Gold, Silver Survival Coins
When people discuss the ultimate “survival” coins available on the bullion market, the first and, oftentimes, the last coins mentioned are the pre-1965 90% silver coins. These coins ceased being the circulated coinage of the United States in 1965. From then on, instead, the nation used copper-clad “counterfeit” coins.
When he announced this transition, Lyndon B. Johnson assured the nation that the move did not betoken skyrocketing silver prices. He said:
The new dimes and the new quarters will contain no silver. They will be composites, with faces of the same alloy used in our 5-cent piece that is bonded to a core of pure copper. They will show a copper edge….All these new coins will be the same size and will bear the same designs as do their present counterparts. And they will fit all the parking meters and all the coin machines and will have the same monetary value as the present ones.
Now, all of you know these changes are necessary for a very simple reason–silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.
If we had not done so, we would have risked chronic coin shortages in the very near future. Some have asked whether our silver coins will disappear. The answer is very definitely-no.
Our present silver coins won’t disappear and they won’t even become rarities. We estimate that there are now 12 billion–I repeat, more than 12 billion silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins. Since the life of a silver coin is about 25 years, we expect our traditional silver coins to be with us in large numbers for a long, long time. If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.
There are certainly contradictions in the speech given by Lyndon B. Johnson, such as, although we are on the cusp of experiencing, in his own words, “a worldwide shortage of silver,” there is no reason to believe “our present silver coins won’t disappear and won’t become rarities.”
He goes onto say that there will be no profits realized in the keeping of the silver coinage. This statement has, over time, proven to be false. The old 90% coinage of the United States has stuck around, albeit not in formal public circulation. Instead, it has been transferred to the private sector, and is traded as “junk” silver, what many silver consumers believe to be the ultimate hyperinflation hedge, as it offers the holder the ability to divvy up in small fractions their wealth. The value of the silver in the coinage is more than 20-times its face value.
Whilst these old, circulated coins are a great option as a “survival” coin if one is anticipating having to barter for a short period, be sure not to shy away from modern U.S. minted 90% silver coins. All denominations are available: dimes, quarters, halves. A pure $1 in 90% face value—that is, mint-state quality, before wearing—contains .723 of an ounce of silver. The Precious Metals Industry, to be sure, assumes a certain degree of wear on the pre-1965 coins, and posits $1 as .715 of an ounce of silver. That means, per dollar face value, it is assumed .008 of one-ounce of silver have worn off. The modern 90% commemorative or proof coins do not have such wear, and so therefore contain almost always all .723 of an ounce of silver per $1.
When purchasing these modern 90% coins, make sure you are paying a reasonable premium over spot. In fact, for these coins, a dealer might be able to offer you the same price as the pre-1965 selections, with the lack of wear factored into the price.
The US Mint also produces modern commemorative silver dollar coins, which weigh in as constitutional dollars: 26.8 grams of silver. These are generally not very good choices when considering best survival coins or even investment coins. First of all, they come in bulky cases, they were never in circulation and so are not well-recognized, and they do not come with their silver content stamped on the coin.
A better solution would be the actual constitutional dollar, either in the form of Morgan or Peace Dollars. These contain roughly, depending on wear, .77 of an ounce of silver. These coins do, usually, come with a higher premium than most silver products due to historical aspects, but can often be bought at a reasonable price over the spot price of silver, especially when considering where the silver price is likely to go. The Morgan Silver Dollar was in circulation from 1878-1921 and the Peace Dollar from 1921-1935. Unless you cannot help yourself, don’t worry about the dates. First and foremost, worry about the wear on the coin, and be sure nobody has polished the coin to a cheesy looking shine.
Those interested in the ultimate barter items often look towards silver coins as their hedge, scant looking towards gold fractionals due to their high prices over the spot price of gold. Most gold fractionals come with high mintage costs. The logic goes that it costs more to produce ten one-tenth ounce Gold Eagles than it does to produce one one ounce Gold Eagle. There is a way out of this conundrum however, allowing those who are fearful of an economic collapse to hold gold at reasonable premiums in fractional form.
The 5$ commemorative minted by the US Mint offer Survival Person a small-denomination gold coin, thus allowing him or her to diversify if they are thinking we are heading towards a barter economy. These coins contain .24187 of an ounce of gold—that is, 8.359 grams—and have a diameter of just 18mm. These coins can be purchased at low premiums, offer diversification to the survival man or woman, and can take care of big-ticket items one might need taken care of in a barter situation, such as auto mechanic bills.