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Converting rare silver US dollars to not-rare junk silver

Posted by John T. Reed on

We had a Fibber McGee close until yesterday. That is, a walk-in closet, with shelves on three sides with all the shelves filled as well as the space you used to be able to walk into. If you opened this closet, you almost need to stand back to avoid the avalanche.
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My wife cleaned it out finally—mostly her stuff. That turned up some stuff vaguely remembered to be there, but not seen in years. Some were savings bonds in the names of our kids and my wife. Her family was big on those. And one each from my mom for our three sons.
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Another for which I seek reader advice was a combination of coin collections from my wife’s grandparents, parents, and siblings, all of whom are deceased. The coin collections generally were not systematic. Just stuff taken out of pocket change over the years because it seemed momentarily important. And both my wife’s paternal grandparents and her parents were expats for most of their adult lives so lots of foreign currency.
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But one item seems to have been systematically gathered: U.S. silver dollars, especially Morgan 1878s. That was the first year that coin came out. Over 90 silver dollars from various years.
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As one concerned about hyperinflation and depression, I have a hedge and diversification interest in alternatives to the U.S. dollar and cash assets.
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The coin approach is I like junk silver. That is, U.S. dimes, quarters, half dollars, and dollars minted before 1965. They are commodities in inflation and excellent barter items. See my article https://www.johntreed.com/blogs/john-t-reed-s-hyperinflation-deflation-blog/60940227-disadvantages-of-gold-as-an-inflation-hedge for a list of junk silver’s virtues.
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Lately, the value of junk silver has fallen to 10.877 times face value. That is the best price I have seen in years and is at or below the historical long-term average price adjusted for inflation.
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However, I do not like numismatic or rare coins. I do not trust the relative value to remain the same in a financial crisis. Junk silver is bullion, which means that value is simply the weight of silver and copper in the coins. Numismatic value stems from popularity with coin collectors. I cannot analyze that and such people probably diminish in number during monetary crises.
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Can a coin be both numismatic and junk silver? Only if the two values happened to be the same, which would be a rare occurrence. If it has numismatic value, that is the value that matters. You would be crazy to sell a numismatic (high-priced) coin for its junk silver (relatively low) price.
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So what’s a pre-1965 U.S. silver dollar worth today as junk silver? I already told you: $1 x 10.877 = $10.88. But an 1878 Morgan in extra fine condition as ours seem to be is worth $27 to $31. That is $10.88 from its melt value and an additional $16.12 to $20.12 for its rarity and popularity with coin collectors. Rarity is a function of age and condition.
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I think I will convert silver dollars with with significant numismatic value to junk silver, in other words, trade the rare silver dollars for non-rare silver HALF dollars like 1964 JFKs. Why not 1964 silver DOLLARS? That denomination seems to have a bit of a premium above junk silver. Don’t want no premiums above junk silver.
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I know many of my readers are into this stuff. Any advice on why my approach is incorrect or how to do what I am trying to do efficiently? This is only about $2,000 worth of coins since many are not 1878s. I do not want to spend a thousand dollars of my time trying to get another dollar per coin.
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The cache also had a couple of one-dollar U.S. silver certificates. Before 1965, you could trade those for, say two silver half dollars. But no more because they were invalidated for that purpose when the U.S. Mint stopped minting 90% silver coins. I might as well just stick them in my pocket and spend them, but I will see what a dealer will pay for them if anything when I get rid of the numismatic silver dollars.
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Some of the dollars are post 1965 Eisenhowers. They are only worth $2 or $3. I may just keep them as junk silver. There were also a couple of Susan B. Anthony 1979 dollar coins. Same deal as the Eisenhowers. More or less worth a dollar still.
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https://www.johntreed.com/collections/john-t-reed-s-book-on-hyperinflation-and-depression

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