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Buying Silver Coins & Silver Bullion

Silver EagleJuly 7, 2014 | by Steve McCurdy

In times like these we strongly recommend holding a part of your portfolio in physical precious metals. We have discussed gold ownership here and this post is devoted to buying silver coins and bullion. Silver is frequently referred to as “Poor Man’s Gold,” and we believe an outstanding opportunity exists right now in silver. Prominent silver analyst James Turk recently stated that he thinks that at its current price, silver is the most undervalued commodity in history. 


Brief History of Silver


The use of silver as currency dates back more than 2,600 years to the ancient Greek Drachmas. The first official United States silver coin was the half dime, which was minted in 1792, reputedly from Martha Washington’s silverware. The first US silver dollar followed closely behind in 1794, as did the dime, the quarter, and the half dollar. Silver continued to be used in US currency coins until 1970.

Ancient Silver Coin
Ancient Greek Drachma with Owl & Olive

A variety of paper Silver Certificates were issued in the US from 1878 to 1964. All these certificates were redeemable for silver dollars until 1968. The Silver Certificates are still legal tender, but are now redeemable only into Federal Reserve Notes. If you go here you can see photo images of all US Silver Certificates ever issued.

 Silver Certificate 
 Silver Certificate
 Silver Certificate
Silver Certificates - Various Denominations

In 1934, as a follow up to FDR’s Executive Order 6102, over 117 million ounces of privately-owned silver bullion were redeemed by the US government for $.501/oz ounce, which was $.79/oz less than the then-prevailing silver coinage value of .29/oz.

Unlike its expensive cousin gold, silver has a variety of commercial uses, and is a critical industrial component in photovoltaics (PV), the method by which solar radiation is converted into electricity. Future shortages of silver are anticipated unless prices rise and mine production can be dramatically increased.   

Alleged Market Manipulation         

Prior to buying silver or silver shares, investors should be aware that many prominent silver traders believe prices have been artificially suppressed by major money center banks acting in collusion with the Federal Reserve since 2008. The Commodity Futures Trading Commission (CFTC) began investigating charges made by traders against JPMorgan Chase in 2008 after the bank acquired large silver short positions as part of its acquisition of Bear Stearns, and separate federal lawsuits were filed against JPMorgan Chase and HSBC (a large foreign bank) in October, 2010, for silver market manipulation.

The suits have since been dismissed, but the traders believe that price suppression continues unabated. They remain confident that growing silver demand will ultimately overwhelm manipulative short positions, and that silver prices will then spike up like a coiled spring to free market levels.  

Buying and Storing Physical Silver

Silver Bullion BarsYou can buy silver bullion bars and coins from many qualified dealers both in the U. S. and abroad. By “qualified” we mean dealers who feature wide selections of both bullion coins and “junk” silver, competitive pricing, quick delivery (if you choose), and excellent buyback policies. Some also provide secure storage options.

Bullion silver bars and coins are .9999 pure silver and trade at modest premiums to their intrinsic (or melt) values. They have no numismatic value.

“Junk” silver, refers to United States silver coins minted prior to 1965 (1970 for the Kennedy Half Dollar). Junk silver coins consist of 90% silver and 10% copper (except 1965 to 1970 Kennedy Halves at 40% silver), and are generally sold in random denominations in different sized “bags.” Premiums over melt value can vary greatly among dealers by coin, mint mark, and condition, so you should shop carefully.

Junk Silver
Junk Silver Coins - Pre 1965

Some dealers also offer brilliant uncirculated (BU) pre-1965 US silver coins, but these coins can have significant numismatic value and so are sold at higher premiums over their intrinsic value. To browse through some good deals on popular silver coins check out our S & P Store.

Your storage options for silver coins and bullion are essentially the same as those described for gold here.

Advantages of Silver Coins


In his new book “The Death of Money” acclaimed monetary expert James Rickards predicts the demise of the US dollar as our unit of currency and a store of value. If Rickards is correct there might be a period prior to establishment of a new monetary system during which silver and gold coins will be used as a default currency. In that event silver coins will have greater utility as currency due to gold’s extreme ratio of value to weight (a gram of gold has higher value than an ounce of silver). Gold, on the other hand, will have greater utility as a store of value for the same reason. Both metals have excellent liquidity and both have enjoyed universal acceptance as money for more than 4,000 years. We believe holding quantities of both metals is good policy. You are wecome to browse some silver coins and bullion at our S & P Store.

Buying Silver Stocks


Another way of buying silver is to purchase shares in silver mining companies. We believe the mining shares represent a great value right now. Average share prices have dropped 25% since August, 2012, and many mining stocks are trading at all-time lows against the underlying price of silver.

However, as it is with gold, mining silver is a complicated, capital-intensive, and risky business, and share prices are highly volatiIe. Successful investing in silver shares requires significant research and thorough familiarity with mining companies and their management teams.  Because many mining companies are privately owned this research can be very time consuming and the best opportunities are sometimes hard to uncover. We have included a list of highly regarded metals and mining analysts here, and we recommend that you rely on one or more of them to help you make your investment decisions in the silver sector.


There are many alternatives for buying silver, just as there are for buying gold. And like those for gold, decisions to buy silver deserve careful thought, planning, and preparation. If you are interested in silver we hope you have found this post to be a useful and valuable resource, and we wish you the best in your investing.  


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