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Maybe this has been asked before.

But why are Canadian Maples and SAE set up as face value $1 even though they have one ounce of silver?

Seems like the governments should take the average silver price for the last several months and base the face value off of that.

I guess it is just more symbolic that they have a face value of $1?

Maybe the government wouldn't want to encourage them being used as "real money"?

Wishful thinking....... or if you ask the Bernanke he would probably say Tradition!

I think you've answered your own questions.

They are basing the face off of the historical norms, or near them. Face is just a number. If they jacked up the face value, then no one would buy them; they sell them for face plus the PM cost, so if they had a face of $40, then your ASEs would cost $80, etc.

Oh ok I didn't realize that technically they are selling for $1 above spot since they tack on the face value?

Pennysaved wrote:Oh ok I didn't realize that technically they are selling for $1 above spot since they tack on the face value?

Mint sells them for nominal prices, which are effectively amoratized production costs plus amount required to put them into circulation. That is part of the reason why they often carry a premium, but not always the whole story. 1 out of 40 is barely noticable for the ASEs at today's prices, but for the $50 AGEs, when gold was $400, it was a big deal, as they had to charge at least $450 for them, which was 12.5% premium then.

Actually, silver Maples have a $5 face value if that makes any difference to you

its just not practical to set them higher.

take a silver ounce. silver started the year where, $20? Then it got close to $50. What should the mint have sold these for in January? Spot plus $3? OK, then what face value do you put on them? $23? Well, it wasn't long before spot was over face value. I guess you could change the face value every year but then you would have a bunch of coins identical except for the year with very different face values.

When the Liberty dollar was in use, didn't they increase the face value to reflect the increase in bullion value?

I know the federal government has different goals than the makers of the liberty dollars.

Pennysaved wrote:When the Liberty dollar was in use, didn't they increase the face value to reflect the increase in bullion value?

I know the federal government has different goals than the makers of the liberty dollars.

No. The dollar was at a fixed ratio to gold back then. Bullion value didn't change. Thus the term "gold standard". The dollar was set at a nominal 1/20 ounce of gold, and $20 gold pieces had nearly an ounce of gold in them. (.96 and change, to account for coining and alloying)

Interestingly the modern liberties, even though they are technically "commemoratives", are set at exactly the same face value and proportion of gold as the old liberties.

(Further Edit)

I should have noted this above, but this also illustrates the debasement of the dollar. The current dollar, at $1600/oz, is worth about 1/80th of what it was prior to 1933.

And the actual number was set by statute at $20.67/oz, which was the real reason the $20 gold piece had .96 oz of gold in it. 20/20.67 = .96 (not carrying all the digits here, rounding, of course)

The dollar was then devalued during the New Deal (Gold Reserve Act of 1934) in order to create new monies. The gold dollar was devalued to 59.03 cents (effectively raising the price of gold from $20.67/oz to $35/oz). Then later, as the post-war global system began to unravel in the early 70s, it was further devalued, until it was pulled off the gold standard altogether in March 1973.

Nickelmeister wrote:Actually, silver Maples have a $5 face value if that makes any difference to you

I don't know if the Royal Mint actually charges on that $5 to the consumer like the US Mint does. I'm not motivated to hunt for that - anyone know?

The Canadian Mint had those $20 coins recently that had a higher face value than their metal content of ~1/4 oz ASW. They were sold at face value I think. Interesting idea (these days anyway) but I guess it would take a silver price of about $80 for the metal value to match the face value.

68Camaro wrote:

Pennysaved wrote:When the Liberty dollar was in use, didn't they increase the face value to reflect the increase in bullion value?

I know the federal government has different goals than the makers of the liberty dollars.

No. The dollar was at a fixed ratio to gold back then. Bullion value didn't change. Thus the term "gold standard". The dollar was set at a nominal 1/20 ounce of gold, and $20 gold pieces had nearly an ounce of gold in them. (.96 and change, to account for coining and alloying)

I think the reference was to the more recent Liberty dollar project (Bernard Von NotHaus / NORFED) rather than the historical US gold standard.

psi wrote:

68Camaro wrote:

Pennysaved wrote:When the Liberty dollar was in use, didn't they increase the face value to reflect the increase in bullion value?

I know the federal government has different goals than the makers of the liberty dollars.

No. The dollar was at a fixed ratio to gold back then. Bullion value didn't change. Thus the term "gold standard". The dollar was set at a nominal 1/20 ounce of gold, and $20 gold pieces had nearly an ounce of gold in them. (.96 and change, to account for coining and alloying)

I think the reference was to the more recent Liberty dollar project (Bernard Von NotHaus / NORFED) rather than the historical US gold standard.

Maybe that is what he was asking, sorry for being thick. And in that case I don't know what their intent was. I don't know if their "dollar" was intended to be equivalent to a US dollar - I wouldn't have thought so, or else it wouldn't have made much sense. Seems to me they were effectively trying to create a new "dollar" that was standardized to an ounce of silver, but maybe someone that is more into that project can speak up.

It is my understanding that the NORFED currency was not intended to mirror the US dollar in value. The major selling point of the coins was the precious metal backing it and therefore its stability in contrast with the fiat dollar. So really, down the road if it caught on (and they were not raided) the Liberty dollar would actually be worth lots and lots of US dollars.

The ATB hockey puck is an even bigger anomaly. Instead of being $5 (5 x a $1 ASE since it has 5oz instead of 1oz), it is 25 cents! I still think it would be a humorous, yet tragic Youtube video of someone trying to use one at a grocery store, or even a bank, to pay or deposit 25 cents to an unaware grocer clerk or teller. They would pass it up as a joke instead of a $200+ jackpot.