Silver rush

Ever since the coin show, I’ve been devoting my considerable resources toward obtaining silver coins. There are some real bargains out there if you know where to look and what to look for. Not too many people know that Mexican 10, 20 and 50 New Peso coins were struck with a sterling silver center, containing .17, .25 and .5 ounces of silver, respectively. There is little distinction, too, between the coins containing silver, and those that do not. Only after the ‘New’ label came off of the name of the currency, was silver replaced with base metals.

Other really good deals have surfaced on eBay as well. I recently obtained an uncirculated Bahamas $1 coin dated 1966. Not only is this worth a considerable amount in melt value, but it also holds a decent numismatic value. Its worth is probably around $11 or $12, but the silver it contains is worth nearly $15. Not a bad appreciation, since I only paid $5 for it.

Of course, my favorite and most coveted silver coin remains the bullion ‘Wiener Philharmoniker’ 1oz, 1.50 euro. There still remains a spot in my heart for vintage American silver coins, but they’re always so old and dingy. The newer, foreign coins are far more illustrious. The Canadian Maple Leaf coins are also nice to look at, as are the British sovereigns.

I would love to expand my silver collection to include Dutch 5 euro coins, but there is absolutely no reliable supply of them on the internet. Perhaps I’ll have some luck visiting a local dealer.

The price of silver has been coming down rather quickly these last few days. It is presently trading at $28.85/oz- an eleven month low.

So many pennies

At long last, I made it to the bank and obtained $20 in pennies. That’s 2000. Naturally, there wasn’t a seat on the bus I took home, so I had to stand with the pennies weighing down me and my backpack. My journey home was made extra long, when our bus happened upon an accident at a crucial intersection, which caused a long detour. Finally, I made it home.

Soon enough I was at my desk, sorting roll after roll. Of course, my goal was to find copper pennies, but I wouldn’t have objected to keeping bi-centennial 2009 pennies or steel pennies, though I knew finding either was a long shot.

After looking at all 2000 dates, I found 4 wheaties, 8 Canadian, 9 bicentennials, 50 shiny new 2010s and a grand total of 713 pennies dated 1959-1982. I imagine it will be quite easy to determine which 1982 examples are zinc and which are copper- the newer zinc coins weighed less than the copper.

155 pennies composed of 95% copper make up a full pound of copper. At current market value (as of 13 Jan 2011) the price for a pound of copper is $4.41, which is a 285% rise over the value of the metal that 155 copper pennies are composed of. My plan is to divide the pennies into 1 pound sacks and put them on eBay. Perhaps I’ll start the price at $2.

Since it took less than 3 hours to sort through all 2000 pennies, it would be no trouble to go through even 5000, if the pound sacks start selling.

The end of bronze coinage

Over the last 20-25 years, bronze coins in countries all over the world have gradually suffered the same fate as silver coinage did 50 years ago. While the end of silver coinage was relatively quick in some parts of the world, the replacement of copper coinage is happening at a much slower pace. Nonetheless, it is happening.

One of the first major world economies to replace copper in small denominated coins was the US and it was the one cent coin which lost its copper content- at least the majority of it in 1982. With copper prices a bit higher than historically normal prices at about $4.35 per pound, and taking into account the weight of the US one cent coin, only 136, or $1.36, contain enough copper to equal a pound and thus $4.35. The higher copper price is resulting in a manifestation of Gresham’s Law, which in part states that ‘good money is driven out by bad money’. In other words, people will keep the good money and circulate the bad money. This happened in the mid-sixties in the US, when the 90% silver dimes and quarters were replaced with a cupro-nickel composite.

In 1992, the UK and Ireland replaced their 1p and 2p coins, which were composed of 97% copper, with copper clad steel. The copper content dropped to just under 8%. In 1997, Canada replaced the majority of copper in their pennies with zinc and then steel in 2000. Russia replaced the copper content in their kopeck denominations with steel in 2006. Copper disappeared altogether from Mexican centavo coins in 1986. From then until the New Peso was introduced in 1993, there was no copper in any Mexican coins. Presently, the only copper can be found in the bi-metallic 1, 2, and 5 peso coins- and only in the center. The rings are steel. Most Central and South American countries have coinage that is composed of steel.

Along with the removal of copper and bronze coinage, there is a shift toward steel or clad zinc and nickel from cupro-nickel coins. The amount of copper in some of the higher-denominated coins around the world, especially the Euro coins and US coins, however, is secure since a startling jump in copper prices would need to occur before scrutiny is brought to their composition. It would take almost 100 US quarters, for example, to equal a pound of copper. This would be an intrinsic value of $4.35 vs. a face value of $25.00.

Copper composed circulation coinage has a long history in many parts of the world and holds a small part in the history of a number of countries and even cultures. The removal of copper from the worlds coins only serves to reduce the over all value of the coinage. There is no value in steel. Old silver coins were backed by their very intrinsic value. The same can be said of copper or copper alloy coins as well. The value of a 1979 one cent piece from the US is higher than a present day one cent piece. The copper content may in fact be worth more than $0.01, but at least there is value to the coin.

Present day coinage holds little value. Because of the increased population of the planet, more government are being forced to produce more coins. Higher mintage figures coupled with the reduction of precious metals in the coins of today is reducing the value of the coins to collectors. Worse still, it is greatly reducing the overall value of the currency itself.