Question from a new stacker

[Sanford02]

Hello all,

I have always been interested and curious about PMs and I am now at a point where I can start stacking a little bit. I have owned 90% and some ASEs briefly several years ago, but I am starting completely from scratch at this point. I have done a little thinking about the coins I want to buy, and I am wondering if I am missing something.

My apologies if this has already been debated, but my main question is this: why choose ASEs over maple leafs? The Canadian bullion coins are 9999 versus the 999 ASEs. They usually come at a lower premium, and their face value is $5CA versus $1US. It seems like the maple leafs win easily in a direct comparison. Am I missing something? Is the guarantee of the US any better than that of Canada? I am not trying to be provocative...I am truly curious as to what would compel a person to buy ASEs rather than maple leafs....other than just unexplainable personal preference....

I am excited to finally be at a place where I can stack some physical silver, and I want to make an informed decision.

Thanks!

[CLINT-THE-GREAT]

In my personal experience, Maples are usually just as much if not more than an ASE. I would buy more Maples if they were cheaper. But lets focus on a couple of your questions..

The $5 face vs $1 face...... this should NEVER be a concern. Can you think of a time or situation in which you would give up a Maple for ONLY $5 or an ASE for ONLY $1?

The Guarantee.... Many could argue whether the US or Canada is in better fiscal condition.... but are you really buying a Maple or ASE for the $1 or $5 guarantee? (see previous point) or are you concerned that they aren't 999 or 9999 pure? Again this shouldn't even cross your mind.

Availability...... the US Mint produces at least twice as many ASE's as the RCM produces. But on the same token there are WAY more people who collect ASE's vs Maples

Don't forget it's all about personal preference. Some like ASE's, some like Maples... both are always worth current spot of Silver.... the premiums fluctuate, and is not always guarnteed. Good luck and welcome back!

-The Great

[Engineer]

Maples tend to get milk spots.

Other than that, the only reason I can think of is that they might not hold as high of a premium during the dips.

[galenrog]

From a barter perspective, silver is silver. Smaller denominations are worthwhile to have from that viewpoint, as are larger bars and rounds. All should be in the safe.

From an numismatic viewpoint, as far as Maples vs ASEs, it depends on you. Premiums differ from time to time, but the more popular will always get a bit more.

The investor is interested in profit, both long and short term. Do the homework, observe the reasons for market fluctuation, then act accordingly.

[beauanderos]

If you're a brand new stacker, with budgetary considerations, I would start with junk silver before even considering gov't issued BU coins that come with premiums. Stick to newer issue coins (rosies, washington quarters, Kennedy/Franklin halves) and you should get coins that are near or surpass the standards used for selling bullion by weight. I would try and build a stack with a ratio of one half/two quarters/five dimes. Build it as large as you wanted, but that proportion should take care of any barter situations... and each type will hold value for you as the dollar crashes and burns. Once you get $50 face or so of junk, then branch out into ASE's or Maple's. What's to keep you from picking up a few of each?

[ScottyTX]

I would start with junk silver before even considering gov't issued BU coins that come with premiums.

Ray... you've seen the premiums on 90% here lately right??

I'm thinking right now the best bang for your buck is .999 generic 1-10 oz bars/rounds. I can't argue with the logic of owning 90% as its a great idea but the premuims right now are high.

[beauanderos]

I would start with junk silver before even considering gov't issued BU coins that come with premiums.

Ray... you've seen the premiums on 90% here lately right??

I'm thinking right now the best bang for your buck is .999 generic 1-10 oz bars/rounds. I can't argue with the logic of owning 90% as its a great idea but the premuims right now are high.

There is that. Start with the cheapest form of silver that you can find. There are some places where you can pick up .999 one ounce silver rounds for as little as 69 cents above spot. I think it's a good idea to acquire both. But for some people, $20 on a round is a stretch, while five dimes for under $9 is affordable.

What most people refer to as a premium is the result of distrust secondary to manipulation. The "paper" price is ludicrous and the result of suppression, good luck finding silver at melt value. Too bad there isn't widespread recognition of "the premium" merely being the physical price of silver... the going rate. Granted, there is still a $2.50 to $3 cushion built into BU govt rounds, but as we've seen, there's a scarcity "premium" as well, though that margin is thinning as new sellers (not staying abreast of the news in the precious metals arena, and unaware of how prices are "set" at COMEX) are duped into selling into artificially low pricing structures and gradually replenishing the low inventories of major online sellers. I have noticed that APMEX raised their junk buy prices by almost a dollar above where they were at, following the last two week's spikes and pullbacks.

[zKott]

Sanford,

To easily answer your questions...

You're absolutely right in your suspicion and diffidence between ASEs and MAps...

to put it very simply for you.. americans love to over spend on all of their purchases because it gives us a false sense of "worth" - (buying american is always better right)

I've often pondered the question of why in the -F- it would cost us more to purchase our own ASEs than it does to buy Maples.. (what with transportation expenses from the Royal Mint to make it down to our distributors etc.)

A Maple is typically $1.00 less than a ASE if buying from a good dealer.

The only thing I can come up with is that Americans think American products are superior, thus higher prices should be charged. (they are right because millions of us continue to buy up ridiculously overpriced ASEs)

Meanwhile, the Canadian Maple is truly the superior product at .9999. (yet somehow miraculously cheaper than the .999 made here, makes no sense)

I would be more interested in finding out how many Canadians & Mexicans (or other countries world wide for that matter) are interested in buying our ASEs and at what price. (Certainly not at a premium over their home country)

Many people may tell you the law of supply and demand factors into the equation of why ASEs are more expensive than other countries silver coins etc. - that is non-sense. It's B.S.

In my opinion, we SHOULD be paying spot or below for our ASEs..

Anyway, to make a long story short - the ONLY reason to buy ASEs is for personal preference or perhaps patriotism etc.

I personally happen to like the ASE and I am attempting to fill a monster box - but once that is filled, I plan on working on filling a Canadian Monster Box... Don't worry about buying JUNK and don't worry about buying generic.. You're preference is what matters. IMO if you want a large stack of quality Ag, don't hesitate in buying Maples...

Good Luck in your stacking!

[Engineer]

In my opinion, we SHOULD be paying spot or below for our ASEs.

I disagree. Spot is the price for paper contracts on thousand ounce bars, and actually having a bar delivered costs above spot. Add in the costs of turning it into rounds, and you're suddenly talking an extra dollar an ounce. Add in the cost of turning it into government minted rounds, and you're probably talking 50% more...and then there's the distribution markup, freight, etc.

Would I like to pay below spot for ASEs? You betcha...but the only time they're widely available below spot is when prices are high enough that everyone wants to take profits...and that typically isn't the smartest time to buy.

[Rastatodd]

"five dimes for under $9."

Point me in the direction of that sale. Best deal I have received here on Realcent was 5 dimes for $10. I'm in agreement with ScottyTX, generic is your best bang for the buck. If you are a speculator wanting to hold silver, for a future run up with out straining the pocketbook, .999 generic is a good fit. Look at Quality Silver Mint or Silvertowne or members here on Realcent have some real good deals from time to time.

[InfleXion]

When it comes down to it having a maple or an eagle is not going to make much difference.

I prefer maples because of the extra purity, sure it's negligible (99.99% vs 99.93%) but it is a higher purity product, and like the design better. Milk spots can be an issue if you are in a humid area, but a jewelry wipe will suffice to clean them off if you don't plan on grading.

However, I have more eagles than maples. Why? Because I live in the USA. More people here know them, they are more widely produced, and if silver becomes money again for the government it stands to reason they will restrict tender of debts made with silver to that silver which was produced by the US Mint.

[Engineer]

I have more eagles than maples. Why? Because I live in the USA. More people here know them, they are more widely produced, and if silver becomes money again for the government it stands to reason they will restrict tender of debts made with silver to that silver which was produced by the US Mint.

That's the reason I stack more US ounces than foreign. Maples currently have an advantage in reporting requirements, but that doesn't mean their current advantages wouldn't disappear overnight. Krugerrands are a good example of foreign government bullion subjected to harsher IRS treatment than Eagles, and there's nothing stopping an overnight rule change from treating Maples and Libertads the same way.

[Sanford02]

I have more eagles than maples. Why? Because I live in the USA. More people here know them, they are more widely produced, and if silver becomes money again for the government it stands to reason they will restrict tender of debts made with silver to that silver which was produced by the US Mint.

That's the reason I stack more US ounces than foreign. Maples currently have an advantage in reporting requirements, but that doesn't mean their current advantages wouldn't disappear overnight. Krugerrands are a good example of foreign government bullion subjected to harsher IRS treatment than Eagles, and there's nothing stopping an overnight rule change from treating Maples and Libertads the same way.

Thanks for all the replies. Maybe someone can help me better understand what engineer is talking about here. What is the reporting requirements advantage that maples have? What do you mean by reporting requirements? How have the krugerrand a been more harshly treated? How is the IRS involved in bullion coin purchases?

Thanks again, I have some dry powder burning a hole in my pocket.

[theo]

I'm not sure either but I would guess it has something to do with the coins potentially being considered a foriegn investment, since a portion of their value is reflected by the fact that they were minted by a foriegn sovereign government. So if you sell a bunch of Maples in the future, the IRS will likely regard your capital gains as foriegn investment income. Right now I think that it involves filling out an additional form.

Also, I'm not sure which (if any) foriegn sovereign coins are approved for IRA's; but if they are, a little more paperwork may be required.

I wouldn't be too worried about it, especially if you are buying in small amounts.

[Engineer]

Here's a good read on the subject of reporting.

http://www.coinweek.com/news/industry-insider-irs-reporting-rules-for-cash-transactions-and-precious-metals/

[Sanford02]

Here's a good read on the subject of reporting.

http://www.coinweek.com/news/industry-insider-irs-reporting-rules-for-cash-transactions-and-precious-metals/

That article had nothing to say about reporting requirements involving ASEs or maples....the only thing it said about silver reporting was that if I sell 1000 ounces or more to a dealer within a 24 hour period, there is a reporting requirement.

So, my question remains unanswered....how is there a reporting advantage in having maples vs ASEs?

[Hawkeye]

Personally, I buy more Maples than ASEs. Cheaper, slightly higher purity, higher "floor." I will deal with the occasional milk spots. I like ASEs, but I usually can't bring myself to pay extra for them. Just my 2 cents.