Here are the latest items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on the differences between numismatic and bullion coins. See the Precious Metals section and well as the Tangibles Investing section.
Precious Metals (Numismatic and Bullion Coins):
Anyone new to precious metals must learn the differences between numismatic and bullion coins. Both have their purposes, for investors and for preppers. The values of bullion coins are based almost entirely on their precious metals content. Their melt value is tracked in real time in the global markets, all in terms of troy ounces. In contrast, numismatic coins have both melt value and collector’s value. Judging the market value of bullion coins is simple arithmetic. But the prices numismatics are far more difficult to gauge. This takes study of rarity and relative values, study of the science of coin grading, study of standard annual references, and consultation of current rare coin market prices in detailed publications such as the Grey Sheet and Blue Sheet. There are many complexities that I won’t delve into here in this brief essay. Just suffice it to say, the word complex is an understatement. My general advice is that unless you are willing to do considerable study, then skip rare coins altogether, and only buy bullion coins or pre-1965 non-numismatic “junk” U.S. circulated silver coins.
I’m a believer bullion silver, in part because of its utility for barter. Secondarily, I’m a proponent of silver because it is presently undervalued versus gold. In the long term I am confident that silver will outperform gold. Its only drawback is its relatively high weight and bulk, per Dollar invested.
I also generally shy away from mint state (MS) numismatic coins, but I do own a few. And nearly all of those are graded only MS60 and MS61–which do not sell at large premiums above their melt value. I’ll leave the higher grades (MS-65 and above) to the advanced collectors. There, they might indeed find great gain, but such investments also carry substantial risk, since the rare coin market is notoriously fickle.
One parenthetical note, in closing: There are some who claim there could be a repeat of the Federal Gold Confiscation of 1933, which exempted numismatic coins. I would say the chances of that happening again are quite low for gold and almost nil for silver. But just in case, you should buy any bullion gold coins only with cash, to avoid leaving a paper trail.
Economy & Finance:
Tangibles Investing (Numismatic and Bullion Coins):
One key factor in investing in tangibles is assuring their authenticity. Nobody wants to take the risk of buying a fake coin. When it come to precious metals coins, the two approaches are: encapsulated and unencapsulated. Coins that are encapsulated (or “slabbed”) by the major coin grading firms such as NGC and PCGS are generally recognized as both authentic and of a guaranteed numeric grade. (From 1 to 70, on the Sheldon Scale.) This makes them popular with buyers who are looking for an investment, rather than as a personal collection.
Note that raw (unencapsulated) coins are preferred by some collectors. Some of these collectors hate slabs and pride themselves on cracking coins out of their sealed plastic encapsulation, especially if they believe that they’ve been under-graded.
In recent years, some clever fake bullion coins from China have hit the market. The best way to weed out these fakes is with a combination coin caliper/scale, called a Fisch. These are made in South Africa. In the past, Fisch Instruments has been a SurvivalBlog advertiser, and I highly recommend them. If you plan to stockpile just one type of unslabbed bullion coin, then you only need one variety of Fisch caliper. But most folks will want to have a full set, so that they can also check coins from other mints, and those of fractional weights. The Fisch calipers are less expensive to buy as sets. And they are inexpensive insurance. Even if your set of Fisch calipers protects you from buying just one fake 1/4 -ounce gold coin, it will more than pay for itself.
SurvivalBlog and its Editors are not paid investment counselors or advisers. So please see our Provisos page for our detailed disclaimers.
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often “get the scoop” on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!