Price for American Silver Eagles - why bid ask so wide?

[morganist]

There are advantages to holding silver physically....period....in a world of constant and relentless inflation it is a great store of wealth...if you can't keep.your silver safe , what else do you own that isn't safe?

True, most people will have other posession that are worth more than the silver they can store. Gold might be better because it is smaller and easier to hide. I wish the whole Jeweller stores option of trading collectable coins and spot price bullion would return to what it was. They used to be much better at people turning up and selling precious metals at something around spot, but that seems to have gone. They also used to be more involved in collectables and would pay a premium but that market seems to have gone apart from on the internet.

 

[cdcaveman]

I personally buy pre 33 us gold coins as they go very close to spot and I believe there is more upside potential then just bullion

 

[Ayn Rand]

Do not want silver as an investment. Just want to have some in case things really go South.

Several years ago I could get silver eagles for about $3 over spot. These coins appear to be in excellent condition. I considered that to be a reasonable premium.

As of late the going price for silver is $6 over the spot price.

At $22.91, a premium of $6 is about 26%. Way too much.

As an aside I did look at Facebook and some online offering for lower than $6 under. All of these got bad reviews.

In the past I would get silver eagles at Pawn Shops in my area. If silver falls a bit more I will bit the bullet and give them $6, especially if I can get 2020's. However, may try to bargain with cash.

 

[Sig]

So first off, do you know what you want or not? You started the thread with

I have wanted to diverse into silver for a long time.

but now its

Do not want silver as an investment. Just want to have some in case things really go South.

or what we call the wingnut rationale.

What, exactly, are you going to do with your silver coins when things "really go South"? Eat them when you run out of food? Throw them at the person about to beat your ass and take your stuff? If things "really go south" then food and safety are primary concerns and a round disk of metal doesn't get you either of those things and no-one is going to give you those things for a round disk of metal that serves no useful purpose. If you're really concerned about things "going South" then buy some freeze dried food and either a way to get away from your fellow humans or a way to defend yourself against them. You can't eat silver, or protect yourself with it, so if things really "go South" it will be absolutely worthless.

 

[Ayn Rand]

You are right. I did not describe things quite right.

When I used the word diversify I did not mean in a big way. I just wanted a little bit of silver on the side.

The thing that concerned me the most was the high premium on the buy side. How do sellers get $6 over spot? There are a few sellers that offer for less but in some cases there are problems. I much prefer to be able to go to an establishment so I can evaluate what I am getting.

$6 over spot is almost as bad as some credit cards charging +25%.

Again, you are right. If things get real bad silver may be of little value. However, in the initial stages of a severe downturn can be used to barter for this and than much better than "cash" you can not get out of your ATM

Things will get worse before they get better.

 

[tiddlywinks]

You can't eat silver, or protect yourself with it, so if things really "go South" it will be absolutely worthless.

"Absolutely worthless" is a bit of an exaggeration. But to that point, in that "gone South" world, value would dictated in your LOCAL black and barter markets, not (necessarily) the financial asset market prices. In which case, "junk" silver with obvious design differences compared to existing circulating coins may be a "better" choice. Perceived legal tender value may be more important than content value. Silver eagles are $1 USD legal tender, but a dated silver quarter/etc may be more readily accepted without much explanation. Just my thoughts on the subject.

 

[Sig]

The thing that concerned me the most was the high premium on the buy side. How do sellers get $6 over spot? There are a few sellers that offer for less but in some cases there are problems. I much prefer to be able to go to an establishment so I can evaluate what I am getting.

Again, how does your natural gas company get twice the Henry Hub spot price for natural gas when they deliver it to your house? How does the supermarket get 5X the price they paid the apple farmer for an apple? You would never expect to get the wholesale bulk spot price for something when you buy it in small amounts delivered to you or the town your live in. Someone's got to buy it it bulk, in the case of coins mint the coins, store them, transport them, pay the rent, pay salaries, pay insurance, pay utilities, pay for advertising, pay for shipping....in short it costs money to run a business even before you make a dollar in profit. So if a business is required to convert your notional portion of a silver futures contract into a silver coin delivered to your hand, and it most definitely is, then you're never going to get spot or even close.

If you were willing to buy 5,000 ounces and pick it up from a designated depository, you'll get wholesale prices. If you think the prices being charged are outrageous, then there's a spectacular opportunity there for you to buy 5,000 ounces and resell it an ounce at a time to make an outrageous profit.

 

[Sig]

"Absolutely worthless" is a bit of an exaggeration. But to that point, in that "gone South" world, value would dictated in your LOCAL black and barter markets, not (necessarily) the financial asset market prices. In which case, "junk" silver with obvious design differences compared to existing circulating coins may be a "better" choice. Perceived legal tender value may be more important than content value. Silver eagles are $1 USD legal tender, but a dated silver quarter/etc may be more readily accepted without much explanation. Just my thoughts on the subject.

I'd maintain that if the U.S. fails to the point that U.S. dollars are no longer accepted as currency, then it's failed to the point that we're in a world of hurt such that we care about food and safety and some completely arbitrary mineral, regardless of what's stamped on it, will have no utilitarian value and thus no value at all. It's certainly possible to have the world's largest economy catastrophically fail but not completely fail such that 4 silver quarters maintain value while a paper dollar has none, but among the universe of possibilities that's gotta be about 1 in a trillion and balancing on the edge of a knife at that.

 

[Cuddles]

I'd maintain that if the U.S. fails to the point that U.S. dollars are no longer accepted as currency, then it's failed to the point that we're in a world of hurt such that we care about food and safety and some completely arbitrary mineral, regardless of what's stamped on it, will have no utilitarian value and thus no value at all. It's certainly possible to have the world's largest economy catastrophically fail but not completely fail such that 4 silver quarters maintain value while a paper dollar has none, but among the universe of possibilities that's gotta be about 1 in a trillion and balancing on the edge of a knife at that.

In fairness, that scenario has happened in shithole countries around the world so I don't see why we'd be immune to it. The dollar value would have to stop being the world currency and the refugee crisis big enough to warrant other countries to accept silver as an acceptable payment from Americans.

 

[Sig]

In fairness, that scenario has happened in shithole countries around the world so I don't see why we'd be immune to it. The dollar value would have to stop being the world currency and the refugee crisis big enough to warrant other countries to accept silver as an acceptable payment from Americans.

Because they're shithole countries, not the world's reserve currency. If the world's reserve currency suddenly becomes worthless the worldwide impacts are monumental. If Zimbabwe's currency becomes worthless, not so much.