver coin costs the government more than a circulating CuNi piece. The Mint's dilemma, however, is that the fewer people are aware of such coins, the fewer will collect them ... Christian
It is unlikely that you will see any silver or gold circulation coinage due to the reasons others have already expressed above. But this does not impair their collectibility or investment value. I'm not sure how many gold coins ever circulated even when they were designed for that purpose because their value was too high in relation to the typical everyday transaction. But they were and still are a good store of value.
Hello France used 100 francs silver coins until 2001, before the euro arrived. They where 31 mm diameter, 15 gr of 90% silver. The melt value was approximativly 15 francs. Despite the difference between melt and face value, they where massively hoarded, and you could hardly find one in circulation. Worse : most people would look at you as an alien when you wanted to spend one. I think it would be now very difficult to have such coins in circulation. But they where great : you feel having "something" with that in your pocket. Cucumbor
There are huge numbers of five and ten dollar bills in circulation. There pro- bably isn't enough free silver in the world to replace them all with coins. Even trying would drive the price to far higher levels.
This is just like the old saying that bad money drives out good. It's why silver coins disappeared so quickly from circulation in the mid-60s. In addition, when precious metal "co-circulated" with paper currency, the precious metal had more purchasing power. In other words, a pound of flour might cost $1 in gold/silver, but $1.25 in paper. The theory is still alive and well today in different ways. The best price you might get with a loan for your favorite car is $15,000, but offer the dealer $12,000 in cash and he'll give you the keys and probably a few free upgrades.
