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Nickelless
Administrator
USA
5580 Posts |
 Posted - 03/23/2008 : 01:51:35
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I've only got about a dozen Silver Eagles in my stash--the vast majority of my Ag is in Roosevelts and Washingtons--so I'm trying to imagine the logic behind 1-oz. .999 silver or gold coins whose face value is a mere fraction of their metallic value. At least pre-1965, wasn't the metal value in 90 percent Au coins roughly equivalent to their face value?
Figuring that to be approximately the case, according to Gresham's Law it's majorly schizophrenic for the feds to crank out both fiat coinage and gold and silver Eagles as legal tender. If the government wishes to debase our currency and coinage, why is it still offering silver and gold bullion coins as legal tender at about 1/20 of their metal value?
And on a related note, what idiot would think of using gold and silver Eagles as legal tender at face value? Help me figure this out, people...
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WilliamC
Penny Collector Member
USA
471 Posts |
Posted - 03/23/2008 : 06:15:56
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If you are talking about the currently produced gold and silver Eagles I was under the impression that they were solely for collection, and not for legal tender. As for getting them for 1/20th their metal value where is that? I can't buy them for anything except a good bit over spot value, not even directly from the US Mint. Do you know anyone who can?
As for using any gold/silver coins at their face value well that would require great ignorance on the part of the spender, but isn't that what we are starting to see with people spending pre-1982 pennies for 1 cent each? |
Sorting In Northwest Mississippi |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 03/23/2008 : 07:59:38
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| For many years the melt value of 90% coins was less than its face value. Silver was considered precious but not anything like it is today. I recall as a kid wondering why people didn't want silver coins instead of paper money. Copper and nickel coins are a lot like that today. With all the talk about copper and nickel most people don't consider holding on to coins made of such metals as worth the effort. |
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Think positive. |
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tmaring
Penny Collector Member
USA
302 Posts |
Posted - 03/23/2008 : 15:32:57
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| Putting a "face value" on the Eagle bullion coins is simply a marketing ploy. Because of the denomination it is technically termed a "coin". Many coin collectors will not collect bullion that is marked only with fineness and weight. Therefore by adding this to the coin they tap a larger market. It's a phony ploy to be sure... the discrepancy between face value and metal value makes it ludicrous... but it works. They sell more "coins" and that is the name of the game. |
Tom Maringer
Shire Post Mint
Springdale, Arkansas |
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 03/23/2008 : 20:40:00
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When I buy silver from my dealer he pulls out this large container with all different kinds of bars and rounds. I pick up the SAE's first because people seem to like them more, and all the bars/rounds cost the same. I just go with the flow....
Deal
p.s. For the record I'm a big fan of 90%.... |
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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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 03/23/2008 : 21:05:47
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Don't forget the reason why the US Government started selling gold bullion coins back in 1986-
It was to act as competition to gold Krugerrands and Maple Leafs.
Since the US Mint has always produced coins for sale with a face value, (commemorative halves in the 1930's, Panama Pacific Exposition gold, Louisiana Purchase Exposition gold 1903, etc.) bullion coins were assigned a face value. Much like the commemoratve coins, bullion coins were technically legal tender, though numismatic value made such coins worth more to collectors than as spendable money.
This is only a guess, but one reason for the introduction of the silver Eagle was to use up the silver reserve the US had back in the 1980's (just a guess on my part, no facts to support this.) |
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 03/24/2008 : 09:45:29
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| The low denominations are probablty there to protect the government. However, it could also be a view of what's to come. |
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tmaring
Penny Collector Member
USA
302 Posts |
Posted - 03/24/2008 : 10:51:59
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quote:
Originally posted by starwarsgeek171
The low denominations are probablty there to protect the government. However, it could also be a view of what's to come.
OOOH! Now that's an interesting thought! In other words... this is laying the groundwork for a (planned?) demonetization of paper currency! At that point only the holders of gold and silver (and copper!!!!) will have money. Hmmmm... Well... at least that sets a limit to how high the dollar can go... no more than 0.02 ounce of gold! Worth thinking about. |
Tom Maringer
Shire Post Mint
Springdale, Arkansas |
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Cody8404
Penny Hoarding Member
USA
602 Posts |
Posted - 03/24/2008 : 13:16:47
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Silver and Gold are great to trade with. These examples assume gold is worth $1,000 an ounce.
Someone is selling a car and is asking $1,000 for it.
I offer a 1 ounce Gold Eagle. He accepts. Now the selling price is $50 (face value of the Eagle). I take that to the county my taxes are based on a $50 sale instead of $1,000 sale.
We are all happy.
Some workers are asking to be paid in Gold Eagles. Again if my monthly income is $50 (gold) then Uncle Sam's share is much less than if I were paid $1,000 (Fiat currency). The IRS catch is that when you sell the gold they want 20% as this "investment" has paid the holder $950.
Also when price controls come people may be more willing to accept silver. For example a loaf of bread is worth $5. Uncle Sam tells the store it will be sold for $1. Low and behold there is no bread on the shelves for sale, but if I offer $1 Silver Eagle there might just be a miracle and they happened to have one loaf that was "lost" but now found.
I have learned that the price of a good sit down meal in the 2oth century has been about one silver dollar. I give each of my family a couple of dollars when they graduate and tell them to save this for a meal when the worst happens. I tell them that after a good meal and a good night's sleep the world takes on a much better view, and you are better able to plan what you are going to do.
There are a couple of reasons to have a little bit of Gold / Silver around with a low face value. |
Awake, O kings of the earth! Come ye, O, come ye, with your gold and your silver, to the help of my people, to the house of the daughters of Zion, to the help of the people of the God of this Land even Jesus Christ. |
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 03/24/2008 : 17:25:58
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quote:
Originally posted by Cody8404
Some workers are asking to be paid in Gold Eagles. Again if my monthly income is $50 (gold) then Uncle Sam's share is much less than if I were paid $1,000 (Fiat currency). The IRS catch is that when you sell the gold they want 20% as this "investment" has paid the holder $950.
I bet the company/person can only take a $50 deduction (if it was a deductible expense). The difference between their purchase price and $50 would be an investment loss.
I guess you would have to get an IRS ruling to verify though.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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Logic of fiat coinage and Au/Ag Eagles coexisting
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