Dear Mr. Rawles:
I have read your excellent blog for years and truly enjoy the unique mix of practical advice and news you provide that is not often found elsewhere.
I wanted to comment on your recent article titled, "Precious Metals–When to Begin Reducing Your Holdings." Your article was quite thoughtful and I would encourage anyone who failed to read it when originally posted on March 29th to go back and read it now.
There was a minor point that I did disagree with. Near the end of the article you wrote, "Here in the United States, pre-1965 silver quarters (25 cent pieces) are the ideal coins for barter." As of March 31st, the spot price for silver was $37.62 per ounce, giving pre-1965 US silver coinage a value of 27.2 times over face. At this rate, a 90% silver US quarter is worth $6.80. At "your interim target of $41.90 per ounce," a 90% silver quarter would be worth $7.58. At $50.00 per ounce (which I believe we will see by the end of January, 2012), a 90% silver quarter would be worth $9.04. When buying a dozen eggs or other small purchases, I think the quarter is too valuable. Of course in a post-SHTF barter economy, the market will determine price.
I do think that the dime would be a better choice for the ideal 90% silver coin for barter. It is currently worth $2.72 and would be worth $3.03 and $3.62 respectively, at the spot prices mentioned above I do own 90% silver quarters, but I have at least ten times that amount in dimes.
Sincerely, – Dean R. in Alaska
JWR Replies: Your logic is sound. However, silver dimes are typically worn much more heavily than quarters and half dollars. Have you ever stacked 100 typical circulated "junk" silver dimes, and stood them next a stack of uncirculated dimes? The circulated stack will often be 10 or 12 millimeters shorter! That is how heavily-worn dimes get. That may not sound like much, but when you buy a $1,000 face value bag and receive only 660 to 680 ounces of silver instead of the nominal 715 ounces, you will feel cheated.
If and when it comes time to do some serious barter, I believe that heavily-worn dimes will trade at a discount. Therefore, I buy quarters rather than dimes, unless I can find dimes that exhibit minimal wear. (This usually means getting all Roosevelt dimes rather than the older Mercury dimes.)