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please help me on "Junk Coins"


punchy
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Hi all, I'm new to coins so please excuse the ignorance of my question.

 

I was wanting to ask some questions about so-called "junk silver". I was wanting to buy some for the silver bullion content only. How do these heavily circulated coins normally come in bulk? I'm interested in all denominations (dimes, quarters, half dollars, Morgan dollars, peace dollars, etc.). I see some advertised on the internet as bags, half bags and rolls. Can someone please educate me on which denominations come in which manner? What are the most standard ways to buy and sell each of these denominations on the marketplace? I also see that you can get them in mixed bags. Very confusing. How are these coins normally shipped using mail order? What is the best way to order them? Who has the cheapest prices? Who are some of the most reputable dealers for junk silver? Any help would be greatly appreciated.

 

Many thanks

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Junk silver could just easily mean damaged, worn, problematic silver coins which most people try to get rid of. They are more than happy to sell at slightly over sliver bullion value so you shouldn't really expect anything great in there. Chances are with shipping included, it kills any good bargain unless you go over to the seller's place to pick it up.

 

You might want to check out your nearest coin dealer if he has any junk silver that he is willing to let go.

 

Welcome to coinpeople by the way :ninja:

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Thing about "junk" silver is there normally is a fee on buying then a fee on selling. Silver bullion will normally be spot price plus a fee on buying. And spot paid on selling. Normally they come in set dollar amounts. Such as $1,000 dollar face value bags etc.

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Hmm, maybe when buying bulk junk silver I would be better off buying locally rather than mail order. I forgot about the weight issue of coins when ordering through the mail. Especially in the quantities I'd like to buy. Just out of curiosity, how much does a typical bag of junk silver weigh? How about a half bag? How about one roll of junk silver quarters? How about a roll of junk silver dimes? How about junk silver half dollars, peace and Morgan dollars?

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Hmm, maybe when buying bulk junk silver I would be better off buying locally rather than mail order. I forgot about the weight issue of coins when ordering through the mail. Especially in the quantities I'd like to buy. Just out of curiosity, how much does a typical bag of junk silver weigh? How about a half bag? How about one roll of junk silver quarters? How about a roll of junk silver dimes? How about junk silver half dollars, peace and Morgan dollars?

 

 

A $1000 bag face of "junk silver" is factored to have 712 oz of silver, or about 44 lbs. avoirdupois(standard pound) or about 60lbs troy. Silver is usually measured in Troy ounces, there are 12 troy oz to the troy pound. Usually when you buy these coins this way you are going to get a mix of dimes and quarters. If the seller likes you you might get halves, and even BU coins, but that is only if the seller likes you.

 

A $1000 bag of brand new silver coins would weigh 723.4 oz, but because of wear on circulation coins, it has generally been agreed that the standard is 712 oz. Believe me, when you buy these coins and get them you will find some of the older coins, the Barber coins and Standing Liberty Quarters will be heavily worn and account for the lower figure.

 

It is not often that you will find Peace or Morgans in the mix, unless they are damaged or heavily worn. Otherwise you will pay a premium for those coins. Generally when I want those coins, I buy them as a separate transaction so that I have nicer semi-collectible coins.

 

Right now a bag of silver at $1000 face would set you back about $8500.

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With junk silver, you are better off buying locally due to the weight and cost of shipping. Most dealers sell dimes and quarters for around the spot price (they buy for spot less a premium), some charge a premium for halves, and most charge more for silver dollars (they do contain more silver than $1 face in smaller denominations) plus there is usually more numismatic demand for dollars. To be honest, if you are just speculating on silver and want to buy in quantity, you'd be better off with 100 oz. bars.

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To be honest, if you are just speculating on silver and want to buy in quantity, you'd be better off with 100 oz. bars.

 

That said, 100 oz bars tuck into a safe deposit box much easier than a load of coins also. They don't have to be counted, etc. They are much more convenient if you want a quantity of silver. Go with a name brand bar, Royal Canadian Mint, Engelhard etc. and not some joeschoe name.

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Not quite on topic, but are only poor grades qualified as junk silver?

 

 

Most bags I've seen the coins are 40's 50's 60's in about vf range or worse. The ones earlier are holed, no dates, or barely readable date coins. A few may make it higher but normally like gx said problem coins.

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I'm sure this has been posted here before but it can't hurt to have it here again. This site tells you the metal value of US coins based upon the current silver prices.

 

Coinflation Values Info

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In past years, I would make a point of buying a roll of ASEs at the FUN show. Word would usually get around the floor pretty quickly on who had the best prices. I stopped a few years ago - budget constraints. I think I'll pick it up again this coming year.

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I've bought a roll of ASEs every year since 1990, and then went back and bought the 1986, 1987 and 1989, still need the 1988 for a complete roll set. As for junk silver, it really does change over time. Back in the 1980s, you could look through your dealers junk silver bins and still find Seated Liberty coins plus lots of Barbers, Standing Liberty Quarters, Walkers, Mercs and the newer stuff. But as time went by, those earlier coins were no longer considered junk! In another 20 years you might be lucky to find Franklins in the junk bins!

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ASE = American Silver Eagle (http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=American_Eagle_Silver_Proof)

 

BU = Brilliant Uncirculated = Very Pretty!

 

Can't tell you what the FUN show is, though.

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Can't remember what FUN stands for but it is a coin show. Supposedly a large one. As to collecting Silver junk coins. Not sure why people do that. If found out someone is melting coins for the Silver content, nice fine and possibly a jail sentence. Nice to have a Federal Offense on your permanent record. Just imaging attempting to go for a job any time in the future and you have a Federal Rap Sheet. As to buying junk Silver via the mail, the seller has to make a profit and the postage, as already stated, will make it even more. If you attempt to buy some from a local coin store, they too will charge quite a lot due to the cost of running a store. Insurance, electric, gas, water, phone, rent, equipment and then supporting a family. So buying Junk Silver is just not the best way to start out in this field unless your lucky and find someone that will sell it to you for less than it's worth.

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If found out someone is melting coins for the Silver content, nice fine and possibly a jail sentence. Nice to have a Federal Offense on your permanent record. Just imaging attempting to go for a job any time in the future and you have a Federal Rap Sheet.

 

 

Can you cite sources prohibiting the melting of silver coinage? Yes, the Secret Service branch of the Treasury Dept did enforce said back in the 1960's, but certainly not after the mid 1970's when it was deemed that the silver coinage was long since obsolete and no longer present in the monetary system. Lots and lots of silver coins were smelted in 1979-1980 when silver prices spiked. I have not heard of anyone even prosecuted for that.

 

Now maybe if you are hoarding up pre-1982 cents and all nickels presently you might be in for a knock at the door by the Feds because of the prohibition notice on melting of coinage issued in the Fall of last year regarding cents and nickels. But silver is not affected by that.

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^ Besides almost no smelting of "junk silver" goes on in the US these days. If you want to have silver smelted you now have to send it to Canada and the transportation costs certainly eat into any profit. Bags, rolls, etc. of old silver just trade the way they are. Some people go through them and take out what they want for their collections and then resell the silver. I can tell you I'd be happy to go through some old dimes and pick out the Mercs and Barbers that I need. AG-G is fine for my sets - in most cases.

 

If you're interested in silver in coin form and cheap vs. melt value - take a look for these types of coins. I have never been to a coin show where I could not buy the complete set of 76 Olympic coins for less than melt. Usuallly including a very nice case/chest of somekind.

 

Ebay sample auction of Canadian Silver 76 Olympic Set

 

This set is just a sample of what they look like. I haven't done the math on melt value. This is not my auction and I'm not recommending it. Any other disclaimers that may be appropriate are inserted here.

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The prohibition on melting US silver coins was rescinded in the early 1970s, once the coin shortage from the switch to clad had subsided. As mentioned, the only current prohibition is against the melting of cents and nickels (not just pre-1982, all cents are included, and I believe the nickels include the silver war nickels). I have probably 7,000 pre-1982 cents sitting right here, and since they are sitting in rolls and bags, I don't expect a knock on the door from the feds anytime soon.

 

Art is right on the cheapness of foreign silver, however there is a drawback in that they are less marketable in general (hence the discount). Any dealer can buy and wholesale junk US silver and make a slight profit, not so with .800 fine Canadian silver dollars or other foreign silver. The only exception might be foreign silver bullion coins, the problem there is that a lot sell for huge premiums to silver value (Australian, Canadian Maple Leaf etc.). The only exception I've found is the early Mexican silver onzas from 1982-85, I've seen those many times at shows selling for spot or even a little less, and they are simply 1-oz. of pure silver.

 

Also FUN stands for Florida United Numismatists.

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Thing is, chances are that when you buy junk coins, it's SO hard to even make a profit out of it even without tax. When you sell it, you usually sell it at 95% of it's bullion value at best, dealers will just buy 90% or worse depending on the dealers. Bullion coins on the other hand trend a lot better. Dealers give you about 95% of bullion value.

 

Thing is, if you are thinking of investing in silver coins, don't.

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The prohibition on melting US silver coins was rescinded in the early 1970s, once the coin shortage from the switch to clad had subsided. As mentioned, the only current prohibition is against the melting of cents and nickels (not just pre-1982, all cents are included, and I believe the nickels include the silver war nickels). I have probably 7,000 pre-1982 cents sitting right here, and since they are sitting in rolls and bags, I don't expect a knock on the door from the feds anytime soon

 

HMMM. I didn't remember that. No wonder so many jewelers are melting silver coins. There is a few places where they manufacture jewelery and it is a known fact they melt coins, watches, bracelets or anything they can get their hands on. Guess it is legal then.

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Little known, but a fact, that jewelers were responsible for melting gold coins after the 1933 prohibition, and selling them as scrap to the Treasury, at a handsome profit. Imagine buying a $20 piece for $20, melting it, changing the composition so that the Feds won't catch on to the .900 fineness and sense that it is melted coin, and selling it at $35 an oz.

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