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Silver Tiger
30th March 2008, 17:52
Hi, new member here!

I'm just getting started with silver bullion buying. Something immediately does not make much sense about 90% silver and that is the .715 constant.

To explain, if the current silver spot is 17.88/ounce. Then why is the constant for 90% silver not .9 x 17.88 per ounce?

To be more specific, why is the face value of the coins part of the formula at all? The amount shown on the coin itself would seem meaningless to me. It could say 1,000,000 dollars on it and I wouldn't care(assuming a dollar collapse). I would only care about the amount of silver the coin has.

So why not take 1 oz. of 90% junk silver and multiply it by .9 of the spot value to figure out the bullion content of the coins?

My only logical conclusion is that it would require constant counting or weighing of the coins. But the current formula requires counting the face value so I don't see much difference if you already know the weights of each coin before you begin.

Thanks for any help explaining this situation to my ignorant self.

:(

beach miner
30th March 2008, 18:25
Howdy: U.S. silver dollars--Morgans and Peace--weigh one U.S. ounce: 16oz to the pound. Silver is weighed in Troy ounces, 12oz. to our U.S. pound. 25% difference. Add to that--Silver dollars are 90% silver. To a smelter, a silver dollar is about 35% less than a Troy ounce bar or round. SILVER EAGLES ARE THE EXCEPTION. They are 1 Troy ounce .999 silver. Beautifully minted, and well worth the premium they command. However silver bars are good too if investing in bullion. See ya at the Top Beach Miner

Silver Tiger
30th March 2008, 18:40
The troy ounce part makes it somewhat clearer, but why is face value still used as part of the formula? I mean, surely a $1,000 face value bag of dimes would weight a different amount than a $1,000 face value bag of quarters or no?

Silvercaper
30th March 2008, 20:56
Silver Tiger:

There are 723 troy ounces of pure silver in a $1,000 face bag of uncirculated dimes or quarters. During circulation coins wear down over time. Due to the wear an average bag of $1,000 face bag of circulated dimes (10,000 dimes) or quarters (4,000 quarters) weigh approximately 715 troy ounces of pure silver.

An uncirculated silver dime weighs 2.5 grams and has .07234 total oz. pure silver. An uncirculated silver quarter being 2.5 times the value of a dime, likewise weighs 2.5 times the amount of a dime at 6.25 grams and has .18085 total oz. pure silver.

A clarification to what Beach Miner stated. A troy pound has 12 troy ounces.
An avoirdupois 16 ounce pound actually has 14.5833 troy ounces.

Silver Tiger
30th March 2008, 21:15
Thanks for clearing the math up for a newbie!

:p

goldminer
30th March 2008, 21:37
Every circulated 90 dime, quarter, and half-dollar is different. No two are alike and it's not feasible to be weighing every coin to see precisely how much the silver it contains is worth.

If your going to weigh the coins then your .9 multiplier would be correct.

Every circulated 90 dime, quarter, and half-dollar is different. No two are alike and it's not feasible to be weighing every coin to see precisely how much the silver it contains is worth.

When the price of silver went way up years ago, and folks realized that they couldn't be weighing all the coins, someone put together a bunch of $1000. face bags of dimes, quarters, & halves, and mixes of each. They then weighed each bag and found that the average weight of the bags was 715 oz. (or 8.4 oz. less then the coins originally contained).

The 715 number for "average" circulated coins has been widely accepted and used to trade these coins throughout the market.

There is probably an "average" weight circulated dime, quarter, and half-dollar coin out there but it will never be seen because no body knows what it looks like....and isn't going to waste their time trying to find one.

For simplicity sake the coins are traded by face value vs. actual weight. If you want to know the value of a lot of any 90% dimes, quarters, halves, or any combination thereof, just multiply .715 times the current spot price of silver. The answer will be the number that will determine the value of the silver contained in a proverbial "average" lot of the coins, when multiplied times the face value of the lot.

i.e. if the current spot price of an ounce of silver is (say) $18.15, then that number multipled times .715 will provide the multiplier that will be used to determine what the coins will trade at (their "melt value"). So $18.15 x .715 = 12.977 reports that any lot of "average" circulated coins will trade at 12.97 (or most often rounded off to 13) times the face value of the lot of coins.

A $10.50 face value lot of coins will trade at $136.50 ($10.50 x 13).

I believe that down the road when the price of silver is comparably through the roof, that the coins will trade by weight rather than face value, so it is important for a person who intends to hold a long time, to obtain coins with as little wear as possible = more silver. A good example of this is Roosevelt vs. Mercury dimes, and 1964 Kennedy &/or Franklin halves vs. Walking liberty halves.

Others will disagree with this because for certain reason(s) they prefer Mercury over Roosevelt dimes and prefer Walking Lib. Halves over Franklin or 1964 Kennedy's. Others don't care...they just want to "get the most silver" for their paper notes - which is fine, except if they are getting coins with more wear they are actually getting less silver.

You need to make your own call on this.

TTAZZMAN
30th March 2008, 22:07
to clairify

1$ worth of dime or quarters or Halves (pre64) when they are UNCIRCULATED weight the same (excepting fabrication errors)

1$ worth of dimes or quarters or Halves(pre64)
UNCIRCULATED contained .7234 troy ounces of silver
CIRCULATED is assumed to contain .715 troy ounces of silver average

The face value calculation is just a convienient way to describe their value
Spot price x .715=(x) (x) x (Face)= market value

You can easyly do it by weight but the weight must be either weighted in Troy ounces or converted to Troy ounces then multiplied by 90% then by the Spot price of silver
total weight in Troy ounces x .90 x spot price = Market value

JesterJay
30th March 2008, 22:42
I really hate the new math.
It was so much easier the old way!
JesterJay



to clairify

1$ worth of dime or quarters or Halves (pre64) when they are UNCIRCULATED weight the same (excepting fabrication errors)

1$ worth of dimes or quarters or Halves(pre64)
UNCIRCULATED contained .7234 troy ounces of silver
CIRCULATED is assumed to contain .715 troy ounces of silver average

The face value calculation is just a convienient way to describe their value
Spot price x .715=(x) (x) x (Face)= market value

You can easyly do it by weight but the weight must be either weighted in Troy ounces or converted to Troy ounces then multiplied by 90% then by the Spot price of silver
total weight in Troy ounces x .90 x spot price = Market value

TTAZZMAN
30th March 2008, 23:09
I really hate the new math.
It was so much easier the old way!
JesterJay

I liked it the old way also....when a silver quarter bought a gallon of gas...

gas...1964----.25 a gallon

hmmm that same silver quarter still buys a gallon of gas its just i hafta do the math and convert it to funny money to make the transaction.

gas....2008......3$ a gallon ....or 17.87 x .715 x .25= $3.19

JesterJay
31st March 2008, 19:14
The old math still works!
JesterJay



I liked it the old way also....when a silver quarter bought a gallon of gas...

gas...1964----.25 a gallon

hmmm that same silver quarter still buys a gallon of gas its just i hafta do the math and convert it to funny money to make the transaction.

gas....2008......3$ a gallon ....or 17.87 x .715 x .25= $3.19