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copperbullion
Penny Pincher Member
Australia
136 Posts |
 Posted - 01/03/2008 : 03:32:54
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Inflation Or Deflation? – Who Cares!
There would not be many investors who could say that! But smart investors in precious metals with carefully picked coins can gain a degree of protection in both inflationary and deflationary times. How?
By purchasing coins that are made from Gold, Silver AND Copper which have a legal tender value, you are covered both ways.
Here are some examples: Here in Australia, The Royal Australian Mint put out a series of gold collectors coins with a face value of $200 each. They are classified as “Non-Circulating Legal Tender” and can be deposited at any bank for their face value. For years these coins contained way under $200 worth of gold but could always be cashed in at face. Currently with gold at $Au 950 per ounce the gold value of these coins (10 grams / 22 Carat) is around $280. Now if you believe that there is going to be a huge amount of inflation, as gold rises so does the value of your investment. But if there is a huge depression and “Cash is King” you are also covered by the legal tender value of the coin. For this strategy to work best, you need to buy bullion coins close to their legal tender value. Here in Australia there is plenty of these type of coins available including:
Gold $200 coin (buy for $280)
Silver $10 coin (buy for as little as $12)
In the U.SA there is a huge opportunity (arbitrage even) with your pre 82 Copper cents (pennies).
But it does not really matter what country you are in, with a little bit of research, I’m sure that there will be coins available in all 3 bullion metals.
There would not be many (if any) other investments that cover your bets both ways!
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 01/03/2008 : 07:07:34
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Nice post man. Like the comparison.
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 01/03/2008 : 07:12:44
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Wow! I wish the US had something like those gold and silver coins at close to face value. I would be all over them. Instead we have the 1 Ounce Gold Eagle with a face value of $50 and the 1 Ounce Silver Eagle with a face value of $1. Not much deflation protection there...
I guess that I will have to stick to pennies and nickels as my "safe no matter what" investments.
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Edited by - horgad on 01/03/2008 07:14:45 |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 01/03/2008 : 08:21:08
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| With the weak U.S. dollar such Australian coins might still be a good buy for Americans. One could always convert the money over to the U.S. dollar if desired. Any Canadian gold or silver bullion coins with high face values? |
Realcent.forumco.com disclosure. Please read.
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Think positive. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 01/03/2008 : 17:05:45
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"Any Canadian gold or silver bullion coins with high face values?"
The Canadian one ounce maple leaf has a face value of $50, though much like the American gold eagle there is not much deflation protection. |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 01/03/2008 : 17:58:26
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quote:
Originally posted by pencilvanian
"Any Canadian gold or silver bullion coins with high face values?"
The Canadian one ounce maple leaf has a face value of $50, though much like the American gold eagle there is not much deflation protection.
I know that the once ounce silver maple leaf has a $5.00 face value. Better than the $1.00 silver eagle but it too doesn't offer much deflation protection.
It makes me wonder why the GoverMints don't offer a higer face on their "bullion" coins? What would they have to lose since they sure don't mind printing paper money? |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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copperbullion
Penny Pincher Member
Australia
136 Posts |
Posted - 01/04/2008 : 00:44:43
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| That’s a very good point. If they put a higher face value on those coins, they may even generate some extra sales. Even here in Australia, the current gold coins face values have been reduced. Fortunately they minted millions of the $200 gold coins and they are easy to get. |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 01/04/2008 : 07:29:13
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"What would they have to lose since they sure don't mind printing paper money?"
My guess would be that the government fears that they might accidently harm or compete with their fiat money system if the gold and silver coins reached face value or below. At face value, people might actually spend the gold and silver coins and maybe even begin to prefer using the gold and silver coins and maybe eventually demand more gold and silver coins. It would be a disaster.
Besides why would the government want to spend $8 dollars to sell a $10 silver coin, when there are enough people that are gullible enough to buy a $20 bill for $20 when it cost the government 10 cents to make?
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Crash
Penny Pincher Member
USA
155 Posts |
Posted - 01/04/2008 : 08:55:34
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quote:
Originally posted by horgad
[br
Besides why would the government want to spend $8 dollars to sell a $10 silver coin, when there are enough people that are gullible enough to buy a $20 bill for $20 when it cost the government 10 cents to make?
I agree, but the government doesn't mind spending $.10 to make a $.05 coin. If the U.S. ever minted a coin like those Aussie's, I would snap them up as soon as they hit. |
Edited by - Crash on 01/04/2008 14:45:03 |
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fiatboy
Administrator
912 Posts |
Posted - 01/04/2008 : 13:46:40
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| In the long run, paper money costs more than coins, because paper wears out faster and must be replaced. Coins can circulate for decades and decades. Paper can't. |
"Bart, it's not about how many stocks you have, it's about how much copper wire you can get out of the building." --- Homer Simpson |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 01/04/2008 : 13:58:39
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quote:
Originally posted by fiatboy
In the long run, paper money costs more than coins, because paper wears out faster and must be replaced. Coins can circulate for decades and decades. Paper can't.
Good point, but I imagine that only holds true when they are not making coins that contain close to face value in metals. Still, it makes you wonder why they don't make $20 and $100 coins using 10 cents worth of metals and eliminate the paper all together. I guess maybe the coins would be easier to copy? |
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n/a
deleted
4 Posts |
Posted - 01/04/2008 : 15:13:29
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Canadian Olympic coins are legal tender in Canada. The coins from the '76 Olympics come in two denominations; $10, which contains 1.44 ounces of silver, and $5, which contains .72 ounces of silver. The coins from the '88 Olympics have a $20 face value and contain 1 ounce of silver.
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 01/04/2008 : 15:44:54
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quote:
Originally posted by Dragon36
Canadian Olympic coins are legal tender in Canada. The coins from the '76 Olympics come in two denominations; $10, which contains 1.44 ounces of silver, and $5, which contains .72 ounces of silver. The coins from the '88 Olympics have a $20 face value and contain 1 ounce of silver.
That is very interesting. I see the 88s selling on E-Bay for as little as 8% over face including shipping. So you can get $15.30 in silver and a built in floor of $20 Canadian for $22.40 US. The only way you lose big is if silver stays low, the Canadian dollar collapses against the US dollar, and the collectible value of the coins goes down.
On the other hand you make money if the Canadian dollar gets stronger or silver breaks $20 an ounce or the collectible value of the coin goes up. And in a deflation situation with silver falling the coin at the very least is $20 Canadian in cash. And cash is king during deflation. |
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copperbullion
Penny Pincher Member
Australia
136 Posts |
Posted - 01/04/2008 : 18:31:04
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Quote:
"Originally posted by fiatboy
In the long run, paper money costs more than coins, because paper wears out faster and must be replaced. Coins can circulate for decades and decades. Paper can't."
Here in Australia our notes are made of plastic! and they last for years and years.
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n/a
deleted
4 Posts |
Posted - 01/04/2008 : 18:49:44
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| Japan has a 100,000 yen coin that contains 20 grams of gold that can be bought for a small premium to the yen value. I would only buy certified coins of these for there are counterfeits. |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 01/04/2008 : 18:51:27
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quote:
Originally posted by Dragon36
Canadian Olympic coins are legal tender in Canada. The coins from the '76 Olympics come in two denominations; $10, which contains 1.44 ounces of silver, and $5, which contains .72 ounces of silver. The coins from the '88 Olympics have a $20 face value and contain 1 ounce of silver.
I use to own a set of the 76. I unloaded them during the 1979/80 run up of silver. As I recall though aren't they sterling silver? I could be wrong since it was a long time ago. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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n/a
deleted
4 Posts |
Posted - 01/04/2008 : 19:20:34
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| Yes, the '76s are .925 silver. The weights I gave were the actual silver weight. |
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fiatboy
Administrator
912 Posts |
Posted - 01/04/2008 : 19:44:55
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| There was a brief time in the early 90's when the silver bullion Canadian Maple Leaf coin actually circulated. The price of silver dropped below the face value. |
"Bart, it's not about how many stocks you have, it's about how much copper wire you can get out of the building." --- Homer Simpson |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 01/04/2008 : 20:13:18
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quote:
Originally posted by fiatboy
There was a brief time in the early 90's when the silver bullion Canadian Maple Leaf coin actually circulated. The price of silver dropped below the face value.
And I bet some people are kicking themselves for not hoarding them back then. Well, I expect some will do the same for not hoarding copper pennies/nickels now. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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fiatboy
Administrator
912 Posts |
Posted - 01/04/2008 : 20:30:57
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quote:
Here in Australia our notes are made of plastic! and they last for years and years.
I forgot about that. Many countries now use polymer notes. Last I heard, Hong Kong was set to be the next country to forego paper bills. (Amazingly, Hong Kong still has its own currency, even though it's merely a "special administrative region" of the PRC, and the Hong Kong Dollar's so-called "fixed" exchange rate with the U.S. Dollar is usually very favorable.)
I can't remember all the countries that use plastic notes, but I know I've seen the ones from Chile, Nepal, New Zealand, Singapore, Sri Lanka, Thailand, Indonesia, Vietnam, and Romania. I'm sure there are many, many other countries that use them, as well. Brazil, possibly.
It still makes more sense to switch to metal coins, but that's just me.  |
"Bart, it's not about how many stocks you have, it's about how much copper wire you can get out of the building." --- Homer Simpson |
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copperbullion
Penny Pincher Member
Australia
136 Posts |
Posted - 01/04/2008 : 23:47:58
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Some of the countries include:
Australia, Bangladesh, Brazil, Brunei, Chile, Hong Kong, Indonesia, Malaysia, Mexico, Nepal, New Zealand, Papua New Guinea, Romania, Singapore, Solomon Islands, Sri Lanka, Thailand, Vietnam, Samoa and Zambia. Countries that have issued commemorative banknotes in polymer include: The People's Republic of China, The Republic of China (Taiwan), Kuwait, Northern Ireland and Singapore. |
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n/a
deleted
86 Posts |
Posted - 01/24/2008 : 11:47:17
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Here's a good laugh:
You must be logged in to see this link.
Yaaa, I know this fake fiat currency is worthless, but I was hoping to liquidate some of it rather than using it for fire tinder. Everytime I show one to someone, some wouldn't even use it for TP, and some would want a few. It would make a great gag gift. It also gives a true understanding of "fiat" currency. Just asking for a little help for distribution or whatever, that's all. 
Other than that, Au & Ag is up today,yeeeaahh. And some of the mining stocks as well. |
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Know Common Cents
Penny Pincher Member
195 Posts |
Posted - 01/27/2008 : 10:57:26
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In the past few years, I've purchased 9 of the 1988 Canada Olympic $20 sets. When the spead between the US $ and the CDN $ was wider and/or the price of silver lower, I was able to pick these up for about $100 US. Of course, that's when I was also buying circulating CDN coins from a coin dealer for 50 cents US for each CDN $1 face. Lots of Cu and pure Ni in the bunches and I was in hog heaven. I made a couple of trips to Sault Ste Marie each year to cash in everything and even got to know couple of the tellers at the Royal Bank. They gladly accepted the silver sets with or without the velvet case and gave me CDN $200 for them. I did get stopped at the CDN border once and they decided to look in my trunk. (Car was probably riding too low as I had over CDN $1000 in low denomination coins, old $1 and $2 banknotes and several silver sets.) After a thorough check on me and my vehicle along with a multi-border guard conference about the "dangers" of bringing Canadian coins back across the border into Canada, I was granter permission to enter.
My days of great deals like this are just about over now, but it certainly was fun and profitable. |
Here in Wisconsin, we have some of the highest property and gasoline taxes in the US. We're squeezed so much, I have to make my daughter wear penny boxes for shoes. At least she has an endless supply. |
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Art Tatum
Penny Collector Member
USA
400 Posts |
Posted - 02/02/2008 : 11:00:43
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| The above post is interesting. What is the alternative? what will you do now? |
my machine is running! |
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Inflation Or Deflation? – Who Cares!
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