Discussion in 'Coin Chat' started by Luke1988, Sep 14, 2010.
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Myself, I like ASE's as a store of silver in convenient form. I buy the cheapest I can because silver is silver is silver when it comes to bullion and grade doesn't effect the price at the refiner.
What does the fact that the coin was not made to circulate have to do if the coin is a numismatic coin or not? And there are plenty of people that wast money on modern high grade coins made for circulation. see this thread
Now on the idea that bullion coins don't circulate, this is not entirely so. They do change hands and go in and out of ownership from one investor to another. Many of those holders of these coins may not care for these bullion coins in the way a collector would, this narrows the supply of (applying numismatics) high grade bullion coins which may one day, in the future, appeal to collectors. So there are things to consider about bullion.
Someone recently suggested ordering a custom Dansco album to collect bullion 1/10th oz. AGEs and noted the amount of money wasn't too obscene to put together a whole set of these coins. I think it will look great when that collector finishes his set. Collect what you like not what the market tells you is collectible, valuable or otherwise. It takes innovators to drive the popularity of things. Look at toned coins. In the past it was pretty clean(ed) white coins that were more popular and many toners were dipped or worse. Now toned coin collectors abound and a whole niche category within coin collecting has developed. At the very least, you are wrong and no bullion coin collectors ever emerge for the Eagles and Buffaloes and you are left with the invested intrinsic value of the metals.
I also caution you against paying high prices for slabbed bullion unless you are certain of the deal you are getting. There are a lot of dealers that hype high MS graded coins with prices that are astronomical. You should do better applying those funds to entire untouched tubes of Eagles to judge and submit for grading on your own such coins if you require that, plus you will end up with more bullion holdings otherwise lost to profits made by the dealers. I buy bullion as an investment with the above in mind. I appreciate the designs of the ASE and AGEs, AGBs and in my care, they are looked after as one of my numismatic coins are. Just some thoughts...
In order to avoid possible confusion, that type of activity (change of ownership) does not equate with "circulate", as it is commonly used.
But I still collect them!
Yes, in an extreme numismatic definition this is primarily true. Govt. issued bullion coins, minted as such with denominations, have every potential to circulate and stories have arisen of ASEs being turned in and resold to customers at face value from banks while rare occasional others have been plucked from shop tills. Even so, bullion coins are not idle and certainly are circulating amongst investors, changing hands at coin shows, even being used as money by collectors trading Eagles (for instance) for other numismatic coins. Many dealers sell off-quality Eagles and other bullion coins at less of a mark up over spot price. While they sell those for less of a mark up, new and or bright clean BU bullion coins from previous years are being sold for more. This implies to some degree the mindset of buyers are focused not just on bullion/intrinsic aspects but that they are already responding to eye-appeal. The potential for bullion coins, I primarily mean ASEs and govt. issued bullion, as numismatics grows with time. I understand it's not a popular opinion to hold.
The problem I have with any US coins as bullion is my definition of bullion. Bullion, to me, is precious metals whose value lies SOLELY in their intrinsic value as a precious metal. American coins of any precious metal (Platinum, gold, or silver) are all affected by condition, mintage, date, type of strike, etc. This breaks the definition of bullion to me. I know there are some dealers who buy and sell them similarly to the prices of bullion, but in most cases I would define them as numismatic items and not bullion. Despite the Mint's definitions, if the market handles them more like coins than bullion, then they are coins.
But do you realize that people like you, meaning those who think of the bullion coins as you do, are a very small minority ? 9 out of 10 dealers, maybe 95 out of a 100 dealers look at them as nothing but a chunck of bullion. If offered to them for sale they will give you not 1 cent more than they would for a gold or silver bar of the same weight.
And the same is true of most coin collectors. To them they are not coins. They are nothing but NCLT - non circulating legal tender, a chunck of bullion.
People often make the mistake of think that just because they think a certain way, that everybody else thinks the same way they do. Well they don't. As I said - you are in a very small minority.
In this rare case I do trust the goverment.
Most of the bars and rounds are legit....Most art bars are listed in the Guide to Silver Art Bars books. (I think there`s 6 editions now) Many of the older so called mints are documented and known as well.....But I can understand where You`re coming from.
I am sure silver will go higher but at $20 for spot is a good time for me to get rid of
this type of silver as I got it for cheap
I bet those dealers only hold the view of SEA's as being pure bullion when they are on the buying end but if you tried to buy SEA's from them for the same price they sell bullion they would laugh at you. To me the statement "non circulating legal tender" can also apply to any commemorative, proof or satin coin and even Morgans and trade dollars.
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