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 Replies: 13 / Views: 1,712 |
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Valued Member
United States
98 Posts |
So, not being someone who invests in gold or silver, I know very little about US bullion coins. As I understand it, a bullion coin is minted specifically for the purpose of having physical gold or silver to trade as a commodity, but it also has a face value of $1, $5, $50, etc. My question, if they're not meant to be spent at face value, why give them a face value at all? A Silver Eagle is worth about $24 right now, yet could also be traded at its face value of $1, although it would be foolish to do so since it could be traded for its melt value of $24-ish. Is it so if silver prices happen to fall below $1 an ounce, the coin will still have value? I collect coins as a hobby for my own enjoyment, not as an investment, so forgive my ignorance on this matter.
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Pillar of the Community
United States
667 Posts |
My guess is that it give the coin legal tender status.
Edited by mkfarm
10/25/2010 6:45 pm
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Valued Member
United States
273 Posts |
Yeah, they have face values to give them legal tender status. But, if silver were to ever fall under $1, then you would likely see people spending silver eagles for $1.
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Valued Member
United States
487 Posts |
Syaoran, thanks for the question. I was wondering the same thing.
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Bedrock of the Community
United States
17884 Posts |
Quote:
My question, if they're not meant to be spent at face value, why give them a face value at all? Because if they don't have a face value coin collectors have a greatly reduced interest in them and they couldn't sell nearly as many of them. That was one of the reasons the gold art medalions flopped, and why collectors will pay a premium for silver eagles when they could get just as much silver for a much lower premium by just buying silver rounds. The silver roundsa aren't coins and the ASE is. |
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Valued Member
United States
426 Posts |
Agreed with Conder101. Just the fact the they have a face value gives them more of a "offical" and legitimate status that makes them much more appealing to the public than a general 1 oz silver round.
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Pillar of the Community
United States
1450 Posts |
In most other countries they don't have a face value on them. One problem with a face value is,in a legal transaction,do you use the face or bullion value? An example: there was an employer that was paying his employees in gold US 50 dollar face value coins. At tax time they reported the face value as their pay since that was the face value. The IRS didn't like that too much so the issue is in court but it is a slippery slope when you put a face value on a coin then try to tax its value.
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Bedrock of the Community
United States
10982 Posts |
Making them legal tender with a face value of $XX helps thwart counterfeiting also. They are legal U.S. coins subject to counterfeit enforcement by the U.S. government.
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Pillar of the Community
 United States
2448 Posts |
Like that's gonna stop them! Not to be an jerk, but if it didn't have a stated value, it wouldn't be a coin; just a round.
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Pillar of the Community
Canada
3692 Posts |
At what point do people stop and realize it's just an ounce of metal? Who cares how many dollars it says on it, besides the legitimate reasons above. A dollar isn't a thing anyways, it's an idea; a way to divide what used to already be money. The economy would have to be in amazing shape for the ASE for be worth a dollar. I wouldn't imagine spending it otherwise. |
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Valued Member
United States
273 Posts |
Quote:At what point do people stop and realize it's just an ounce of metal? Who cares how many dollars it says on it, besides the legitimate reasons above. A dollar isn't a thing anyways, it's an idea; a way to divide what used to already be money. The economy would have to be in amazing shape for the ASE for be worth a dollar. I wouldn't imagine spending it otherwise. The problem with that line of thinking is that for an ASE or it's ilk to actually be "just an ounce of metal," everyone would have to consider it just an ounce of metal. And that's not likely to happen any time soon. |
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Pillar of the Community
Canada
3692 Posts |
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Bedrock of the Community
United States
10982 Posts |
Quote:
Like that's gonna stop them! Not to be an jerk, but if it didn't have a stated value, it wouldn't be a coin; just a round.
That's the question though. Why do they need to be coins when nobody uses them as coins? They need to be coins to be subject to any type of counterfeit enforcement. They are not official U.S. government currency without a face value. So.....that's why they have a face value as coins. The original legislation in 1985 thought of this in advance and included it. |
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Pillar of the Community
United States
2448 Posts |
You are correct Brad, that was my second point, although I was rather terse. My apologies. You can prosecute the counterfeiter of valuable minted coins or priceless tokens; one is prosecuted by the US Government, one in civil court. You can't prosecute anyone for pounding out a chunk of precious metal. You can still charge over $1300 bucks for a .9999 fine Troy ounce of gold, you just can't put a $50 Gold Eagle label on it and call it an AGE. Just put the eagle on it and you can sell it all day for the same price as the eagle. No harm...no foul. My first point is still....we will never stop these counterfeiters regardless of what value is on the coin. For every one we catch, 5 emerge. No one has stepped in to deter the onslaught of Chinese counterfeits. The American dollar is still the most counterfeited currency in the world; remember what they found in Iraq; huge sums of counterfeit greenbacks. As long as there is value assigned to an object, counterfeiters will flourish. Maybe we should go back to using gold and silver dust. With the advent of all those neat little electronic scales and portable testing kits it would be easy to measure out the appropriate amount of precious metal for a loaf of bread and quart of milk. Now..buying a Buick or a House might be a problem. Guess we could also bring back the old "War Wagon" to replace wallets.  Edited by carmykle
10/28/2010 11:38 am
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Replies: 13 / Views: 1,712 |
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Posted 10/25/2010 7:30 pm
