What's Happening To US Silver Eagles?
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sales&year=2011
Why? Here's what I think. Silver Bugs are starting to get SCARED about which format their physical silver is in. Not all Silver is created equal and as the price of silver rises the amount of FAKE SILVER coins and bars is naturally increasing. Back when silver traded for $5 an ounce there was not much of a worry. Oh, there were fakes out there but they were easy to resell because hardly any retail dealers checked for fraud.
Now we have $30/oz silver and a 100oz silver bar is worth $3,000 which makes it a lot more worth while to make silver plated lead or molybdenum bars. Yes, it happens and unless you know how to determine the purity of your silver YOU ARE AT RISK. Short of having your silver assayed I'd suggest doing the "Ping Test" which is demonstrated here:
http://www.silverbullionbars.eu/silver-bullion-bar/silver-bar-ping-test
Although each bar won't sound exactly the same, you will recognize the distinct high pitched "ping" of silver.
So why are US Eagles flying off the shelf? I think it's because it is much harder to produce quality fakes, the 1 oz format makes them more costly per oz to fake and US Silver Eagles are "denominated" as $1 US and thus fall under the more strict currency counterfeiting laws.
A few thoughts on this angle. Those who don't buy US Eagles because of the higher premiums over the price of silver you need to understand that premiums are added to both the buy and the sell side of the equation. For example, you may pay $3 over spot but you can also sell them for more than other 1 oz rounds.
So 1 oz US Silver Eagles, in my opinion, are one of the very BEST investment formats if you are investing in physical silver. Before you say it...that goes for pre-1965 silver coins also but many don't want to hassle with the silver content calculations.
Watch for the 1 oz Silver Eagles to continue to fly off the shelves in ever increasing numbers as more and more people start to get concerned about fake silver... ALSO this should lead to further delivery problems from the US Mint which will increase the price of Eagles even more!
We have worked too hard and long to be caught in the wrong form of silver when the rockets take off. Be safe...1oz rounds and coins with a penchant for US Silver Eagles and you will be properly positioned.
May the Road you choose be the Right Road.
Bix Weir
PS - Those of you wondering about silver mining stocks, ETF's and 401k silver need to read the Road to Roota ARCHIVES!
