Exchanging 40% silver for 90%

Didn't know whether to post here or in "U.S. Coins"...

I have a few rolls of 40% Kennedy half dollars. I don't really want to sell since the price of silver is in the proverbial crapper right now.

BUT does the current trend downward in price affect a deal whereby I "exchange" 40% silver for 90% at a LCS?

The only downside I foresee is that the dealer will probably be hesitant to bring in silver of ANY kind in light of the price trend.

Thoughts?

 

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I would expect that when the price of silver is dropping, the premium gap between 40% and 90% would widen, even if there's no rational basis for it -- in other words, 40% becomes even less desirable.

If you think about it, though, that's kind of counter-rational; silver would only have to drop by maybe 80% to reach the point where 40% halves are worth face value (and would drop no further), whereas it would have to drop to less than half that level before the 90% face-value backstop kicked in.

On the other hand, I don't think anybody expects silver to drop that far, and 40% halves are bulkier to store and carry.

 

I'm not so sure any LCS would trade 40% for 90%. They are in business to earn a living. I'm sure they would buy 40% from you and sell you 90% but of course one would have fees attached to both.

 

They may exchange 40% for 90% but you can be sure it's not going to be at equal spot value. It's going to be heavily in their favor with you taking a hit when they value your 40% and paying a premium when they value their 90%. In fact you'd probably do better selling the 40% and converting it into 90% yourself than what a LCS would offer for a trade.

 

Agreed, and will be in their favor not because they're trying to take advantage, but because they'll be taking a much less desirable form and giving the OP what's much more desirable. Although there's always the change of an exception, I also agree that he very well may be better off simply selling his 40s and using the proceeds to buy 90.

 

Both 40% and 90% are bought from you at a discount because it costs to refine to pure .999 silver. Costs more to refine 40% so a bigger discount.

About the best you will do is 3:1 ... do you want to lock in your losses?

 

My silver/gold guy says the smelter doesn't even want the 40's.
He doesn't send in the 90's either. I bought some last time at 14x.
I got a really nice 1919-S VG Walker for $7, and a Booker T commem for $7. Also a really nice MS Franklin for $7. Spot may have been about 6.25 at the time, but I realize this is a business, and he was nice to let me cherry pick through his stuff. He was prob paying 10 or 11x and selling at 14x.
I bought 10 at $7. Those were the best 3, there was one other decent Walker. Something from the 1920's in G. I'll have to fish them out and look.

 

Our local pawn shop was buying 90% at 7.5x and selling (or trying to sell) at 15x. General rule: don't sell to pawn shops.

 

Pawn shops are a bad idea regardless, just way to much interest on the pay back
Unless you have a winner !!

 

Like trading nickels for cents

 

I get 90% spot value for my 40% Kennedy Halves. Last weekend I applied four tubes of 40% ($40.00 face value) towards 20 Darth Vader coins. I paid the rest in cash. I don't know of any place that offers me better than that. if anyone knows of a better deal let me know. As far as the OP's question I would think a dealer would be consistent with his buy back price wether silver was hot or not.

 

Come to think of it, that's probably about what I get from my favorite buyer at local shows. Problem is, he doesn't come to all the shows, and nobody else is close -- in fact, at the show before last, NOBODY wanted 40%.

 

I'm going to assume the following:

If you want to trade 40% for 90%, you'll be looking at 5:1 ratio, MINIMUM.

If the store *really* doesn't want 40%, they might do closer to 7:1.

The reason is that the outer layer is a higher ratio of silver than the inner core. As such, 40% silver loses silver content at a much faster rate than 90%. Others may dispute this and say it's irrelevant, but perception matters as much as anything.

Quite honestly, if the LCS offers you 4:1 or 7:2, you should consider yourself very lucky.

I'd say there's a 0% chance the LCS will offer better than that.

 

40 % coins generally are not in it for the long hall, even under average ware
you will lose a big percentage of Silver, so not highly desired.

 

Hmm. I've blown the "wear takes off metal" trumpet here for a long time, but even my slickest Barber half probably hasn't lost as much as 10% of its weight.

Out of the thousands of Kennedy halves I've handled, I could count the sub-XF examples on the fingers of one hand. That means they've lost scant milligrams of weight due to circulation; that's probably one reason 1964 Kennedys often trade at a premium over other forms of 90% junk silver.

If you assume all the wear comes off the 80% layer (almost certainly true), it just means the proportion of silver lost is twice what you'd measure on a 90% coin. (Taking off 10% of the weight of a 40% Kennedy would take 20% of the silver; taking off 10% of the weight of a 90% coin would take 10% of the silver.) Since you're losing probably well under .1% of the coin's weight at these wear levels, you're still ahead of the typical circulated 90% junk.

 

The problem with refining 40% is that you have the two outer layers of 90% silver, 10% copper and the inner layer that is 100% copper. When you melt it, you have to refine out the 60% copper.

With 90% your starting point is purer, so it takes less (power, chemicals) to do the refining.

 

No, 40% is two layers of 80% silver/20% copper bonded to a core of 79% copper/21% silver. But your point about refining is still accurate.

The consensus from previous discussions, though, is that it's unusual to melt 90% -- it's a lot more common to trade it onward as coins, since their purity is easily recognized and guaranteed.

 

I Coin Roll Hunt halves and end up with tons of 40%ers. I trade for ASE's and other coins. The dealer I trade with doesn't even count them and throws them in a bag that goes to his melter. He does enough bulk that I believe the 90% of melt offer he gives me is very fair.

 

40% silver was a failed and ugly experiment. looks cheap. almost as bad as the 10% Mexican crap. Sign of a decaying Empire. Look at the Romans. The last decent silver from them was when Brutus slid that dagger into fat old Nero's bloat.
Where did this negativity come from? Sorry folks. Happy 4th!!!

 

How can we figure a better deal if you don't say how much "the rest in cash" was?