Did you know that there are millions upon millions of silver coins that are still present in the United States? That's right. Decades after the US government announced that it was no longer making silver coins, many Americans still have silver coins in their possession. Either they have it as family heirlooms, or they just have it lying around the house. Millions upon millions of Americans still have silver coins. You probably already know that silver is quite an expensive precious metal. In fact, silver has been going up in value in the past decade. Put two and two together, it's understandable people get excited about scooping up all this loose silver coinage in the United States so that they can sell it for a very high price. Well, don't get ahead of yourself. While these silver coins may have value, most of them have value only because of the fact that they have silver in them. That's right. They only have value because of their precious metal content. They don't have value in terms of collectors value. Why? Most are junk silver coins. Keep the following discussions in mind to help you decide whether you should invest in junk silver coins or not.
[Read More: Why You Have to Consider Silver in Your Portfolio]
Back when money was invented, the biggest problem governments have with establishing a form of money or form of currency is trust. People would not trust a government that issued coinage or paper money that had no real value. Back in those days, government cannot just put magical wording on a piece of paper and say, "this paper has value because we say so." People would think the government is bankrupt and would not use that paper money. Similarly with coins, they would not use any type of coin. The coin must have a certain amount of value even if it's a copper coin. Since copper is an industrial metal that can be used to create other things, the coins have value. This is why for the longest part of history, people used money in the form of coins that are either made of industrial metals or precious metals. The traditional value of coins then, turned on how much metal it contains that has a specific value. The big deal about gold coins is that for the longest time, human beings from all corners of the globe agreed that gold has value. Whether they use it for jewelry, or they use it to create art pieces or religious objects, they know that gold has value. This is why governments throughout history have made gold coins. There's a traditional value to these coins. The same goes with silver coins. The value it's understood is in the actual precious metal contained in those coins. Worst comes to worst, people would just melt down these coins and get that precious metal. That's what made these coins valuable. That's what made these coins legal instruments in trade and commerce. The problem with junk silver coins is that they are too traditional. In other words, their only value is in the value of metal they contain. They don't have any independent collectors value.
The main reason junk silver has no collectors value is the fact that it's in poor condition. Either it's worn down, it's heavily scratched, or its details have been blurred out. Coin collectors, the world over, collect coins based on their quality or their grade. The higher the grade of a particular coin, the higher its collectors value. High-grade coins are coins that have really clear lines. High-grade coins are coins that have a lot of detail. In other words, these coins are in mint condition. Mint condition means that they look exactly the way they looked when they got created by the mint that issued them. This is what it means to have a coin that is in mint condition. Unfortunately, junk silver coins are far from mint condition. In fact, they are either scuffed up, scratched, tarnished, or even have pieces cut out of them. These coins have no collectors value because they are in such a bad shape. Their only value is in the metal that they contain.
[Read More: 4 Kinds of Silver You Need to Consider]
The United States government has historically made silver coins that contain anywhere from thirty-five percent to ninety percent silver content. This is the historical range of the silver content put by the US government in their silver coins. Of course, as the years go by, the amount of silver in the coins decreased with time. There was a point in time that not only did the silver coins have ninety percent silver in them, gold coins have ninety percent gold as well. That's how rich the United States used to be. Not anymore. Since 1933, the US no longer issues gold coins. Since 1964, the United States no longer issues silver coins. Now, when you look at the US dollar or US coin, it just says legal tender. In other words, it has value because the US government can borrow money to give value to that money that you are holding. In a way, it's some sort of giant financial ponzi scheme. This should not be surprising to anybody who is paying attention to inflation. Thanks to the fact that there is really nothing of value holding up or guaranteeing the paper money or current metal coins we use, the value of this currency decreases with time. This is called inflation. The more money the US government prints, the lower the value of the existing money in circulation. Eventually, it would take a huge amount of money to buy the same stuff that that money was able to buy twenty, thirty years ago. That's how bad inflation is. This results in the price of silver increasing over time as it isn't affected by inflation the same way stocks and bonds may be. Junk silver can only protect you from inflation because of the fact that it contains thirty-five percent to ninety percent silver content.
If your silver coins that you got from all your relatives or your home or garage sales are graded fair or lower, you have junk silver. In other words, the only value you would get from that silver collection is to have it melted down, and you go to a metals dealer with that chunk of a pure silver in your hand. Otherwise, you''re not going to get much value from your junk silver. Junk silver is still junk.
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