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Junk Silver Market is Frozen

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Tags Financial MarketsGold StandardPrices

09/09/2015

Not sure what to make of this. The "junk silver" (90% used US silver coins) seems to have disappeared. After checking several websites that deal in such coins almost all categories (e.g. dimes, quarters, half dollars) have no inventory to sell. You can still buy bright and shiny versions of the coins at around a 20% premium over the silver value. The typical premium for junk silver is a few percentage points over the market value of the silver content.

The demand for junk silver has increased due to rising levels of economic uncertainty. The Greek crisis, the migrant invasion of Europe, the slow down in China, and rising debt levels are all contributing to this uncertainty. US junk silver coins are considered "lifeboat money" because they have an easily recognizable tangible value. With silver prices at multi-year lows, the quantity demanded is very high. However, those low prices also mean that most people are unwilling to sell their inventory to precious metal dealers.

 

 

Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.

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