Orion
7th February 2011, 12:00 AM
(note: 'junk silver' is pejorative, as fiat money is the junk, therefore I have abstained form using it)
Aristotle, in Politika, enumerated four criteria for money: that it be durable, portable, fungible, and intrinsically valuable. Needless to say, the physical properties of silver make it durable, portable, and intrinsically valuable. However, fungibility is something that should be addressed:
If I were to present to a coin dealer a rock, claiming that it had one ounce of silver inside of it, I would be laughed out. In the context of barter, a coin that is not known to be silver may as well be that same rock, and subject to at best a risk premium, or at worst non-acceptance. In such a scenario, I would know precisely how much silver is within the coin, and can assure the other party of its value. The seller, on the other hand, is concerned with not only whether the coin is as described, but also whether it is fake, and whether he can turn around and spend it with someone else i.e. whether it is fungible.
My concern about 90% coin silver, especially for Washington quarters and Roosevelt dimes, and to a lesser extent Kennedy halves, as with other coins is that they are not necessarily known to contain a set quantity of silver. This is what make coin silver with both weight and purity printed upon it, or even purity alone, superior. The coin can be put upon a scale, and the weight can be multiplied by the purity in order to calculate the quantity of silver within the coin. Having the weight printed upon the coin will make it even more fungible, as it helps to verify authenticity when the coin weighs within a few percent of what it is supposed to.
Numerous Latin countries minted silver with both weight and purity upon their coins, but the most common that I have found are those of Panama and Venezuela. Panama minted their coins to the same standards as those of the US, even adopting 40% halves and base metal coinage at the same time. Venezuela was a member of the Latin Monetary Union, and thus minted their coins to the same standards as those of France. One silver bolivar is about 5 grams of 83,5% silver, or 0,1342 troz AGW, and ¼, ½, 1, 2, and 5 bolivar coins were minted to this standard, thus making them an alternative to other, more expensive fractional silver bullion.
With that, here is the kind of coin silver I am holding, save for a few Mercury dimes:
http://img197.imageshack.us/img197/3764/dsc02039.png
Aristotle, in Politika, enumerated four criteria for money: that it be durable, portable, fungible, and intrinsically valuable. Needless to say, the physical properties of silver make it durable, portable, and intrinsically valuable. However, fungibility is something that should be addressed:
If I were to present to a coin dealer a rock, claiming that it had one ounce of silver inside of it, I would be laughed out. In the context of barter, a coin that is not known to be silver may as well be that same rock, and subject to at best a risk premium, or at worst non-acceptance. In such a scenario, I would know precisely how much silver is within the coin, and can assure the other party of its value. The seller, on the other hand, is concerned with not only whether the coin is as described, but also whether it is fake, and whether he can turn around and spend it with someone else i.e. whether it is fungible.
My concern about 90% coin silver, especially for Washington quarters and Roosevelt dimes, and to a lesser extent Kennedy halves, as with other coins is that they are not necessarily known to contain a set quantity of silver. This is what make coin silver with both weight and purity printed upon it, or even purity alone, superior. The coin can be put upon a scale, and the weight can be multiplied by the purity in order to calculate the quantity of silver within the coin. Having the weight printed upon the coin will make it even more fungible, as it helps to verify authenticity when the coin weighs within a few percent of what it is supposed to.
Numerous Latin countries minted silver with both weight and purity upon their coins, but the most common that I have found are those of Panama and Venezuela. Panama minted their coins to the same standards as those of the US, even adopting 40% halves and base metal coinage at the same time. Venezuela was a member of the Latin Monetary Union, and thus minted their coins to the same standards as those of France. One silver bolivar is about 5 grams of 83,5% silver, or 0,1342 troz AGW, and ¼, ½, 1, 2, and 5 bolivar coins were minted to this standard, thus making them an alternative to other, more expensive fractional silver bullion.
With that, here is the kind of coin silver I am holding, save for a few Mercury dimes:
http://img197.imageshack.us/img197/3764/dsc02039.png