• "Spreading the ideas of freedom loving people on matters regarding high finance, politics, constructionist Constitution, and mental masturbation of all types"

Silver Coin Premiums Soar: Signal "Alt-Money" Demand As Re-Opening Recovery Hype Fades

edsl48

Gold Member
Gold Chaser
Sr Site Supporter
Joined
Apr 2, 2010
Messages
3,192
Likes
6,324
#1
There are so many threads here on silver i didn't know which one to put it under. My experience with coinage is that the face value would provide a floor in times of a possible deflation. I have no idea myself thinking that there would have been a monumental collapse before now but the powers that be have successfully continued to kick the can down the road beyond my expectations.
DYOD



by Tyler Durden
Sat, 05/09/2020 - 11:00
TwitterFacebookRedditEmailPrint


Silver is the matrix of precious metals:
  • on the one hand, it is an industrial metal, critical to the production process in many of the world's most in-demand products;
  • and on the other hand, it has been 'money' for millennia, playing second-fiddle as a spending 'asset' relative to gold's 'wealth'.
The question is always, which of these demand/supply attributes is more prevalent at any one time.


Right now, is it the "blue pill" of blissful ignorance that an economic recovery is imminent and v-shaped; or is it the unpleasant truth of the "red pill" that this is the beginning of the end of the current system and a post-COVID world will look very different (and require protection).

Well, we may have the answer.
The price of silver coins is surging ('Monetary' demand) as futures prices sink ('industrial' demand), somewhat shunning the hope-filled hyping of stocks' recovery off the lows in March...

And in fact, this is the largest (physical) silver coin premium since Bernanke disappointed the markets in 2011 and since Lehman sent investors scrambling...


Additionally, the demand for "monetary" silver may be driven by the fact that it has never been cheaper relative to gold...
In ancient Greece during the age of Pericles, gold was valued at 14x silver. In ancient Rome, Julius Caesar valued gold at 12x silver.
It remained this way for centuries.
Even in the earliest days of the United States, eighteen centuries after Caesar, The Coinage Act of 1792 established a ratio of 15:1.
(According to the law, one US dollar is supposed to be 24.1 grams of silver, or 1.6 grams of gold. So those pieces of paper in your wallet are not dollars– they are technically “Federal Reserve Notes”.)
In modern times there is no longer a fixed ratio between gold and silver, though its long-term average over the last several decades has been between 50:1 and 80:1.
This is a lot higher than in ancient times… but the circumstances are obviously different.
Today, gold is still widely used as a reserve by central banks and governments around the world. And investors still buy gold as a hedge against inflation and uncertainty.
Silver, on the other hand, as we detailed above, has countless industrial applications; it’s a critical component in everything from mobile phones to automobiles to solar panels.
Like gold, silver is also a hedge against inflation and uncertainty.
But silver’s demand fundamentals are more heavily influenced by overall economic health. If the economy is in recession, silver prices can fall because there’s less demand from industry.
Gold, on the other hand, doesn’t follow that pattern. In 5 out of the last 6 recessions, in fact, gold has increased in price.
That’s why recessions, and extreme turmoil, can lead to a massive spike in the gold/silver ratio. Gold goes up, and silver stays flat (or falls).
  • Just prior to World War II as Hitler launched his invasion of Poland, the ratio spiked to 98:1.
  • In 1991 as the first Gulf War began, the ratio again reached 100:1.
  • Today we’re back again in that territory; as of this morning, the ratio is 110:1, and it’s been as high as 120 or more in recent weeks.

Source: MacroTrends.net
NEVER MISS THE NEWS THAT MATTERS MOST
ZEROHEDGE DIRECTLY TO YOUR INBOX
Receive a daily recap featuring a curated list of must-read stories.
This ratio may stay elevated for a while, or even go higher.
But in the past, the ratio has always returned to more traditional levels. Always. Even when the world was facing Adolf Hitler or the Great Depression.
So it stands to reason that, if they keep printing money (which they already are), and the ratio eventually returns to its historical range, the price of silver could really skyrocket.
...and it won't be due to the economy.
And in case you need more reassurance that the "recovery" is not coming anytime soon, Goldman's "re-opening" basket is significantly struggling to outperform.

Global silver demand nudged higher in 2019 thanks to a 12% increase in investment demand as retail and institutional investors focused their attention on the long-term investment appeal of the white metal according to a report highlighted in the latest edition of the Silver Institute’s Silver News.

According to the World Silver Survey 2020, total demand inched higher by 0.4% despite the trade war. Investment demand grew to 186 million ounces, the largest annual growth since 2015. Exchange-traded product holdings stood at 728.9 million ounces at year-end, up by 13%, achieving the largest annual rise since 2010. Meanwhile, silver mine supply fell for the fourth straight with output declining by 1%.
At its core, silver is a monetary metal. It tends to track with gold over time. And it has historically outperformed gold in a gold bull market./???
 

GOLDBRIX

God,Donald Trump,most in GIM2 I Trust. OTHERS-meh
Midas Member
Midas Supporter
Joined
Apr 4, 2010
Messages
14,967
Likes
20,612
#2
More Information on SILVER for the week of 5-11 to 5-17-20:
Silver Breakout in Progress - Stefan Gleason
Gold and silver markets are inching closer to embarking on new up-legs. Silver outperformed last week and appears to have the momentum behind it to lead a fresh precious metals breakout.
Silver prices will run into some overhead resistance just above the $16/oz level. Once broken, that technical line on the weekly chart could serve as a springboard for a run toward $19/oz – and ultimately higher.

1589730967161.png


Zooming in on the daily chart, silver is trading solidly above its 50-day moving average for the first time since late February, suggesting a breakout is indeed in progress.
1589731029950.png


DYODD,
Best of Luck, "Luck Favors the Prepared Mind".
 

Buck

Village Idiot
Midas Member
Site Supporter ++
Joined
Apr 13, 2011
Messages
12,785
Likes
13,466
#3
face value on silver coins isn't a 'basement' value, imho, it's only a method to determine the actual value which is the amount of silver it contains...

let's ask:
If silver went to zero, would anyone here begin to use their silver quarters to operate a horse-ride machine in front of the grocery store?

of course not...the face value is NOT a default number anymore
 

GOLDBRIX

God,Donald Trump,most in GIM2 I Trust. OTHERS-meh
Midas Member
Midas Supporter
Joined
Apr 4, 2010
Messages
14,967
Likes
20,612
#4
Dr. Marc Faber : How Is Silver $15 With Unlimited Fed QE.
Opinion on Silver's Modern History and Prices. Central Bank - It is easy to print money, but...:
 

EO 11110

CENSORSHIP KILLS
Mother Lode
Site Supporter ++
Joined
Jul 31, 2010
Messages
17,007
Likes
14,923
Location
clown world
#5
the real question is how has bullion performed relative to coins?
 

Buck

Village Idiot
Midas Member
Site Supporter ++
Joined
Apr 13, 2011
Messages
12,785
Likes
13,466
#6
selling coins: that variable will be within the realm of the coin being sold

morgans are between 20 and 25 for more 'full weight' coins, less for sliders
bullion ounce bars are between 21 and 25 per bar, based on vintage and manufacturer
(everyone loves monarch's)

but, commemorative dollars <18 to 21, are still cheap if you shop them, they're far cheaper than morgans or peaces but have the same percentage of silver, per coin, but few if any are worn at all, and that means they still contain the full silver amount...

that could mean a lot if your exit strategy involves someone with a scale...anyways

these are just base prices i've noticed...while spot hovered at 15 - 16
 

savvydon

Site Supporter
Site Supporter
Platinum Bling
Joined
Dec 14, 2010
Messages
3,745
Likes
4,009
#7
selling coins: that variable will be within the realm of the coin being sold

morgans are between 20 and 25 for more 'full weight' coins, less for sliders
bullion ounce bars are between 21 and 25 per bar, based on vintage and manufacturer
(everyone loves monarch's)

but, commemorative dollars <18 to 21, are still cheap if you shop them, they're far cheaper than morgans or peaces but have the same percentage of silver, per coin, but few if any are worn at all, and that means they still contain the full silver amount...

that could mean a lot if your exit strategy involves someone with a scale...anyways

these are just base prices i've noticed...while spot hovered at 15 - 16
Peace and Morgan dollars will cost one a premium over silver content for their 'cool factor'. That is, people like them because they were real money during a different time in our nations history. They directly reflect that history, whereas commemoratives merely echo a modern take on that history. As such commemoratives are less loved, and bring a lower premium. Therefore, during any major upswing in the price of silver bullion, they will present a greater possible upside, because they can be had for a lower premium.
 

Roger Ramjet

Lost in a Time Warp
Joined
Mar 30, 2020
Messages
170
Likes
346
Location
The Deep South
#8
Peace and Morgan dollars will cost one a premium over silver content for their 'cool factor'. That is, people like them because they were real money during a different time in our nations history. They directly reflect that history, whereas commemoratives merely echo a modern take on that history. As such commemoratives are less loved, and bring a lower premium. Therefore, during any major upswing in the price of silver bullion, they will present a greater possible upside, because they can be had for a lower premium.
I agree with what you're saying about the Morgans and Peace Ds. They're not a very good deal Ag wise, but very cool from another time. I'm filling one tube of BU Morgans and another of Peace Ds 1 per month to eventually hand over to my son and grandkids (if he'd get off his ass and get some in the pipeline - having too much fun I guess...) Been at it for about for about 2 years now and still have a ways to go but it'll get there!

RR
 

EO 11110

CENSORSHIP KILLS
Mother Lode
Site Supporter ++
Joined
Jul 31, 2010
Messages
17,007
Likes
14,923
Location
clown world
#9
how have premiums for junk performed over the last 15 years?

how have premiums for bullion performed over the last 15 years?

seems to me that junk premiums have far outperformed bullion premiums

imo, a conservative investor should have a mix -- who knows what the next 15 years will look like
 

edsl48

Gold Member
Gold Chaser
Sr Site Supporter
Joined
Apr 2, 2010
Messages
3,192
Likes
6,324
#10
how have premiums for junk performed over the last 15 years?

how have premiums for bullion performed over the last 15 years?

seems to me that junk premiums have far outperformed bullion premiums

imo, a conservative investor should have a mix -- who knows what the next 15 years will look like
I have some 100 oz bars purchased in the mid 1970s. The premiums back then, as is now, generally have, as you point out the lowest premiums. However I might assume that there would be an assay cost should I desire to sell the bars and that should be considered as well if deciding what to buy. Now I will say that perhaps this is not an issue with some of the newer bars put out by the various mints today. Back in the 70's bars were generally industrial castings and not the fine polished items of today.