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cmdrstp
Valued Member
United States
88 Posts |
 Posted 11/02/2009 1:44 pm
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Why is there a one dollar "face value" placed on the American Silver Eagle when the intrinsic value of 1 ounce of silver is so much more? Why do they even put a face value on such precious metal coins?
Thank you.
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Edited by cmdrstp - 11/02/2009 1:46 pm |
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biokemist6
Pillar Of The Community
USA
4797 Posts |
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cmdrstp
Valued Member
United States
88 Posts |
Posted 11/02/2009 5:05 pm
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Thank you, biokemist6.
What are the offering from such as the Franklin Mint? Do they actually produce U.S. currency or simply resell what they buy?
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biokemist6
Pillar Of The Community
USA
4797 Posts |
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cmdrstp
Valued Member
United States
88 Posts |
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Sap
Moderator
Australia
4491 Posts |
Posted 11/02/2009 7:43 pm
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The face value of modern "bullion coins" is usually far below the actual bullion value because governments don't want to be forced into having to "buy back" large amounts of bullion coin at an inflated price if the bullion price falls. This is something some governments have learned about the hard way.
Silver is currently at $16.45/ounce. If the government put on the coin a "realistic" face value of, say, $15 or even $10, the minute the price of silver fell below that face value again, people would flood the banks with the things, and the banks would send them back to the government. The government would then have to either act as a silver speculator, holding the coins in the hope that the price goes back up again, or melting them down and re-issuing the silver as new coins with a lower face value, taking the loss.
With an extremely low face value, the government avoids this potential problem. If the price of silver were to ever fall below $1/ounce, I think the government would have a lot more to worry about than a few silver speculators cashing in their coins.
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There is nothing so absurd that some philosopher has not said it. - Cicero |
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cmdrstp
Valued Member
United States
88 Posts |
Posted 11/02/2009 8:14 pm
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Ah. Good explanation I really never considered.
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ratio411
Pillar Of The Community
USA
584 Posts |
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cmdrstp
Valued Member
United States
88 Posts |
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ratio411
Pillar Of The Community
USA
584 Posts |
Posted 11/02/2009 8:57 pm
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IMO?
Yes.
It was 18 bux when I bought my first Oz in 1981.
It was near 50 bux shortly thereafter.
It goes up, it goes down.
The trick is buying low and selling high, assuming
that is what you are worried about. Being a coin
collector though, I don't care. I buy what I need,
when I need it. It would be nice if the price was
way down when I needed silver coins, but it doesn't
work that way.
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cmdrstp
Valued Member
United States
88 Posts |
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ratio411
Pillar Of The Community
USA
584 Posts |
Posted 11/02/2009 9:11 pm
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Riddle me this:
When do you see commercials on TV touting the investment
qualities of Gold/Silver? (Mostly gold)
You don't see commercials trying to sell you gold until
the price is UP! When the price is down, you don't see
Gordon Liddy shouting "GOLD!" on TV.
When you see commercials wanting to sell precious metals,
that is the time NOT to buy. 
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cmdrstp
Valued Member
United States
88 Posts |
Posted 11/02/2009 9:39 pm
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"Buy your GOLD where I buy mine!"  .
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Edited by cmdrstp - 11/02/2009 9:47 pm |
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ratio411
Pillar Of The Community
USA
584 Posts |
Posted 11/03/2009 10:09 am
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You know they are making good money when they
can afford the retired Mint Director to shill
for their commercials! I'm sure ol' Gordon
doesn't come cheap either!
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XavierOfGreen
Pillar Of The Community
USA
647 Posts |
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DNA
Pillar Of The Community
United States
945 Posts |
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