Apr 27 2011 8:54AM

The average person can’t afford to buy gold, so it is most suitable for wealthy people for investment and central banks.

With silver being so much cheaper, the average person can go to his local coin dealer and buy some.

The advantages of silver over gold as an inflation hedge are numerous and need to be considered:

1. The silver market is much smaller, and it doesn’t take as much money moving into silver as an investment to move the market up. Silver has outperformed gold dramatically over the last few years, going from $3 an ounce to over $40 an ounce.
2. Silver is also a very important industrial metal with over 3,000 industrial uses.
3. The government has never seized silver, although they have seized gold. If that worries you (it doesn’t worry me much), you would feel safer with silver rather than gold.
4. The government actually has no stockpile of silver to unload. There is now more gold above ground than silver because of the silver industrial usage.
5. I look upon silver as money. Throughout history more silver has been used more for money than gold. Historically, silver coins became the common denominator for money in more places and more times than gold.

If you are wealthy and can afford to buy some gold, be my guest. I think you will do just fine. However, silver will outperform gold about three to one. When I receive income from my business, I set aside enough cash to take care of my normal business affairs because paper money is still a means of exchange, although it is no longer a store of value. As a means of exchange, you can conduct your normal affairs. If I have any left over, I go to my local coin dealer and buy silver.

What kind of silver should you buy?

There are American silver eagles, junk silver, and foreign silver coins that can be bought from any coin dealer, and they are also easy to sell. The price fluctuates not only daily, but hourly. So there is always a place you could sell it.

But why would you want to sell it if the government is still inflating the currency? Hang on to your silver.

How far will silver go? Darned if I know; that’s above my pay grade. All I know is that we are in a bull market, and we ain’t seen nothin yet.
I don’t expect it to retreat. When I buy silver, I am just buying another form of money that I believe will prevail over paper.

Where will you keep it? Any place that thieves won’t be able to find it or get to it. Concealment is probably the best strategy. I wouldn’t keep it in my bank safe-deposit box, just in case the government decided to change its position on silver. Right now, silver is just treated as another commodity.

The government is even manufacturing and selling silver coins. But they have no stockpile, so they have to buy on the open market just like you do.

There are more people in the world who can afford to buy some silver than can afford to buy gold; thus, smaller volume will move the market up and up, and up.

Who cares about that? I don’t care if it goes up. I won’t sell it any time soon. This bull market will not end until the world changes its attitudes towards paper money. There is no sign of that.

Some day you might want to give it to your children or build your estate for them to inherit it. They will thank you and call your name blessed.

By Howard Ruff
The Ruff Times

   

Contact: Steven Frank

Relation Systems, Inc.

Phone 262-317-5700

www.relation.com

Relation Systems

Press Release

Relation Systems Partners with J&T Coins to Enter

the Mobile App Market

Collaboration between local businesses results in free mobile app

for tracking financial data in real time

Pewaukee, WI, April 26 , 2011:

 

Leveraging vast experience in their respective fields, J&T Coins, LLC of Oconomowoc, Wisconsin and Relation Systems, Inc.

of Pewaukee, Wisconsin have partnered to create a free mobile web app that track a variety of financial data in real time.With today’s volatile economic circumstances, it has never been more important to stay on top of

financial news and information. With the launch of this app, users will be able to do just that, anytime, anywhere.

The application is free to the public and available at: http://m.jtcoins.com

Relation Systems, Inc., based in Pewaukee, Wisconsin, has provided systems integration,

networking and customer software development since 1994. Web and web-based mobile applications

have been a specialty of theirs for more than 15 years. www.relation.com

J & T Coins, LLC provides the convenience of a large selection of coins at your fingertips.

Collectors and investors can find a wide variety of gold, silver, platinum and palladium coins from our

inventory. www.jtcoins.com

Quick US Mint News Updates

By Jon Safer
Reason #1 – The Demand for Silver Is On The Rise

In the first two months of 2011, the US Mint sold as many dollars of silver as it did dollars of gold. The Chinese demand alone is up 20%. They now import 112 million ounces. That should tell you just how valuable silver is.

Reason #2 – Demand For Silver Is Up In The Technology Sector

Industrial production of silver was up by 18% in 2010. This was due to the demand for silver rising in the technology sector. More and more we are seeing silver being used in computers, cell phones and other electronic devices. The health care sector is also starting to use silver more because of its antibiotic properties. It is already being used in clothing and several medical devices.

Reason #3 – There Is A Shortage Of Silver

A shortage occurs when there is more demand then there is supply. Though there are millions of ounces of silver in the ground, there is currently not enough available in the market. The fact that it is taking two weeks for the silver to get minted proves that there is not enough inventory currently available.

Reason #4 – Too Much Paper Money In The Global Marketplace

The US Federal Reserve and central banks all over the world are still dealing with high debt. They are trying to fix it by pumping more and more paper money into the global marketplace. Because of this, the value of paper money will continue to decline and the value of gold and other hard assets will continue to rise. Since the Federal Reserve was established over 100 years ago, the dollar has been on a steady decline. It has lost over 90% of its value and it will continue to lose its value as time goes on. Because of this, the value of silver will continue to rise.

Reason #5 – We Are In A Financial Crisis

Inflation is often considered to be the main reason hard assets such as silver and gold rise in value. However, this is not always the case. Take for instance the 90′s when inflation was between 1% and 6% annually. During that time the price of silver and gold didn’t move very much. Why? Well because there was no demand. And there was no demand because during that time the US was experiencing a boom.

But right now, the US economy is not booming. In 2008 when everything seemed to collapse around us, investors realized there was a serious problem and opted to invest in safer assets such as silver and gold. So as more and more people start to realize that the Government can’t manage the current crisis, the price of silver will skyrocket.
Courtesy : EzineArticles.com

1928-S Key Peace Dollar in MS-65

By Paul M. Green, Numismatic News April 19, 2011

This article was originally printed in Numismatic News.
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There has been a great deal going on regarding the 1928-S Peace dollar, making it a date well worth examining. It tends to be a very tough date in top grades but a relatively available one in lower grades, an interesting combination.

In 1928 silver dollar production was finally winding down. The silver dollars melted under the provisions of the Pittman Act roughly a decade earlier had finally been replaced. It could not have come too early for the Mint as silver dollars were a historic pain in the neck. What were really needed were lower denominations.

The Morgan dollar had been another problem as required silver purchases each month had forced the facilities to make silver dollars far in excess of the numbers needed for circulation. The mintages of other denominations suffered.

The 1928 silver dollar from Philadelphia had a very low 360,649 mintage. Some in the West were actually using silver dollars and that may be why the 1928-S mintage was larger at 1,632,000 pieces.

2011 U.S. Coin Digest: Dollars Your best reference for the latest details and values for circulating and non-circulating dollars. Get your download today!

It certainly appears that the 1928-S reached circulation in some numbers as it is available in lower grades. The problem is whether many were saved in Mint State and whether any of those would qualify as MS-65 or better examples.

It appears that there was at least the normal saving of the 1928-S in Mint State, evidenced by its current MS-60 price of $155. That price, while higher than most available dates, does not put the 1928-S in the top few dates in that grade.

Things are a little different in MS-65. In the top grades, many dates from San Francisco including the 1928-S are tough. It appears that San Francisco simply had a difficult time making top quality Peace dollars. The proof is in the prices as the most expensive Peace dollars are all from San Francisco in MS-65.

Historically speaking, the 1928-S has basically been the key MS-65 Peace dollar, usually followed by the 1925-S. The price difference between the two has not been large. Back in the late 1990s, the 1928-S in MS-65 was $18,250 while the 1925-S was at $14,500. But something happened as today the 1928-S is at $24,850 while the 1925-S is at $25,000. The 1928-S is now behind the 1925-S in price.

Numismatic Guaranty Corporation, has seen a total of 41 examples of the 1925-S in MS-65 and just 31 of the 1928-S, suggesting that the current prices are possibly wrong at least when comparing the two. Professional Coin Grading Service has seen 29 examples of the 1925-S in MS-65 while the total for the 1928-S stands at 26.

Obviously when the totals are so close they could change any number of times depending on what coins are submitted in the next year. If you own a 1928-S, don’t panic as it remains one of the best Peace dollars in MS-65 and that is unlikely to change

Half Dollar Workhorse of Commems

By Paul M. Green, Numismatic News April 19, 2011

This article was originally printed in Numismatic News.
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There is an awful lot of history behind the classical commemorative coins of the United States that were struck starting in 1892 and ending in 1954. To collect them is fun, it is interesting and as a group they make a great collection and a great collection to study.

The idea for commemorative coins was hardly new even at the time the United States became a nation. The notion of using coins as a way of commemorating important events or of even announcing current events stretched all the way back to ancient times. In fact depicting important events on coins was reasonably commonplace. There were practical reason as any new emperor wanted his face on the coins being used to pay the troops that kept in him power. Important events would also be depicted by the imperial governments as anyone in power wanted to be sure they got the news out with their spin on the great events.

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In the case of the young United States, coins did not need to play such a large role. By 1776 there were new ways of communicating and the printing press was a major tool in informing the public. Instead of hoping they had enough money to look at a coin, a simple flier could be placed on a tree and get out all the information needed. Moreover, you could get a lot more information on a page than on a small coin.

Medals and tokens throughout American history might have served a role of sorts as the equivalent of the ancient coin when it came to making political statements, but American coins intended for circulation were generally free of political messages especially after some of the public objected to the chain reverse on the 1793 cent. After all, back in 1776 that chain reverse was symbolic of unity, but by 1793 it suddenly looked like chains of oppression to some.

The objection of George Washington and the House of Representatives to putting the President’s image on coins also probably played a role in keeping ideas for using U.S. coins in the old-fashioned way of the ancient Romans from ever getting a foothold on the first coins of the United States.

For many years there was no attempt at commemorative coins. There was a practical reason as the U.S. Mint was not up to task of even producing adequate numbers of regular coins much less commemoratives. Moreover the country was way too busy simply getting established, growing and then fighting a Civil War to commemorate anything.

It can be said that there was a commemorative of sorts in 1848 when the first gold of California was used to create 1,389 quarter eagles with “CAL” stamped above the eagle on the reverse. These $2.50 commemorative of sorts delivered a political message as in the eyes of President Polk and the Secretary of War W.L. Marcy the gold in California justified the war with Mexico, which had not been popular with everyone. That idea, however, did not spread.

By 1892, however, things were very different. The United States was stable and so was the Mint. The country was rich enough and ready for something different. The 400th anniversary of the discovery of America by Christopher Columbus provided a golden opportunity. Costa Rica even named its currency after Columbus, but that was a step too far for the United States. Simple commemorative coins would suffice.

The biggest coin-related problem at the time was that the Mint was strained by the required production of too many silver dollars and the great game played by some where silver dollars were swapped for gold coins, draining the American Treasury of the precious yellow metal and resulting in the silver dollars piling up in Treasury hands waiting for some commercial use.

The idea of having a special coin to help defray the costs of the Columbian Exposition in Chicago probably seemed to most like something that could do no harm, help a worthy cause and persuade the public to keeps some silver as souvenirs and thereby keeping out of the Treasury. As a result there was first the Columbian Exposition half dollar of 1892, which was joined in 1893 by the Isabella quarter at the request of the Board of Lady Managers of the Columbian Exposition.

The whole idea probably seemed simple enough. The Mint would make the coins, which would then be sold for face value to the sponsoring group like the Board of Lady Managers, who would in turn sell the coins to the public at a price above their face value, making a profit to use for their worthy cause. It would have been hard to find fault in that.

Of course, there was no track record on which to base decisions such as how many coins could actually be sold. There was also an immediate sign of potential problems in price as the Columbian exposition half dollar was to be sold for a dollar and that was also the price of the Isabella quarter. As there was no history no one could say having a half dollar and a quarter dollar at the same price was odd, but some could have certainly suggested that and the sale results would bear out the notion that people were seemingly much more willing to pay one dollar for a half dollar than for a quarter.

The large mintages of the Columbian Exposition half dollar, which was produced both in 1892 and 1893, probably did not help to convince collectors or anyone else at the time to pay one dollar for the coins. It would be a constant factor in the case of future commemoratives. If the entire mintage was not sold out, the coins frequently ended up selling for less than the official asking price from the group who had been allowed to do the marketing.

The Columbian Exposition half dollar was probably among the worst simply because it had such large mintages. There were 950,000 1892 coins and 1,550,405 of the 1893 pieces. These numbers look large even today.

What ended up happening was that banks and others ended up with the excess coins and they kept trickling out into circulation for years. That explains why so many Columbian Exposition half dollars now are found in circulated grades and why it took decades before the Columbian Exposition half dollar would command any sort of premium price from a collector as odds were pretty good that if you just waited and watched you could find one in circulation.

The Isabella quarter showed the potential for another outcome. The official sales total was just 24,000, but it appears that potentially half of the total ended up in the hands of just one buyer who happened to be on the Board of Lady Managers. Those coins ended up being sold in quantities sometimes for less than one-half the initial price.

The 1900 Lafayette silver dollar would follow and it had all the elements of the first two with some ending up in circulation while others ended up in hoards selling for less than their $2 issue price and even some 14,000 coins ended up back in the Treasury where they were melted in 1945. Simply put a commemorative in the early years might well have been more likely to end up being released any number of ways other than the one expected.

For many years there was no pattern to the commemorative program. Gold dollars were to follow the Columbian half dollar, the Isabella quarter and the Lafayette silver dollar. It was as if the Treasury was trying each denomination in turn. So with gold dollars there were some novel twists, with two dollars being made for the Louisiana Purchase in 1903 with one depicting Jefferson and the other McKinley while the Lewis and Clark dollars of 1904 and 1905 had the head of each explorer on one side making it a two-headed coin.

If anything, for a time it might have appeared that gold dollars would ultimately be the most regular commemorative issues as there would be other gold dollars, including one as part of the large Panama-Pacific program of 195 as well as other gold dollars for McKinley in 1916 and 1917 and Grant in 1922. In fact, there is reason to question why the gold dollar was not continued as a regular commemorative vehicle at least until the Gold Recall Order of 1933, which would have prevented any additional gold issues, but for gold $1 commemoratives, the Grant issue was the end of the line.

The answer to why it happened this way may lie behind the sales totals. In his book American Coin Treasures and Hoards, Q. David Bowers traces some of the hoards of commemoratives over the years and he points to the fact that in the case of the 1916 and 1917 McKinley gold dollars, which had a mintage of about 30,000, the actual sales were far less. Bowers estimates that approximately 10,000 of which more than half were 1917 were melted while Fort Worth, Texas, dealer B. Max Mehl ended up with an estimated 7,000 of the 1916 and 3,000 of the 1917. Bowers suggests other dealers also ended up with smaller amounts.

It might have been even worse in the case of the Grant dollar. The numbers are not really known, but Mehl figured in again according to Bowers, having thousands of Grant dollars. In the end, Bowers concludes, “Only a few were sold to the general public, and not many were sold to numismatists at the time of issue. Most were wholesaled to dealers, who parceled them out for a long period of time thereafter.”

It was not a case where other denominations like the half dollar experienced no problems. The half dollar reappeared in 1915 with the Panama-Pacific issue. The Lincoln-Illinois Centennial half dollars of 1918 had a large mintage, but according to Bowers “a Springfield, Ill., bank retained about 30,000 pieces until the ‘Bank Holiday’ of March 1933.” In fact, it appears that it took numismatic demand until the late 1930s to finally absorb all the leftover Illinois half dollars.

The situation might well have been one where the half dollar seemed like the least likely to cause problems and to produce something on the order of decent sales. The gold dollars did not sell and there is a strong possibility that no one back in the early 1920s wanted anything to do with additional silver dollars simply because they had become something of a political football first being melted by the 1918 Pittman Act and then being replaced in an emergency mintage starting in 1921.

Under the circumstances the half dollar might have simply been seen as the least likely to cause unexpected problems while still realizing some significant sales to the public. The Gold Recall Order of 1933 would later take any notions of additional gold coins off the table and that left the half dollar as the basic denomination for a commemorative.

In addition to sales and what might generally be descried as irregular marketing practices, the other major criticism of the early commemorative program is that there were too many designs. It is hard to argue with that as by the time the last coins of the original commemorative period were made in 1954 there had been over 150 different coins when you counted different dates, mints and other features such as small numbers of 1921 Alabama and Missouri half dollar with the state’s number in joining the Union added.

Perhaps as bad as too many was the fact that in an effort to increase revenues some programs had simply been allowed to stretch out for years. The Oregon Trail half dollar is the poster child for that abuse having started in 1926, it was finally terminated when Congress took action in 1939 to not allow any programs which had started before 1939 to continue.

That action stopped not only the Oregon Trail, but other programs as well. It had simply become a case where in all probability members of Congress would not oppose a commemorative as they might want their own program later and none had the time to monitor what was really going on as they probably barely had time to simply approve all the programs being proposed.

The problems became nearly legendary although it could be said that at least they were diverse. In the case of the Rhode Island half dollar of 1936 Bowers recounts, “Well-known dealer Horace M. Grant was in the middle of the distribution of this issue, which was fraught with phony news releases, made-up stories of the pieces being sold out within six hours of being put on sale etc.” Of course years later Bowers points out hundreds of sets would appear from a couple sources.

If the sales of the Rhode Island were phony, the whole idea behind the 1936 issue marking the 50th anniversary of Cincinnati as a music center might have been phony as there was no record of anyone designating the city as a music center back in the 1880s. The use of Stephen Foster on the obverse was equally suspicious as to the best of anyone’s knowledge any connection between Foster and Cincinnati was brief and not exactly critical to the development of American music. Equally suspicious was the high $7.75 price of a three-coin set, which set a record at the time and just where the profits actually ended up is uncertain. This was during a time when $7.75 was almost half a week’s wages for many people.

Where the profits ended up is one interesting question and where the coins ended up is another. In his book Bowers traces hoards of Oregon Trail half dollars, which in many cases ended up in the inventory of dealer Wayte Raymond. Others like the San Diego half dollar ended up in large hoards and in the case of the Iowa half dollar of 1946 the state still has over 500 examples that it hopes to sell in 2046.

If the whole thing seems almost comical as one issue after another seemed to vanish into thin air, the pressures to provide commemoratives to every group wanting them were very real and we still see today how such pressure can be exerted on Congress.

The modern commemorative programs were started in 1982 with a determined effort to limit issues and limit their size, yet somehow the 1995-1996 Atlanta Olympic program stretching out a couple years and involving 32 coins snuck through. When some issues sell out, such as the American Buffalo silver dollar, there are pressures to simply forget the congressional authorizations and make more so everyone can have a coin and the groups involved can have greater profits. These pressures are real today and they were equally real in the 1930s, although eventually in 1939 the Congress was able to at least stop programs from continuing indefinitely.

As it worked out, World War II and a series of Presidential vetoes or at least threats of them would also help to curb the growth of additional programs. That said, the programs approved such as the Booker T. Washington program which was followed the Booker T. Washington and George Washington Carver half dollars which lasted until 1954 still had the old problems of running for more than one year and having few coins really sell at the issue price.

The transition to the modern program was to take 28 years. It was as though the official view of commemoratives went from one extreme to the other. Initially there was no stopping the flood of issues and then in a complete turnabout there was basically no way to get even the most worthy programs approved.

To this day there has never been an official commemorative for the space program. The landing of men on the moon was marked only with the use of the Apollo 11 patch on the back of circulating dollars. The Bicentennial of the Declaration of Independence saw special reverses and dual dates on the quarter, half dollar and dollar, but everyone was very careful not to call them commemoratives.

Finally in 1982 the commemorative program returned, but at least initially everyone was very concerned that the program be kept under control to avoid the problems of the past. That has been more or less successful, although certainly the pressure remains to make more coins and make them for longer periods.

What should not be overlooked when it comes to the older commemoratives is that although there may not be rapid price movements or much attention on a regular basis from collectors, the commemoratives from before 1982 tell not only a fascinating story but they are fascinating coins.

There are some truly great designs like the Oregon Trail half dollars and a single Oregon Trail half dollar in MS-65 is currently around $200. While the Oregon Trail might be a universally popular design, almost everyone will find their own favorites as well as one or two they tend to not like. It’s a lot of fun and when you look at the mintages and prices you see that there are not many older commemoratives with a mintage of even 100,000. In fact, mintages under 50,000 are commonplace, but prices of more than $1,000 in mint state are not. The values are good, the stories are interesting and the opportunity remains to acquire a great collection at a great price. That combination makes historic commemoratives a great collection.

Look Who’s Touting Gold

By Patrick A. Heller April 19, 2011

It would be natural for those who make a living buying and selling gold to tout the ownership of the metal. It is much more unusual to see a survey, such as one released last Wednesday, where the ownership of gold is touted by professionals whom you might think would be the last to do so.

Before I tell you who they are, let me review some of the results of the survey. As you read these points, remember that this survey was conducted well before the upheaval in financial markets of the past couple of months.

Over 70 percent of those responding to this survey predicted that central banks will likely remain net buyers of gold reserves.

2011 U.S. Coin Digest: Gold Coins Your best reference for the latest details and values for circulating and non-circulating gold coins. Get your download today!

The number one reason given for this judgment was “gold’s traditional value as an inflation hedge and store of value.”

The survey respondents considered gold as a safe reserve asset.

Compared to the prior year survey, three categories of assets were considered more attractive than before: gold, investment grade corporate bonds and bonds rated AAA.

In contrast, compared to a year earlier, rising government debt and super-loose monetary policies by the world’s major central banks resulted in reduced confidence in more traditional reserve currencies (with the U.S. dollar being the prime example).

Among all survey respondents, 25 percent said that in the past year they had increased their percentage of assets held in non-traditional reserve currencies such as the Australia, Canada and Singapore dollars and Swedish crown. The China yuan was considered attractive, but interest was constrained by its poor liquidity and other investment hurdles.

Of the new bonds issued by the European Financial Stability Facility, the temporary rescue fund for weaker euro zone economies created last May, 81 percent of respondents consider them as attractive assets. The only drawback to these bonds was uncertainty about the secondary market liquidity of them.

Although U.S. Treasury debt was still considered a relatively safe asset “in the absence of a credible alternative” the second round of quantitative easing announced by the Federal Reserve after last November’s elections led to a shift of investments into shorter duration U.S. debt.

The largest loser in investment interest over the past year was the euro.

Here are some anecdotal comments made by some survey respondents.

“Traditionally, government bonds have been termed ‘risk-free’ assets but the euro zone situation has made some of us change our understanding of that.”

“Both the euro zone and the U.S. are confronted by large deficits with simultaneously modest growth, which has influenced the value of their currencies and raised questions about debt sustainability.”

Have you been able to identify the respondents to this survey?

The survey was conducted over the winter by Central Banking Publications, the publisher of the magazine Central Banking. The 39 respondents to this annual survey were the managers of reserve assets for central banks. The respondents to this survey manage $3.5 trillion of central bank reserves, about 35 percent of total global reserves. For the purposes of being able to manage their own nation’s reserve assets, these respondents have the strongest incentive to refuse to acknowledge gold as a safe haven asset.

Yet, despite their aversion to doing so, these same central bank reserve managers admitted that they like the prospects for gold and had a negative outlook for major currencies such as the U.S. dollar and euro.

The survey’s author, Nick Carver, stated, “Gold’s quality as a store of value and fears over reserve currencies are the main reason that central banks turned net buyers of bullion in 2010.”

This survey is reported at http://www.centralbanking.com/central-banking/news/2042937/central-bank-reserve-managers-recoil-sovereign-risk. Unfortunately, this is premium content that is only available to subscribers. This survey is also the first chapter in an annual book titled “Reserve Management Trends 2011” issued last Wednesday by the Royal Bank of Scotland.

Maybe you are skeptical about my having an inherent bias when I give you the reasons why you should own gold and silver as part of your assets. I can understand that skepticism. Instead, maybe you will accept a similar judgment from major financial managers who like gold’s prospects even though they are professionally loathe to admit this fact.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at CoinUpdate (http://www.coinupdate.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).

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