question about 40%

[jerry278]

Hey all,

Hope everyone is doing well.

I was wondering everybody's thoughts on 40% silver. With spot being relatively high these days, its hard to find deals, especially with the recent rise in premiums. 40% can be still picked up for just under spot, or for spot (which seems to be the new 'under spot ) But it seems you'll be lucky if you can sell your 40% for just under spot. It seems that 90% coinage is shrinking and shrinking with more and more being melted down and 'recyled' so to speak. But if I am not mistaken 40% is much harder and more expensive to melt down thus the demand is less.

What does everybody think, if close to spot, 40% a good or bad investment?

[beauanderos]

40% will sell for spot, 90% will carry a premium to spot as supply dries up and price rises. Buy any form of silver you can so that you get the most ounces for your money... planning to hang onto it, not sell.

[Know Common Cents]

Either type is good and I agree to buy the most silver you can for your money. BU rolls are now being sold to dealers for bullion prices. If you know a dealer, ask them if you can pick through their supply of US 90% and 40% and select the ones you want. Might as well go for the BU ones if possible. Besides, a bag of BU silver has a higher silver weight than a comparable one of average circulated coins.

[jerry278]

Thanks for the response guys!

I've been thinking that 40% might soon sell for a premium. One disadvantage of 40% is how expensive it is to melt down, to the point it almost isnt worth it. However If silver demand continues as it currently is, its likely more and more 90% will get melted to down to be refined and 'recyled'. Eventually there will most likely be a shortage of 90%. This will leave too options. Exorbitanly priced .999 or 40%. .999 might get too expensive for the average person to afford, and thats when 40% will come into play.
I could see 40% being what 14kt is to pure gold.

[Lemon Thrower]

40% sells for a discount to spot. i doubt it will ever sell for spot. maybe when there is a line around the corner at the coin shop. when people are unloading though, it will be harder to sell. in the last 6-12 months, the discount dealers buy it at has increased slightly, as it has for all 90%. dealers are buying 40 at about 1.70 - 2.00 under spot.

[beauanderos]

40% sells for a discount to spot. i doubt it will ever sell for spot. maybe when there is a line around the corner at the coin shop. when people are unloading though, it will be harder to sell. in the last 6-12 months, the discount dealers buy it at has increased slightly, as it has for all 90%. dealers are buying 40 at about 1.70 - 2.00 under spot.

While this might be true at present, and perhaps for a few more years, at some point in the future the price rise in silver, and the inability to source cheaper forms of coinage (ie 90% having been mostly melted down because it WAS the preferred form of silver for smelters to buy and thus was at that time (the present) more liquid and represented "a better deal" than 40% will guarantee (a form of Gresham's Law) that the good silver (90%) disappears, or is held for much higher prices, as the bad silver (40%) becomes the more standard means of exchange. It is at that point in time that 90% will hold a premium, and 40% sell at spot. Will that coincide with lines stretching around the corners as in 1980? Actually, I think it will precede it. I predict by Fall of 2012, after the dollar crash, and as silver is approaching $200 an ounce.

[VWBEAMER]

I believe in the future Most smelters pay the same for the silver ( pay for amount of silver) from a 40% as they do a 90%, and why shouldn't they? They are getting the 60% copper for free!

[Lemon Thrower]

its a nice theory ray and it might work out that way. i don't know for certain like you do.

i don't think in 1980 they took 40%. it doesnt get smelted because of the magnesium, same reason as war nickels.

there is not really a silver a shortage. the price is just to low so its scarce. when the price is $200 it will come out of the woodwork, the ground, etc.

eventually the price will rise. $200 is possible. but when its $200 an ounce, people will still want pure stuff. with gold at 1480, 10 karat still sells under spot and people prefer 24K.

[beauanderos]

its a nice theory ray and it might work out that way. i don't know for certain like you do.

i don't think in 1980 they took 40%. it doesnt get smelted because of the magnesium, same reason as war nickels.

there is not really a silver a shortage. the price is just to low so its scarce. when the price is $200 it will come out of the woodwork, the ground, etc.

eventually the price will rise. $200 is possible. but when its $200 an ounce, people will still want pure stuff. with gold at 1480, 10 karat still sells under spot and people prefer 24K.

LT... just wondering where you are getting your info from? War nickels had manganese, 40% silver does not. Can you provide any link that verifies the content of a 40% silver half to be partially composed of manganese? As far as there NOT being a silver shortage... hah, don't even get me started. I think we will have to cordially agree to disagree on that one. But you are correct in asserting that more will come to market as the price rises. And low-grade silver-bearing ore would then be profitable to mine, so perhaps production might increase a bit. But I doubt it would be enough to quell investment demand if the price were indeed in the $200 range. Silver, like gold, actually becomes more attractive to most investors (but probably not to us value guys) as the price rises, so good luck being able to source fair amounts of it in any form when it goes parabolic. BTW... my prognostications are never written in stone, but they do envision a time of economic collapse and hyperinflation, not relatively stable scenarios as we now are living.

[jerry278]

http://www.youtube.com/watch?v=-IiarVvZ ... &kw=silver

Good video for those who dont believe in a silver shortage

[Lemon Thrower]

you are correct, i meant to say that war nickels have manganese in them. even without manganese, I don't know of any refiners who take 40%.

as for a shortage, silver eventually will be used mostly for investment. so it doesnt matter how little of it there is if the price is allowed to go up. right now there is a shortage, yes, because the price is capped. when it reaches 200 presumably the price has become uncapped. Right now i can buy all the silver i want. Now, i am a small fish but there is plenty of physical out there. the shortages you read about are good delivery bars on the comex. there is a shortage of them because the price is capped and there is major counterparty risk.

during the last runup, lots of melt came onto the market. 90% was called junk becuase no one wanted it, let alone 40%. the discounts for 90% were large- double digits - 25% or so for a while. I'm not saying that is going to happen again, but i won't rule it out. for 90%, if that happens it a temporary thing because you can refine it to 999 quite easily. 40% obviously would take more work to refine. i am far less certain that it will trade at spot. silver has doubled in the last year and the discount for 40% has widened if anything.

[Lemon Thrower]

Tulving has dropped his buy price 5% per ounce.

[beauanderos]

There may be lots of silver (and I could debate that) available to the existing small buyers, but that "surplus" won't be there when new investors, driven by attention to momentum of price increases, flood into the market. I would rather err on the side of safety and hold my metals, rather than try to trade in and out of fiat for small profits and get frozen out when the supply dries up. Question... doesn't the "extra" work of refining only mean that you would have to "heat up the pot" 2.5 more times to fill it with 40 to refine the equivalent amount of 90 for purification to 999? And... this is the big point... detractors to 40% always point out the reluctance of smelters to accept 40% at a fair price... but why is that even an issue? I don't plan on selling to smelters, and I don't know anyone who does. We sell to other investors so they can hold a form of physical as money, not so they can sell it for melt and gain fiat. Finally, I really do think that - with the right price rise - and who can say what that would be, 90% supply will dry up leaving mostly 40% and 999 for investors to consider. Although that could be two or three years down the road, and is dependent upon the ongoing deficit of silver continuing and even worsening.

[Lemon Thrower]

you may be right. i'm only going by what happened 30 years ago. people were unfamiliar with less than .999 then so you may be right.

temporarilly, there is ample 40% and 90% for that matter. tulving lowered his buy price on 90% also.

if you want to work a deal for my 40% or 90%, pm me.

[beauanderos]

you may be right. i'm only going by what happened 30 years ago. people were unfamiliar with less than .999 then so you may be right.

temporarilly, there is ample 40% and 90% for that matter. tulving lowered his buy price on 90% also.

if you want to work a deal for my 40% or 90%, pm me.

This tells me more about Tulving than it does supply in general. He is overstocked, perhaps not seeing sufficient demand, and wants to draw down his inventory. If he can score silver at a discount to melt than he is ahead of the game. Also, he may be wary of the price run-up, so is hedging his bets by offering to buy at cheaper rates. Although he is one of the largest dealers, his lowering his buy price in no way indicates a consensus of online supply that is abundant. I'm still reading alot of reports indicating otherwise. Anyway, why quibble over nickels and dimes, a percent or two here or there... we should all be gratified that this dramatic price rise, that some of us like Sheik have been predicting and waiting for for years is coming to pass finally. It sure is fun to watch. Caveat. Don't get carried away chasing the train on borrowed money, the train could run out of steam or coast back down the tracks at any moment.