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The E-Sylum: Volume 9, Number 18, April 30, 2006, Article 15 THE GREAT SILVER MELT OF 1980 Last week I asked about numismatic gems that turned up in the buckets of coin and bullion dealers in the silver frenzy of 1980. Dave Lange writes: "I saw quite a few uncirculated pieces of modest scarcity get processed through counting machines as just so much bullion, but I never found anything truly rare at my local coin shop. The best piece retrieved was an 1877-CC half dollar in choice XF condition (probably AU by today's standards). I bought this for its melt value which, unfortunately, was not much less than its numismatic value at the time. I've always contended that very few of the silver coins cashed in for their bullion value in 1979-80 were actually melted at refineries. When one does the math, it simply doesn't make sense to go to the added expense of having the coins rendered into bars. They were worth as much in the marketplace in coin form as they were in bar form, since the extraordinary demand for silver was not from industrial need but rather from pure speculation. Such speculators would not have added to their overhead without a clear financial incentive to do so, and this simply didn't exist. I believe that these accounts of millions of silver coins being melted is just a myth perpetuated by those trying to create a sense of rarity that simply doesn't exist. It seems to be one of those stories that, told often enough, becomes numismatic fact. It's revealing that all of these reports are not from end users, but rather from coin dealers. I'd like to read an account from someone who actually worked at a refinery and witnessed the coins being melted before I would accept it as fact." [Dealers shipped the silver out as fast as they got their hands on it, for two main reasons: One, they needed to get the cash so they could buy more the next day, and Two, because they were afraid of the price dropping before they could turn a profit. So who was left holding the bag(s) when the bubble burst? Investors who took delivery of silver bags? Smelters who sat on the bags? Middlemen? Have most of those bags been returned to the marketplace, or are there still piles of silver coins sitting around in vaults? Several years ago investor Warren Buffett bought over 100 million ounces of silver, and I understand he took delivery of the metal. Was it in bar form, or did the purchase include bags of coins? -Editor] Wayne Homren, Editor The Numismatic Bibliomania Society is a non-profit organization promoting numismatic literature. See our web site at coinbooks.org. To submit items for publication in The E-Sylum, write to the Editor at this address: whomren@coinlibrary.com To subscribe go to: https://my.binhost.com/lists/listinfo/esylum | |
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