Silver is for Barter
Now it is time to cover the importance and function of silver, the other precious metal. Some people call silver “the poor man’s gold,” because it is much more affordable per ounce than gold. Currently, in the summer of 2010, silver is almost $20 per ounce and gold is right around $1,250 per ounce. Silver is strictly for barter. Which are the best silver coins to buy for barter? They are the 90% United States silver coins, the dime, the quarter, and the half dollar that were minted in this country up until 1964. They are called “junk silver,” today, not because they are junk, but because some of these coins have quite a bit of wear, having been in circulation in the United States as legal tender up until 1964. After 1964, they were taken out of circulation and replaced with coins that had little intrinsic metal value.
Many people ask, how and when can I use these 90% silver coins for barter? After the dollar collapses and there is no currency to replace it if you need small food items like a gallon of milk or a loaf of bread, or a dozen eggs, these small denominated silver coins are ideal for these kinds of purchases. Say, for example, in our scenario, that after the dollar collapses, silver gets to $50 an ounce. All we need to do to calculate the value or the purchasing power of any one of these coins is to multiply the silver content of the coin times the value of silver per ounce. For example, the dime contains .07 of an ounce of silver, and if we multiply .07 times $50 an ounce, it equals $3.50. If a loaf of bread is $3 or $4, you could buy a loaf of bread with a dime. A quarter contains .18 an ounce of silver (0.18 times $50 is $9.00). A half-dollar contains .37 of an ounce of silver and would be worth $18.30. A silver dollar contains 0.78 an ounce of silver and would be worth $38.85.
If you want to buy silver online there are a few things you need to know. Look for someone who will help with the process, since it is a bit difficult due to the nature of gold and silver.
The next question is, how do I buy these silver coins? Junk silver or 90% silver coins are generally sold in what is called a $1,000 face-value bag. It is called a $1,000 face-value bag because if you add up the face values of all the coins in that bag, they would equal $1,000. For example, a bag of dimes contains 10,000 dimes, a $1,000 face-value bag of quarters contains 4,000 quarters, and a bag of half dollars contains 2,000 half dollars. A $1,000 face-value bag weighs 55 pounds and contains 715 ounces of silver.
If you can’t afford a whole bag then get a quarter bag ($250 face value) or a half bag ($500 face value). If you can’t afford either of those then any smaller amount of junk silver could be a lifesaver. Even if you have a few hundred dollars, buy some junk silver from a local coin shop. You will be glad you had it later. And you can use that simple mathematical formula that I gave above to determine a fair price for any given coin before you go to your local shop. A fair purchase price above spot silver would be anywhere from 5% to 20%. Armed with the formula you won’t get ripped off. Silver dollars are all right also, but generally, they are too expensive per ounce compared to junk silver, and they are a little too big for most small barter situations. I also don’t recommend one-ounce Silver Eagles or silver rounds either because they are a full ounce and are too big for most barter situations.