Junk Silver: US Silver Eagle vs Junk Silver

Silver prices are going through the roof. Yesterday's price nearly touched $22 an ounce. That is leading many investors to consider purchasing silver to add to their portfolio.

For new investors, there are a number of options for first time silver investors - bullion, coins and junk silver.

Bullion is best described as silver ingots. Bars of silver minted and priced by weight.

Coins can be minted or common date, but let's consider coins to be government minted such as the US Silver Eagle. These are beautiful coins in one ounce denominations with a one dollar face value but are priced according to the latest spot silver prices.

Junk silver is common date US quarters, dimes and halves minted 1964 and earlier. Junk silver is priced by silver weight (90% of total weight) and listed as "face value". So ten dollars face value junk silver quarters would be 40 US quarters and priced at the 90% per ounce of the going spot silver price.

So which is preferrable? In my opinion, and I am not a professional investment councelor, but merely a collector, I would put my money on junk silver. Why?

- Junk silver has face value to the holder and the receiver. Everyone knows what a quarter or a dime is and what it is worth.

- Junk silver is portable. It is difficult to make change with a silver ingot.

- Junk silver is money even if silver prices drop. A junk silver quarter will always be worth twenty five cents at minimum.

- Junk silver will attract less attention. A Silver Eagle or bar might get the notice of the the wrong people; an old dime is an old dime.

- Junk silver is historic.

I love Silver Eagles. They are beautiful coins worthy of any investor or collector. Ingots are suitable for the safety deposit box or safe. But junk silver is my favorite for the practical and possibly, cash short investor, to get started with.

Junk Silver: Silver prices rising again

Silver prices are on the rise again making investments in junk silver a good option for the new silver investor.

Summer, 2008, silver rose to nearly $20.00 an ounce before sliding down to $9.00 in the fall. There was some indication that the economic problems with banks and housing may have precipitated the rise in precious metals like silver. However, as the political situation stabilized in the U.S. silver prices dropped.

Reality has set in; the financial situation, the falling value of the dollar and increased government deficit spending has renewed interest in silver and gold and the pricing shows it.

Kitco has spot silver just under $16.00 an ounce this morning. If prices go higher in the future, this might be a good time to invest in silver.

First time investors should consider the value of junk silver. Junk silver means pre-1964 U.S. common date coins such as quarters, halves and dimes. These coins contain 90% pure silver and what's more, they are commonly available to buyers.

Ebay, coin and specialty jewelry stores are good places to get junk silver. A good amount to start with is with a roll of Roosevelt or Mercury head dimes. Even if the price of silver drops to less than a dollar an ounce, dimes still have "face value". They are still worth ten cents and are legal tender for all purchases.

With an uncertain economy and a recession, it may be a good time to invest in precious metals - junk silver is a great way to start.

Junk Silver: Which U.S. coins contain silver?

Quick rundown for those new to collecting silver. Many are starting to look into their pocket change, change jars, piggy banks and purses for U.S. coins which contain real silver. Or maybe they have heard the term "junk silver" and want to know what it is all about.

Junk silver is used to describe older U.S. minted coins (and some Canadian) which contain a majority or percentage of their composition in silver. Many may not realize it, but today's coins are minted of copper, zinc and nickel. None minted today contain any precious metals like gold or silver.

What may be more surprising to many in the U.S. is that none of the money in circulation is backed by precious metals at all. Some still believe that United States currency is backed by gold in Fort Knox and other banks and while that may have been true many years ago, it is not the case today.

The United States stopped minting majority silver coins (90% in silver weight) after 1964. Often you will hear junk silver referred to as "pre-1964" which means it was minted that year and earlier. These coins have real silver value.

The United States minted coins in several denominations since its origins as a country. While many coins were minted for a short period of time, were odd denominations or had staggered intervals of acceptance, the U.S. minted several well known coins for many years.

If some older silver coins are in your possession, it might do you well to know what to look for.

Silver dollars; dollar coin - the U.S. had silver dollars only until 1921. After that, there were a few odd silver dollar coins until the Eisenhower coin was minted in the late sixties. The Eisenhower did have a brief run with 40% silver content.

Half dollars; fifty cent pieces, halves - the most popular junk silver coin in recent times. Found in the Franklin and Kennedy version, the half dollar has 90% real silver content. Only the 1964 Kennedy has 90% silver. 1965 to 1968 contain 40% silver content. Franklins used to be very common but are now rarely if ever seen in day to day transactions.

Quarter; quarter dollars; twenty five cent pieces; two bits - The Washington quarter has been minted in its current state since the 1920's. They are every bit as common as any other coin. All pre-1964 Washington quarters are 90% silver. Post-1964 quarters have only a trace amount of silver.

Dime; dimes; ten cent pieces - The dime, both the Roosevelt and earlier Mercury dime, contain 90% silver in pre-1964 years. The dimes are often found in change as they are nearly identical to the current dime minted post-1964. Junk silver dimes are a great find.

Other coins, nickels and pennies contain no silver with the exception of the "War Nickel". Minted during World War Two, these nickels contain 40% silver and can be found from time to time.

Anyone may have a hoard of junk silver coins waiting in their coin jar or ash tray at home. With silver constantly trading in the $10 to 12.00 range, it is worth your time to find some junk silver today.

Junk Silver: The incredible value of junk silver

Unlike "silver rounds" or even gold bars and bullion, junk silver has an advantage to the investor in these trying times.

Most precious metal investments are comprised of bars or coins. Bars are found in weights such as one, five or ten ounces. The bar is merely an acceptable means of trade and transport of gold or silver bullion.

The coins are usually a special pressing or mold with artistic or historical value for instance, to commemorate a person or event. You see these frequently advertised in magazines or on late night television.

The problem with precious metals in bar or coins is that their value is determined by the market rate for the metal at the time and that the buyer and seller agree upon their value. An educated consumer and merchant are required to give the bullion value.

Junk silver has both bar and coin beaten with one simple fact; junk silver comes in a face value coin which can be used for daily transactions at nearly any retail outlet.

Even if silver drops to a dollar an ounce, a 1964 dime will still be worth ten cents. A 1943 Washington quarter will still be worth twenty five cents and so forth.

A junk silver bag of quarters with a face value of $1000.00 will contain 4000 quarters. While the price of the bag may vary between 9 and 12,000.00 over the past couple of months due to the price of silver, the face value of each of those 4000 quarters is still twenty five cents.

This is a hard to beat fact about junk silver that other forms of precious metals are hard to beat. Junk silver keeps a value no matter what the silver market is running at the time.

And that is another reason junk silver is such a great investment.