Are Bullion Coins Scams?

Good thoughts. I collect neat looking bullion coins. I think the value is much more than just the metal content. For instance I carry a coin with me all the time. I paid 30 for it because of the content. And my wife carries one with her for good luck.

I can see your point, @greenprint, and it seems to me that your question can be boiled down to: Why does anything have collector value? Why is anything valued for more than its purely functional value in terms of the metal content or the piece of cardboard?

I think that now we are getting into the fascinating issue of human psychology.

Humans (at least some humans) place value on esthetics (beauty), which would explain why a blank disk of silver is valued at less than the same stamped with a design.

Another thing is that people place value upon rarity-however it may be defined or decided. A different mint mark may be sufficient in the numismatic world.

Why people value beauty or rarity may not be based on logic, but if anyone has any ideas, please share.

I can't speak to the newer government silver issues, but the older issues have collector value to me because of the history that I can study related to the era. The rarity factor plays a big part too. Many collectors will strive to add the rarest matching specimen to the collection in order to complete... regardless

As for stacking metals, I prefer to stack junk silver, US mint issued ATB pucks, or silver eagles just because of the recognition factor. It'll generally be an easier sell than something the buyer has to test or question more extensively before committing to the transaction.

You can even take it a step further and wonder why 'precious' metals are actually so expensive per gram or troy ounce. If you look at the amount of gold available in this world versus, for example, palladium, there should be absolutely no reason why gold is at least twice the price per troy ounce: palladium is much more rare. Same goes for platinum: there's much more gold in this world, yet it's much more expensive per troy ounce. I guess there's a lot of psychology involved here.

To me, collecting bullion coins is actually both the pleasure of collecting and the assurance of having some back up in case I once need a sum of money for whatever reason. Not that I intend to, and if required I will certainly feel my heart break, but it's an option. Bullion will always have a certain value, because precious metals will keep a certain value due to being scarce in relation to demand. I have bought most of my bullion coins for about the bullion value at the time (and I still do) instead of an added numismatic value, meaning that my investment on average has grown faster than putting it in the bank. Nevertheless, having an ever growing, shiny collection of coins in precious metal is really a thrill in itself.

Talking about the numismatic value: I travel a lot and it seems to me that there's huge differences between the numismatic values of the same bullion coin, depending on where you buy or sell. For example, it's actually a lot cheaper to buy US bullion coins here in Europe than it is in the USA. :)

I'm currently in Iraq, where numismatics is currently very low on the list of hobbies. In fact, even circulation coins were abandoned as they proved very unpopular. What most places have for sale here, though, are Dubai made 22K 7.2 gram gold pieces, imitations of Turkish gold Lira coins. I found one person willing to sell one to me at slightly below bullion value, yet I still doubt. I'm into coin collecting and bullion coin collecting, not bullion collecting. The same guy tried to sell me a silver 25 Øre from Sweden (the only real coin he had) for $5, though (not in the next 100 years, buddy!). :)