Divisible Silver Premiums Drop

By Ryan Kirsch

After a dismal few years, silver is back. If you follow our publications, you may recall our mentions of the Gold-Silver Ratio (GSR), and how, once touching 80:1, the ratio usually corrects to a level between 35 and 50 with silver outperforming gold to the upside. As the top performing commodity thus far in 2016, silver gains exceed 20% as of the writing of this article… but, is now the time to buy? For junk silver, we believe the answer is a resounding YES.

U.S. dimes, quarters, and half dollars made prior to 1965 are commonly referred to as junk silver, but there’s nothing junky about them. They got that designation because they have no value to collectors beyond their silver content. But to us, they spell protection against inflation, eroding buying power and expensive premiums.

Junk silver coins contain 90% silver and are valued on their silver content. Each $1,000 face value bag of coins contains 715 ounces of PURE silver. Any reputable dealer will pay you accordingly, never needing to have these coins assayed for their silver content or appraised for their grade.

During the summer of 2015, when silver dipped to the $14 per ounce mark, there were severe shortages of junk silver across the country. After all, they can’t go back in time and make more. Premiums spiked to above 40%, astronomically high when compared to normal levels, and deliveries were delayed for eight weeks or longer as suppliers struggled to keep up with demand. In recent years, we’ve noticed premium spikes occurring more frequently, and each time, the “new normal” level continued to creep upward.

We believe the “new normal” for junk silver is approximately 16% over spot price, as supply is currently abundant and delivery times average two to three weeks. Premiums at this level still make junk silver typically cheaper than American Silver Eagles. And, when considering the added divisibility you get with junk silver dimes, quarters, and half dollars, the value is undeniably attractive.

The opportunity cost to own something other than paper dollars is already next to zero, considering that Negative Interest Rate Policy (NIRP) may be on the horizon. If the Fed decides to utilize all their options, you may well experience an unpleasant type of “new normal” …one in which banks charge depositors for the privilege of holding an account. The opportunity cost in such a scenario clearly favors holding a tangible asset over paper.

At that point, it may be too late to catch junk silver at normal levels, which is why we are pleased to offer you bags of junk silver at spot + $2.10.* But this deal won’t last forever, so be sure to buy today by calling us at 800-831-0007.

*Prices are subject to change due to market fluctuation and product availability. Offer expires April 20, 2016. Minimum purchase of $100 face value. Free shipping, handling and insurance for orders of $1,000 face value or more.