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Monday, July 9, 2012

A Closer Look at Bullion Coins

By: Wes Messamore

In last week’s Money Monday feature, I shared my first experience buying gold and silver bullion coins for the purpose of protecting my savings from inflation and the risk of a major run on the global banking system, which many sound money advocates believe is imminent. I also promised to cover bullion coins in more detail for this week’s Money Monday feature. Here’s what I said about them last week:
“Here was my strategy: I did a bunch of research the day before on all the world’s most well-known bullion coins, that is, coins minted after the year 1800 out of 90% or more of a precious metal, and are or were a legal tender in their country of origin. I prefer these to junk metal because they are in a form that people are comfortable viewing and using as money, and they are more-readily recognizable as trusted pieces of metal bullion with metal content in amounts that are already well-established and known. They have a reputation.”
When buying bullion coins, you’re going to spend a little more than for the same amount of metal in the form of a bar or ingot. I think it’s worth it. Now this is just my own reasoning. I haven’t read this in financial newsletters from libertarian finance experts who are well-informed enough to charge for their advice (but they might say the same thing for all I know either). Feel free to comment and share your thoughts whether you agree or disagree, but as I look into the future and see how people will react to a monetary collapse, I see bullion coins as being particularly valuable because of their reputation. Few people today can tell silver apart from other metals by its look, by its weight, by its sound. Few people have the experience or knowledge to appraise the purity and value of a random ingot of metal. But information about bullion coins is public-knowledge and readily available. Markets can use and disseminate this information, easily price bullion coins relative to the goods they can purchase, and use them as a conventional and widely-accepted medium of exchange..

at The Silver Underground.

Wes Messamore,
Editor in Chief, THL
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