Constitutional Silver is often referred to as Junk Silver, and sometimes referred to as 90% Silver or Pre-1964 Coins. With a few exceptions, Constitutional Silver carries 90% silver content and is dated 1964 or earlier due to The Coinage Act of 1965, which eliminated silver from US dimes and quarters and reduced silver in half dollars from 90% to 40%. After 1970, the half dollar’s 40% silver content was completely eliminated.
The term Junk Silver comes from coins that are in fair condition but have no collectible value outside of the silver content it contains. It is loosely called “junk” only because of the lack of collectible value as opposed to the condition of the coins.
Gresham’s Law states that “bad money drives out good money”, meaning that if there are two forms of money circulating and accepted as similar value, the more valuable form of money will disappear. This is why today, it is almost impossible to find Constitutional Silver coins among the base metal coins we see circulating today.
If there is one type of silver investment that requires applying a little elbow grease to obtain instead of just buying from precious metals websites, it would be Constitutional Silver. These websites charge relatively large premiums over spot price and won’t change their pricing, most likely due to their ability to provide convenience as well as allow targeted purchases (such as buying only Kennedy Half Dollars, or a roll of quarters). Meanwhile, local coin dealers and pawn shops will more easily negotiate the price because they must keep their product moving as they likely don’t have the deep pockets to match the companies that own these websites. Expect a mixed bag of random coins, which can be bought indiscriminately or purchased by your own choosing based on their limited selection. Since there’s no real collectible value, the main point of contention is going to be how much or how little gets paid over spot price.
ADVANTAGES OF CONSTITUTIONAL SILVER
Constitutional Silver is very popular with preppers if the proverbial crap hits the spinning object, for several reasons:
1) Easily recognizable coins in dimes, quarters, and half dollars
2) Legal tender which can still be spent as dimes, quarters, and half dollars – even if it’s a bad idea to do so today
3) Smaller denominations that are less than 1 troy ounce, as small as dimes that contain less than 1/10 of an ounce of silver
4) Can be obtained at close to spot price or even at spot price of silver, and regardless it’s still actual silver
5) If hyperinflation were to kick in with our current global fiat currency, such as in Venezuela or Zimbabwe, the idea is that precious metals would maintain their purchasing power and constitutional silver could be a nice alternative to have around
DISADVANTAGES OF CONSTITUTIONAL SILVER
1) They can take up a lot of room and weigh a lot, storage generally isn’t as simple as stacking up 99.9% silver bars and rounds
2) There is no additional numismatic value, the silver content is only good for its “melt value”
3) If a societal collapse were to happen, Constitutional Silver could be very valuable for bartering if this actual situation were to occur. But if there is no collapse, avoid adding 35-40% silver coins to your collection as there is next to no demand from dealers and selling those back will fetch much less than spot price. That’s a lot of dead weight for storage compared to 90% silver coins.
4) Understand the process when selling to a dealer. A dealer will pay the most for 99.9% silver, so if you walk in with 90% silver to sell, the dealer has to give up part of his present cash flow to hold silver that is not as easily tradable as 99.9% silver. In extreme market or societal situations, if a dealer’s cash flow is tied up, 90% silver could suffer a larger discount relative to the spot price.
Each coin is different in weight, it’s not rounded off nicely like 1 troy ounce. And even then, only 90% of it is silver. Next, let’s figure out the easy trick to calculate the actual silver content within each coin.