Why buy silver coins? (Illegal meltdown)

[123tim]

I just discovered several articles stating that it is illegal to melt down U.S. currency.

This makes me seriously wonder if it is a sound idea to buy silver coins based on the melt value of the coin.

These are the things that I'm wondering about:

1.) If it's illegal to melt a coin, who will pay the melt value?

2.) Even if it is legal for someone (somewhere) to buy silver coins to melt down, will the government put an end to this (and confiscate silver coins at face value at some point)?

3.) I read that you're not allowed to take more than five dollars of nickles out of the country because of the melting problem. Why buy silver coins to sell at a later date for melting down?

4.) Maybe it's safer to buy coins that are out of circulation? (Morgan dollars, Mercury dimes, etc.)

I hope that each of my statements can be shot down. Please try your best to do so.

Thanks.

The link to the article that I've just read:
http://www.moneyweek.com/file/23192/why-its-now-illegal-to-melt-down-us-coins.htmlhe

[Allen72289]

to my knowledge it is only illegal to melt down 1 and 5 cent coins...

defacing is different, that's shaving metal off the coin.

the 5 dollar deal is true.

[Dr.3D]

I just discovered several articles stating that it is illegal to melt down U.S. currency.


1.) If it's illegal to melt a coin, who will pay the melt value?

There are many places you can sell those coins to. Northwest Territorial Mint is one of them. See this page for how much they sell and buy them for:
http://bullion.nwtmint.com/silver_bags.php


2.) Even if it is legal for someone (somewhere) to buy silver coins to melt down, will the government put an end to this (and confiscate silver coins at face value at some point)?

As far as I know, it is not illegal to send them out of the country. Notice how the Northwest Territorial Mint can ship them to Canada? So far the only confiscation I am aware of was that of gold. And that confiscation didn't work out very well as they only were able to confiscate a small portion of what was really out there. I highly doubt they would try it again and even if they did, it would probably be for the gold and not the silver.


3.) I read that you're not allowed to take more than five dollars of nickles out of the country because of the melting problem. Why buy silver coins to sell at a later date for melting down?

One does not buy silver coins to be later melted down. You buy them to later sell them to a broker. Or if the excrement impacts the pneumatic impeller, you may find them useful for barter purposes.


4.) Maybe it's safer to buy coins that are out of circulation? (Morgan dollars, Mercury dimes, etc.)

Morgan dollars and Mercury dimes are exactly what are considered 'junk' silver.
They are still in circulation by the way and may be accidentally spent at face value. (ouch would that hurt)

Here is a link to the Morgan dollars: http://bullion.nwtmint.com/silver_morgan_dollars.php

Hope this helps. :)

[123tim]

to my knowledge it is only illegal to melt down 1 and 5 cent coins...

defacing is different, that's shaving metal off the coin.

the 5 dollar deal is true.

Thank you Allen. You're right.

I read a better article here:
http://www.signonsandiego.com/uniontrib/20061214/news_1n14coins.html
This article says what you just said.

This law seems to deal with new coins that are still in circulation....Does this mean that coins like the WWII nickels that have more silver can't be melted down?

More importantly - Could the law be broadened to include pre-1964 coins like dimes and quarters?

[Allen72289]

welcome.

idk

who knows what illegal stunt washington will pull out of the hat next

I think it's legal to melt canadian pennies in the u.s.

you could get 10 k worth transport them here and double your money..

http://www.coinflation.com

http://www.ryedalecoin.com > if you wanna get serious. sell the pennies on ebay to cover cost of the machine..

[ronpaulblogsdotcom]

The melt value is just a term. It does not mean that you really ever intend to melt them. Its just a way of talking about the metals value in the coin.

Also people know and trust the shape and look of a coin. They can also measure the thickness and size. That will reassure them that it is a real coin of one ounce or one tenth or whatever.

A coin is always worth at least its melt value. Because that is what is in it. I would not melt it. Who would want to buy a blob of gold or silver? Well people would but they would probably not trust it as much. They would have to weigh and then do a water displacement test to see its purity.

Go to a coin shop. All coins that are solid silver or gold are worth more than their melt worth. Because of collective value.

[123tim]

Does anyone have any experience with silver bars? Are they a good investment? It seems like they're pretty expensive, but I think that I did see 1 ounce ones for sale online somewhere.

Would it be a good idea to buy a percentage of these just in case?

[bander87]

Does anyone have any experience with silver bars? Are they a good investment? It seems like they're pretty expensive, but I think that I did see 1 ounce ones for sale online somewhere.

Would it be a good idea to buy a percentage of these just in case?

The shape doesn't matter. Silver is silver is silver. Just some people like different kinds of bullion more :P

What do you mean by "expensive"? If anything, bars are cheaper because you get more for your money.

[Ozwest]

If you can afford it, have a mix of both.

Coins for barter.

Bars as a stash.

[muh_roads]

I believe gold and silver is okay to melt down because it isn't considered US currency, it is considered collectors items.

But that comes with a price if you sell the melted down metal. Selling a collectors item means you are supposed to file a W-9 to the IRS, which lets them know that you owe 28% tax on your sale. It should be considered a capital gains tax of 15% but it's not.

Why would you want to melt down yourself anyway? You discredit the value of your metal because you can wipe away the assay stamp for example, which is originally there to prove the value of the coin in oz. Sell to a pawnshop and let them melt it down if they wish to. It'd be safer if you didn't.