Let's Be honest, what can you really sell your Silver for?

Discussion in 'Bullion Investing' started by About Good, May 6, 2010.

  1. About Good

    About Good Junior Member

    OK People,
    Let's get back on topic a little.
    I want to know from a REAL dealer or someone who has serious knowledge CASHING in Silver, raw, slabbed, ingots, etc...
    Here is a perfect example:
    I walk in with a slabbed MS70 PCGS 2009 American Silver Eagle.
    I also have a slabbed MS69 PCGS 2009 American Eagle,
    I also have a nice BU raw 2009 American Silver Eagle.
    How much is a dealer going to pay for each of those?

    Sure, Dealers are all different, and I would like to hear from expieriance.

    I do know this as FACT.!! If you are a distributor for the US Mint, You MUST SELL TO ANYONE WHO WANTS TO BUY BOTH SILVER AND GOLD, AT THE CURRENT SPOT PRICE (and adding a little premium, but I believe It's NO MORE than 2%, if I remember correctly), no matter how much it has dropped or raised.!!

    This is written into their contract, and can be read on their website.
    You can also search on the U.S. mint site for your local distibutors.
    I found mine, but for some reason, when prices drop, they seem to not have any? Well, that just isn't they way the US Mint wants them to operate.
    But saying that, They are set-up NOT to lose money , no matter what happens to the spot price.....

    Let me explain this......(and this is my understanding reading the contract)

    The U.S. Mint sets up the account with the retailer/distributor. Now , when someone comes in to buy a , let's say a Silver Eagle coin..
    Let's say Silver spot price that day is $16.00, OK, the dealer say's ok, I will sell you one at $18.00. (I am not sure of the mark-up, as I haven't read the contract in about a year, but it is something like 2.00 or a small %). Anyway, you buy it.
    NOW, the dealer/retailer/distributor is supposed to NOW buy another coin right away from the U.S Mint/distributor for $16.00 to replace that coin. Now,Let's say tommorrow, silver spot price drops to 12.00 an ounce. A person comes in to buy a ASE. Dealer is suppose to sell it at 12.00 spot plus their small premium.!!
    OK, you buy it at let's say 14.00, Dealer is suppose to buy from mint at 12.00 to replace that coin.
    I know this sounds confusing, and I may have some of the facts confused a little, but that is HOW it is supposed to work. !!

    Maybe the distributor is someone like Ampex, or some huge distributor , and maybe the local dealer is buying from the distributor. (I did ask my local B&M, who is Listed on the US mint site as a US MINT retailer)
    But they told me, they don't want to lose money, as they bought the silver at a higher price?....

    Anyway, that is the jist of it, and if someone can explain it to us or me more clearly, that would be greatly appreciated,. I will also, re-read the contract tommorrow, as I have other work related things to do.
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  3. SilverSurfer

    SilverSurfer Whack Job

    As long as the premium was "high enough," and the business had a decent turn over rate, the dealer should always have bullion to sell. Turn over rate is the key though. Consider...

    Silver spot is $18, dealer chargers $21 for a ASE. He takes the $21 to restock. Bullion prices go up to $19, so he has to restock at this price, but he still made $2 overall. Next he purchases for $19 and then you come in to buy when the spot price drops to $17.50. He charges $20.50, his usual $3 over spot premium. He still made $1.5 on this ASE. He takes the $20.50 and luckily the price of spot doesn't change and he purchases he restock at $17.50. He takes his stock back to shop, during the week, the price gets hammered and spot goes down to $14. You walk in to buy, he charges $17, his usual $3 premium. It appears he lost $.50 on the last transaction, but it is in his interest to do so, so he can now restock at the $14 price and hopefully make his money back when the price goes back up.

    So, a decent but reasonable premium and a rapid rate of turnover are two important features of a successful bullion shop.
  4. Vess1

    Vess1 CT SP VIP

    Seems a lot of great points have already been made. Though I would warn against assuming things can or will always be the way they've been. People in the 1840s never could have dreamed of what would transpire in the 1940s. Nor could people in the 1940s dream up what we'll be doing in 2040.

    In the last couple of centuries, things have advanced extremely rapidly. 100 years seems like a very long time to people but realistically it is not. Look at all the changes and progress that happens over a 100 year span. Both the good and bad have been DRASTIC to say the least.

    We've only been off the gold standard for about 40 years!! We're still early on in this experiment with a floating currency, that has failed empires in the past. The national debt didn't hit 1 trillion until 1980. Now we're at 12 trillion in 2010. We'll be at 22+ trillion in 2020. Our social programs are already feeling the strain from what is just the beginning of the huge baby boomer retirement wave.

    I feel that it is prudent to think as realistically as possible. That may mean things change drastically some day. I believe your statement to be EXTREMELY short sighted given the facts that we are all aware of.

    It's unbelievable to me that our system has worked up to this point. Since there is zero backing to the paper they print and also given the fact that they print an endless supply now. There is nothing backing it but a belief. It's fancy paper with a special complicated process to create, issued by the government. So that = value to everyone. Very flimsy definition of money in reality. Cash can't even hold up to the physical riggers of commerce but for a few years before it's worn out and unusable!!

    I would like to hope in a total SHTF scenario, that groups of people could band together, peacefully survive and barter amongst each other, using PMs or whatever. Whatever cash was left in use would be worn out in a few years as nobody would be replacing it anymore. It's possible some wouldn't want it out of their disgust alone, since it came from the govt. that failed them. Others wouldn't want it as they finally saw through the smoke screen and realized what a scam had been played on everyone.

    Whatever scenario, I suspect it would take a while for things to calm down and enormous loss of life before anything got back to a "peaceful new start." If it was 1790, I wouldn't worry about it. What was once a mainly self reliant, small population has become an enormous population entirely dependent on the system. With few people prepared to deal with a catastrophe lasting longer than 1 week!! Few people posses even the most basic of skills beyond what's required for their jobs. The network we rely on is very fragile.

    As I've said before, once people get hungry, they would all be desperate to survive. In a month or less we could have total chaos. At that point, none of you together could combine enough cash and/or PMs to buy firearms or ammo off of me. I don't care what you've got. We'd have to get through that stage first.

    Once things calmed down, I would have no interest in the cash. A carton of eggs, shoes, ammo, maybe? If you possess none of those things, I might sell you something for a few ounces of silver, that I could transfer to somebody else that DID have what I needed. (Assuming we could make it to that point.)
    I'd roughly estimate there are at least 50% who have nothing to offer and would need to take from you in order to survive. They would have to conform or be dealt with in order for the other 50% to operate in a civilized manner once again.

    Nobody can deny that we have:

    - A huge, ever increasing population
    - All dependent on a huge, very fragile network of shipping
    - A large percentage that expects to be taken care of with no plan beyond today
    - A reliance on a floating currency that will be inflated indefinately to push our problems off to future generations as long as it can possibly be done
    - A national debt that will never be paid off.......conventionally

    - have had formal devalutaions in the past with informal devaluation taking place every year.
    - other countries, out of necessity, have devalued their currency and left their people out to dry

    If your grandparents were around in 1933, they could have turned in a $20 gold piece for a $20 bill. They could have saved that $20 bill at home for you today. And, you could take that same $20 bill and take the wife out for dinner at an average restaurant tonight. (The tip would have to be on you of course!)

    Or, they could have saved the $20 gold piece and gave that to you. If you feel cash is king, then I assume you would have wanted them to get the $20 bill for you?

    BTW, some people will accept silver or gold as payment, as good as cash. The grocery store can't, because they're obviously not set up for it. If the government collapsed, then what? Then what does the grocery store accept? Who's making what money to use? Things would change in a hurry.

    It may sound extreme but a terrorist or rogue nation detonating a nuke in the atmosphere would send out an EMP shutting down entire regions for not 1 week, but months or years! That's no electricity. No trucking. No communications. At the push of a button it would be welcome back to the 19th century, only with hundreds of millions of spoiled, 21st century people. In that case, good luck my friend.
  5. cpm9ball

    cpm9ball CANNOT RE-MEMBER

    There is a difference in collecting coins as a hobby and investing in precious metals as a hedge against inflation or an unstable economy. Both of these options have their own unique set of knowledge requirements to enable you to acheive the best results.

    Investing in precious metals is no different than buying stocks, bonds, commodities or even real estate for that matter. You have to know when to hold 'em and know when to fold 'em, and if you don't know how, where or when to do that then you shouldn't be putting your money at risk. You don't count your money while you're sitting at the table because it isn't worth squat until the dealin's done!

    Unfortunately, today's society is so entwined in the global access of internet communication that anyone can be a player. It doesn't make them a smart player. It just makes them a player, and if they can't afford to lose the money then they shouldn't be sittin' at the table hittin' the BIN with their mouse.

  6. dctjr80

    dctjr80 Senior Member

    If you are putting away PM for when the SHTF, I would hazard a guess that you should purchase beat up pre-1965 dimes as close to spot or less when ever silver prices are down and now here is why. If you flash a gold piece to buy what you need your neighbors will probably kill you that night hoping to loot you for a fortune to help kick start their lives again. I pick the pre-1965 dime because it is the cheapest smallest denomination available in 90% silver. ( let's face it, when the SHTF and you only have a silver quarter or bigger, but the cost is only a dime, no one is going to offer change. ) unless we start cutting coins like people did historically to make change.
  7. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    Vess1, congratulations for summarizing every doom and gloom theory proposed over the past 40 years into a single post.
  8. Billincolo

    Billincolo Senior Member

    Never having been through a SHTF scenario before, at this time in history (which is different than times before), I would imagine the devaluation that's most worrisome would be the devaluation of life in the mind of your hungry townspeople and anyone less "civilzed" than we consider ourselves to be.

    In a real SHTF situation, those of us who are "more civilized" will be tormented and victimized by "less civilized" gangs of toughs who prowl and steal from those who appear to have something they want. Whether it be silver, gold, toilet paper, cans of beans or dried fruit, ammo or firearms, gasoline or a self-contained solar unit, they will search for it and take from the weak.

    If the SHTF to that extent, we'd all better have a place to run and hide, and valuables to carry with us.

    I personally think that will not happen. I also think I will always be healthy, but I buy health insurance. I never think I will have a car wreck, but I buy auto insurance. I don't think my house will burn down, but I have insurance on my home. I hedge all my bets. Therefore, I've been readying my self and my home for the SHTF in various ways.

    You never know.
  9. jallengomez

    jallengomez Cessna 152 Jockey

    There's a good looter mentality. Let me ask you: How would your actions be any different from the actions of someone current day who would commit armed robbery against you because they were in need of "common goods" and you had the goods?
  10. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    It never ceases to amaze me how many people, when faced with the prospect of hard times, intend to take what they need by force, and kill to protect what they own. Very few people ever say they plan to get together with the folks in their community to work toward a solution to the problems they all face. Maybe we don't study enough American history to realize it was groups of people working together who built our towns and economy out of wilderness.
  11. jallengomez

    jallengomez Cessna 152 Jockey

    It amazes me too. In good times or bad, becoming a looting thug is never going to accomplish anything. Cooperation and the mutual exchange of goods and services is the only effective way to interact with one another.

    RUFUSREDDOG Senior Member



    lEADING TO A REALLY BAD month? Followed by a worse year of SHTF?

    If you wanted to swap a cup filled with PM's for a cup of pure cool water

    every survivor would know what someone elses PM were worth.

    With a little help from your friends you could all be drinking pure water from silver cups.

    But the contents would be worth more than the containers.

  13. Simms

    Simms Tactile History

    Ahh the history of the usage of silver lined or solid vessels to hold water, silver is special, it helps keep whatever it holds from spoilage.
  14. Info Sponge

    Info Sponge Junior Member

    Is that why rainwater is so fresh, because clouds have silver linings?

    Alexis de Tocqueville remarked that a particular strength of Americans was banding together for common tasks, and that's the attitude that will prevail in any prolonged crisis.
  15. swish513

    swish513 Penny & Cent Collector

    we went off the gold standard in 1933. last time i checked, we weren't living in 1973.
  16. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    The US went off the gold standard on August 15, 1971.
  17. swish513

    swish513 Penny & Cent Collector

    so you could exchange a paper dollar for a gold dollar on august 1, 1971? or did the us gov't stop backing the dollar with gold in 1933? because i am pretty certain the us stopped printing gold certificate notes well before the 1970s.
  18. Info Sponge

    Info Sponge Junior Member

    The reference is to what foreign central banks could do. Until 1971 they could (and did) get gold at a fixed rate in exchange for dollars.
  19. swish513

    swish513 Penny & Cent Collector

    oh, gotcha. i always understood the gold standard to be a little different. thanks for the info! :high5:
  20. Vess1

    Vess1 CT SP VIP

  21. Vess1

    Vess1 CT SP VIP

    I welcome anybody to correct anything that is false or incorrect in the post.

    Be honest with us. Do you really think in another 100 years, that the U.S. will still be trudging along as we are now? Only with the national debt into the quintillions, and everything else has adjusted up so there is no change or disruption to anyone's lives or savings? Do you think they'll always have the luxury of whining about social security, medicare and everything else STILL being unfunded, yet still paying out as normal? Just one hundred years from now? Forget about 200.

    I think it is clear that the writing's on the wall.
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