Recently, I just became aware of what apparently is a growing interest in the multi-level marketing business : silver. It’s not hard to see the appeal. After all, anyone reading this is probably already well versed in the benefits of physical ownership of silver and protection against a diminishing US dollar. To anyone new to the arena, though, the sales pitch can be convincing. Unfortunately, like most ‘wealth-creation’ schemes, those late to the party are only enriching the founders.

If you’re not familiar with these networks, it basically goes like this: you agree to a monthly ‘subscription’ to purchase one MS70 slabbed Silver Eagle (or Maple, etc..) at a price of somewhere between $99-130 depending on the seller. You’re then enlisted encouraged to sell the program to your friends, family, and coworkers, earning commissions on their purchases in a matrix or downline-style system. The end result is, supposedly, a whole lot of silver, a whole lot of financial security, and a whole lot of goodwill from all the people you got into the safety of numismatic silver coins.

I was recently pitched on one of these programs and got a good listen to the main selling points. My impression was that the system distorts the rationale for physical ownership of silver to justify the massive premiums needed to accommodate the commissions within the system. For example, I was told that ‘numismatic coins appreciate faster than bullion’ when I noted that I preferred old, scratched, cleaned, or nicked up silver at market prices as opposed to gem-quality MS70s. I was also told that MS70 eagles were ‘rare’ and that if I bought from within the program, I could sell them back to the company within 5 years at my purchase price if I was ever unhappy with them. It was presented as a ‘zero-risk’ opportunity, and all I needed to do to find financial freedom was pull that trigger. When I stated my concern with the cost of the Eagles against what I could find them for elsewhere, I was told that with a few sales to people I’d recruit, they’d be free. And you can’t beat free, right?

I’m going to stop short of saying these networks are scams, because from what I can research online, they actually will deliver you silver. The problem, naturally, is the ultra-misleading pitch of why you really need MS70 Eagles in the first place. The bottom line is – you don’t. Eagles are good. Stacking and saving them is good. Buying them monthly is good. What’s bad is being glued to a non-market priced commitment. What’s bad is considering a bullion coin a collectible. After all, over 260,000,000 Eagles have been minted since the program began in the mid 80s. Since they aren’t intended to be circulating coins, they’re rarely handled. Most sellers on eBay are actually shuffling them out of the mint ‘mega box’ of 500 and right into protective flips for shipment. Of course there are going to be high grade coins! You can bet most new Eagles would grade at least MS65 right from their doorstep. While I believe there are maybe ten thousand MS70 Eagles documented across all grading companies, there are likely hundreds of thousands more sitting in safes. Most enthusiasts won’t bother grading Eagles unless they have some bulk-grading relationship with an authorized grading company or their affiliates. The problem is the return on investment. While a shiny new Eagle may cost you $35-40 on eBay or through a local coin shop, getting it graded is likely going to cost you an additional $25-40 per coin. So now your total investment is likely as high as $75, but if they aren’t 100% perfect and grade a ‘lowly’ MS69, they’re only selling for $50 on eBay. Why even bother grading it, right? Because of that, there are likely hoards more MS70 coins out there. They could never truly appreciate to some astronomical level based on their numismatic value because invariably the supply of them would greatly increase as the economics of getting them graded improved.

As to their distinction that they are a collectible, they could be in the right context. For example, if you bought a new MS70 every year and have collected the entire set since it began in 1986, that’s probably worth a premium to a prospective buyer to have the entire set. You need to have a plan for something like that in your mind already. If you just want random silver every month, then you want to minimize your premiums. Collectibles can’t be destroyed and maintain their value. I can’t burn down my mint condition Atari 2600 (new in box, with controllers and 10 games!) and convince someone the ashes are worth something. However, if you were to take a knife and slice up that MS70 Eagle with a few deep scars on each side? You’d still have no problem finding a buyer. That tells you that the real value is not in how flawless the finish is, but in the core of its content. The US Government makes Eagles as a bullion coin with limited PROOF mintages for collectors. After all, you could get a PROOF eagle, with arguably has more ‘quality’ than a mere ‘circulated’ eagle, in the mid $60s on eBay.

I can’t argue that the MS70 coins have a premium to MS69 coins and everything below that. Who cares, though? In the end, you don’t have to compromise all that much. It’s kind of like buying  a car. Sure, you can buy a Mercedes and it’s recognized to sell for more than a Honda, but it is really worth more?  They both serve the same function, but the Honda lets you buy twice as much gas with the money you’ve saved. In the end, you’ll go ‘twice as far’ in the cheaper Honda than you will in the luxury Mercedes. That plastic case and that grade on that coin are like the leather seats and individual climate control in that Mercedes. Neat to have, but they inherently add no ‘value’ to the purpose of the automobile, which is to get you from point a to point b. One day when the dollar is spiraling into oblivion and you’re trying to get your purchasing power from point a (oh crap! run!) to point b (i’m going to make it!), you’ll be glad you added a whole lot more gas to your tank.

After the downgrade of the US credit rating by S&P, headline after headline has been trotting out to upgrade gold price targets. The biggest one was by no other than JP Morgan, noted large commercial silver short, expecting $2,500/oz gold by the end of 2011. This particular prediction was the first I’ve see that was substantially away from the current market.

Although silver was not mentioned alongside gold in the price forecast, a relatively conservative gold/silver ratio of 40 by year end effectively predicts silver at $62.50/oz. If silver were to revisit a more-deserved gold/silver ratio of 31 – which is where it was when silver hit the April all-time highs – we’re looking at $80.64. Current estimates have the actual ratio of physical silver to gold in existence now around 10:1 and dropping. Yes, that means in a four-square world silver would be on its way to $250.00 per ounce.

[image title="goldtosilver" size="full" id="578" align="center" linkto="full" ]

At any of these prices, silver would obliterate those April highs, which usually spurs more buying. For many, myself included, current prices may present the very last opportunity to grab a tangible quantity of silver at a reasonable price. I don’t know about the rest of you, but I’m not lucky enough to have a floating $1,800 in discretionary income to pick up a gold eagle. I can, however, add a couple ounces of silver each month for no more than a hundred bucks. On top of that, I can expect a similar, if not better, appreciation over the long run.

Regardless of what dime-a-dozen analysts say, don’t get suckered into thinking that silver is not a ‘monetary’ metal. Money is a matter of perception. Does a $20 bill have any more ‘value’ than a $10 bill? They’re the same size, weight, and material. The only difference is the design printed on each. Yet that design has amazing power. If you put George Washington’s face on it, some people might not even pick it up if they passed it on the street. Change it to Ben Franklin’s picture, and all of a sudden you’ve got a crowd. The silver market is smarter; a one ounce round with Ben Franklin’s mug on it is worth nothing more than a one ounce round with Ben Stein’s. When you step back and think about it – our entire monetary system is absurd. Money becomes money when someone else is willing to take it in exchange for a good or service. Our entire human history has told us that silver will always be recognized as a unit of exchange for goods and services. Silver is mentioned several hundred times in the bible and was the basis of most actual exchange in the Roman empire while gold coins rarely saw circulation.

When I think of the where silver is headed, the 20-year gold to silver chart tells the story. Never in 20 years has gold retested its highs against silver – not even close. Two times, in 2003 and 2008, it topped out at a ratio of around 80 and plummeted, falling 37.5% from its high in 2003 and a whopping 61% from its 2008 highs. If you need further evidence, April’s move in silver broke the 20-year low of the ratio, an extremely good sign for holders of real, physical silver. This tells us we can cheer wholeheartedly for gold, regardless of how much we hold relative to silver. Not only does recent history suggest that the ratio is in a long-term decline that would need nothing short of an act of god to reverse, but ancient history confirms this as well.

The practical matter of silver being flat-out cheaper in dollars makes the case only stronger. We see this on eBay all the time. Fractional pieces of gold sell for massive premiums, because they allow the buyer to have gold at a more affordable cost. Sure, on a per-ounce basis they pay out the ears, but they’re willing to pay said premium as long as they can hold some gold – any gold – for a small, up front cost. Silver will only become more and more popular relative to gold for the very same reason.

Parabolic gains are still coming. For now, enjoy the lazy river of gold’s wake and accumulate where you can.

I suppose it eventually had to happen. Courtesy of a FatWallet email earlier today:

Dear Valued Member,

We want to share recent news that may pertain to you since you’ve made an
eBay purchase through FatWallet this year.

At eBay’s request, in accord with a test they are conducting over the next
several months, we will be suspending eBay cash back. This means eBay will
not be offering cash back on any site, including FatWallet, for purchases
made on or after 6/16.

We will let you know as soon as eBay cash back resumes. We are sorry for any
short-term inconvenience this may cause you.

Best Regards,
FatWallet

eBates and others have suggested their respective programs hope to return by October 1st. I suspect, however, that eBay will end up ditching these programs altogether. Their eBay bucks program keeps the money in-house, and shareholders can’t be keen on the company paying referral fees in an age when its brand awareness, 4 years ago, was even stronger than that of Amazon. I can’t imagine it’s any less today.

While I’ll miss the extra 1 or 2% cash back (which you could stack in addition to the 2% eBay bucks credit), eBay bucks alone is still a good program to reinvest into future silver if you’re a persistent buyer on eBay.

As if you didn’t need more evidence to suggest that real, physical holders of silver could care less about the fraud-ridden, margin-crazy, Comex paper-silver market pricing, check out the latest eBay data coming out of 24hr gold. Nearly a MONTH after silver almost pushed $50/oz and tumbled almost a full $20 backward thereafter, you’d think that all those ‘suckers’ who bought on the way up would try to be unloading at any price, wouldn’t you?

The data suggests otherwise.

1oz American Eagles, which the COMEX says is worth just $36 and change today, are selling well in quantity for as low as $45.95 with free shipping. The seller has already sold over 180 eagles between $45.95 and $48.75 May 10th through today. During this period, it doesn’t appear as if the premium per coin ever dipped more than a few cents below $10. Check out the rest of the premiums right now:

[image title="24hrgold" size="medium" id="529" align="center" linkto="full" ]

Over on the retail side, Apmex is still buying back any-year Eagles above the current market price. Sure, it wasn’t an unfathomable act when silver was hitting daily highs, but nearly a month after the ‘bubble’ burst and they’re still paying a 5% incentive to sellers?  How is it that one of the largest bullion dealers in the world didn’t get absolutely pounded with supply when silver plummeted – at least enough supply so they’d be able to stop coercing sales? In the stock world, when a market maker has to go dramatically above the market to get stock, it’s never for a good reason (hint: short covering).

[image title="apmexbuy1" size="full" id="530" align="center" linkto="full" ]

For long, physical holders of silver, these small examples of true market resistance to the paper pricing of silver has to be encouraging. Going physical gets you the same upside exposure without most of the risk of violent, orchestrated price drops. When the prices were at their peaks, you could easily sell into it (coin shop, eBay, wherever) if you wanted. Even after falling off a paper cliff, physical markets are in some cases still exceeding the paper highs! After all, what long in SLV is going to be able to sell his shares now at $45 bucks a clip?

For those of you that do a lot of buying on eBay, you’ve got a week left on a pretty sweet deal. Gone are the cashback days (sigh), but Microsoft has been running a promotion for the last month, ending on 5/18, where you’ll get 8% more eBay bucks on your silver purchases (or any other purchases, of course) and a $5 bonus just for installing Internet Explorer 9 and launching eBay through a shortcut. I’ve bought a lot through the promotion and can confirm it’s legit. On top of that, IE9 is actually a *much better* browser than IE 7/8 was, so if you’re running an older version or using FireFox/Chrome, it won’t kill you to sell out for the sake of cheaper silver. You can always uninstall on the 19th! =)

eBay bucks are a cinch to use and ones you earn this quarter (through June) will be payable in July. There’s nothing to really redeem either. In early July when you try to buy something on eBay, you’ll just see your bucks applied against the balance. If you bought $100 worth of silver this week, you’d end up getting everything for $85. Not too shabby if you’re hovering near the CME-manipulated paper spot price.

Here’s the fine print:

SUPPLEMENTAL TERMS AND CONDITIONS TO THE EBAY BUCKS REWARDS PROGRAM

In addition to the Rewards as described in Section 4 of the eBay Bucks Rewards ProgramTerms and Conditions, you may also be able to earn additional Rewards based on a Qualifying Payment Action, defined below (“Transaction Rewards“). Transaction Rewards means a U.S. dollar amount which will be given in the form of an eBay Bucks Certificate and will be attributed to the Eligible Participant’s eBay account upon the following criteria:

• 1. are the intended recipients of an invitation from eBay to participate in the eBay Bucks Internet Explorer 9 Promotion (“Promotion“),
  2. have Windows 7 or Windows Vista installed on their computer,
  3. successfully install Internet Explorer 9,
  4. follow the steps outlined on: http://anywhere.ebay.com/browser/internet-explorer/?camp=bucks to add (“pin”) the eBay website to your taskbar, and
  5. after clicking on the eBay pinned website in your taskbar make a purchase on eBay.com,

1. Only Eligible Participants who:may receive Transaction Rewards in connection with such promotion; 2. The Promotion starts on April 20, 2011 at 12:01 AM PT and ends at 11:59 PM PT on May 18, 2011 (Promotion Period“); 3. For this Promotion, the Transaction Rewards will be 8% of each Qualifying Payment Action (excludes sales tax, shipping charges discounts, partial refunds, free items, items that fail to comply with applicable eBay terms and conditions, past purchases, and non-shipped, undeliverable or returned items) for each transaction, plus an additional $5 for the first Qualifying Payment Action made during the Promotion Period; 4. “Qualifying Payment Action” occurs when an Eligible Participant who was the intended recipient of the Promotion invitation properly installs Internet Explorer 9 and follows the steps outlined on: http://anywhere.ebay.com/browser/internet-explorer/?camp=bucks and, after clicking on the eBay pinned website in your taskbar properly purchases item(s) on eBay.com during the Promotion Period; 5. Eligible Participants who fail to properly execute a Qualifying Payment Action (as outlined in 4 above) will not earn Transaction Rewards; 6. Transactions Rewards are a subset of Rewards so regular Rewards and Transaction Rewards will be combined in the Eligible Participant’s account and on the eBay Bucks Certificate and accordingly, all terms and conditions that apply to Rewards (including caps on earnings, excluded categories, etc.) will also apply to Transactions Rewards; 7. Transaction Rewards may not appear in the Eligible Participant’s eBay Bucks account until seven (7) days after the Promotion Period ends; 8. Transaction Rewards will be tied to the eBay account of the Eligible Participant; 9. Unused Transaction Rewards on an eBay Bucks Certificate are forfeited when the eBay Bucks Certificate expires; 10. eBay reserves the right to hold back or otherwise suspend Transaction Rewards after registering in its sole discretion to investigate compliance with eBay’s policies so Transaction Rewards may not post for Qualifying Payment Actions during eBay’s investigation and will post if eBay clears the action; 11. Notwithstanding anything to the contrary in section 6.1 in the eBay Rewards Terms and Conditions, and for the purpose of these Supplemental Terms and Conditions only, eBay reserves the right to modify or terminate these Supplemental Terms & Conditions at any time without posting prior notice; and 12. eBay reserves the right to cancel, amend, or revoke the Promotion at any time.

 

If you were a frequent eBay silver buyer like me, you might feel a little shell-shocked looking at the latest prices for staples like American Eagles, Canadian Maples, and the Austrian Philharmonic. That’s because silver is no longer dirt cheap (now it’s just cheap, minus the dirt) and I haven’t seen mega-sellers with any big inventories for 1oz coins. I don’t know about the rest of you, but I remember guys putting up 100 1-ounce Philharmonics at $19/oz and just sitting there for a week or two before they needed to reload. Nowadays, you won’t find any 1oz silver for under $40/oz on eBay unless you’re putting some time and effort into it.

If you’re having trouble finding good buys on eBay, here are some items to put you on the right track. This list is by no means definitive, but should prove helpful if you’re just getting started buying silver on eBay. I almost exclusively use eBay for buying silver nowadays, with only occasional visits to the coin shop where I usually leave – disappointed – because they don’t have any silver left.

- Get a Krause Standard Catalog of World Coins. It covers 1901-2000, and there are editions for later coins. It’s a heavy, expensive book, but it’s invaluable to searching for lesser-sought silver. Some older editions have CDROMs included, making it much easier to manage. When you see auctions that have a ‘KM #’ listed by them, they’re referring to the Krause identifier. It’s worth the money to know what’s out there. If you don’t have this or something similar, you are working with a major disadvantage to others.

- In a quick-rising market (like silver tends to be), save some sellers that have big eBay stores. Most likely, they won’t be able to update their prices fast enough. My thinking is that most of them fix their prices to a premium they like, maybe 15% above spot when they list the item. If they’ve got 100 or 200 items in their stores, 20 or 30 of which are silver coins, chances are they aren’t going listing-by-listing and updating the prices. I had a saved seller from a month ago with a lot of interesting silver that was too much above the market for me at the time. When I checked his stuff out recently, a lot of the prices hadn’t moved! When I did a ‘Buy It Now’ and grabbed a few ounces, I ended up getting a couple bucks below spot. When I checked back on the auction a few hours later, he had already raised the price by $2/oz.

- You need to stray from your comfort zone. When silver was mired under $15/oz, I didn’t need to go out and buy ‘exotic’ silver from some island nation I’ve never heard of. That’s because the brand-name pieces were widely available and relatively cheap. Today, though, you have to do the homework and get what you can. When I first got into coin collecting, everyone told me to avoid the obscure pieces because of the belief that the market was limited for their value. As far as numismatic value, I completely agree. Silver value, on the other hand, is much easier to market. It has no nationality. Would it be hard to sell someone on some cupronickel ‘rare’ coin from Vanuatu? Absolutely. Would it be hard to sell someone on the very same coin if it were made of silver? Hardly. If it’s in Krause, if its got silver, and the seller doesn’t want a monster premium for it, they’ve got a market.

- Try not to bid. I know that might sound counter intuitive, but bidding screws up your hopes of getting cheaper silver. For starters, interest draws interest. I think that some people, mostly casual buyers, are reluctant to be the first bid on some items, especially ones you’d need Krause to confirm. If there are no bids, some people may assume there’s something ‘wrong’ with the item and pass on it. Conversely, lots of bids, for some reason, appear to be validation in the eyes of some buyers. That explains why there are ’100 mills’ (silver plated) bars on eBay going for $35 with plenty of bids, even though the bars are worth a fraction of that. When you see initial bids, they’re often not maximum bids anyway. Ever see an auction for something you know is worth $100 that starts at $0.99? If you’ve ever bid on these, you probably just threw in the minimum bid for the hell of it just in case the universe aligns and no one else sees the auction. That mentality comes into play below.

- Snipe, snipe, snipe. So you’ve got the item in your sights, there are no or low bids, and the auction is going to end within minutes. Time to lock and load. Within a few seconds of the close (make sure to give yourself enough time to place the bid, confirm, and allow some latency), put in your best bid. Because you won’t have a second chance, you’ll need to bid true to what you’d really pay. If there’s just a lone bidder, there’s a great chance they went low early on and really didn’t set up a true proxy. These guys are ripe for the snipe. As they watch the final few seconds tick away excited to get a mega discount, you’ve put in your ‘true’ bid, easily trumping theirs, and leaving them no time to raise. When you do so, you might be surprised to see how low their ceiling actually was.  A month ago I found a terrific piece bidding just $105 on only a couple of bids with 15 minutes left. Within the last minute, I put in a bid for $140, which was about 10% equivalent under spot. As the auction closed, it ticked up to just under $120 leaving me the winner with an amazing 23% difference to spot. Where else you going to get that kind of break?

- Make offers make sense. Some listings are fixed Buy It Now-style with the option to make an offer. If the Buy It Now price is too much of a premium (and a lot of times it is), the seller is really just soliciting an offer with the added chance of someone actually paying the premium. In my opinion, the best times to make an offer is right as the auction is listed (you can search for newly listed items with best offer options) and right before the listing ends. As they are listed, you might catch someone who is desperate for some cash who will take a reasonable offer for a quick sale. As the listing ends, you might be the last chance the seller has to liquidate. That said, don’t get too cute. If the Buy It Now is actually reasonable enough, offering and waiting for the response is just giving someone else time to pull the trigger.

- Consolidate Shipping. The price of everything is going up, and shipping is no exception. Paying $4 for shipping on a $37 coin means silver has to hit $41/oz for you to break even. If you could buy two coins, though, and have the seller pop them in the same padded envelope, you’d only need silver at $39/oz to break even. A lot of sellers will combine shipping in some fashion; some will offer cheaper rates for each individual item, and others will offer the additional items for free. After all, shipping (4) 1oz coins from California to New York only costs $1.79 via snail mail and under $5 with priority mail. The seller doesn’t lose a whole lot by combining shipping, but they might gain our business by doing it. When in doubt, ask.

- Milk promotions. There are all sorts of ways to trim some of your costs down, even with the beloved Bing Cashback gone. Are you using eBay bucks? If not, you’re missing out on a quarterly 2% cashback on your eBay purchases. How about FatWallet? That’s another 1% payout per purchase (yes, in addition to the eBay bucks!). How about the $15 eBay Gift Card for $7 that Groupon is offering for the next few days? If you were buying $100 of silver at spot today, you can get your cost down to under $90 without breaking a sweat. It all ads up.

Got your own suggestion for buying silver on the cheap? Let us know in the comments!

If you haven’t been able to get your hands on the new 5oz America The Beautiful silver bullion, you’re not alone. With a steady barrage of articles over the last few months apparently fueling the fire, demand has been consistently strong in the face of a rather tiny initial public offering. After the early price gouging from dealers (and surprisingly swift policy changes from the mint), buyers are still facing stiff premiums from opportunistic sellers on eBay. Unless you’re looking to spend hours in line waiting for your local shop or bidding up the massive premiums on eBay, chances are that you’ll be without one until the mint can finally ramp up real production. If you can’t wait that long to get a piece of shiny 5oz silver love or can’t find the $300-400 to buy one on eBay (or up to $2,000 for the 5-coin set!), check out these alternatives below. Remember, it’s all about getting the most silver for the least amount of dollars. We’ll assume a $300 price tag for a single ATB coin and the high average of the alternative when determining the discounts.

[image title="coinsilverlot_001" size="medium" id="417" align="left" linkto="" ]Roll of 1964 (and earlier) silver quarters
7.234 ounces of silver
At a fraction of the price of the new 5oz blowd-up quarters, why not get a roll of the originals? You’ll get more way more silver and won’t have any problem finding them. Live auction here.

Expect to pay: $190-230 depending on condition.
Weighted discount to ATB 5oz coin: 65%
Last completed auction: Last recent as of this posting

[image title="2204__orig" size="medium" id="413" align="left" linkto="" ]5oz Pan American Silver Bar

It’s not government-backed, but buying bullion from widely recognizable refiners will make it super-easy to sell or barter. You can probably buy 10oz worth of boring bars for the same price of one boring 5oz ATB coin. Live auction here.

Expect to Pay: $150-170
Weighted discount to ATB 5oz Coin: 43%
Last completed auction: Last recent as of this posting






[image title="IMG_20110120_184949" size="medium" id="421" align="left" linkto=""]Falkland Islands 25 Pound Commemorative
4.46 ounces of silver

Talk about massive. This puppy is a whopping 65mm coin that will make an 5oz ATB issue (~40mm) cower and hide. Way, way cool. I was lucky enough to grab a few on eBay for about 20% under spot. Live auction here.

Expect to Pay: $120-150
Weighted discount to ATB 5oz Coin: 50%
Last completed auction: Last recent as of this posting




[image title="5ozlibertad" size="medium" id="435" align="left" linkto=""]5oz Mexican Libertad

This well-recognized bullion trades at a premium to spot, but still far more affordable than the ATB varieties. Like the Falklands coin, it’s also a massive 65mm which is sure to impress. On top of that, they shouldn’t be too difficult to find. Live auction here.

Expect to pay: $200-$240
Weighted discount to ATB 5oz coin: 20%
Last completed auction: Last recent as of posting






[image title="10kpesetas" size="medium" id="439" align="left" linkto=""]10,000 Spanish Pesetas Commemorative
5.0183 Ounces of Silver

A few of these pop up on eBay now and then because there are over 125,000 minted of the 5.018 oz variety and another 15,000 minted for the ’94 design that has 4.98 ounces. Unfortunately there’s not a lot of auction history recently.There’s one live on eBay right now which will give us a good idea. You’ll get a touch more silver than the ATBs for what should be a slightly reduced price. I’ll update this when the auction ends.

Expect to pay: $150-200? (Watch the auction)
Last completed auction: Didn’t sell at $340

[image title="lunar5oz" size="medium" id="450" align="left" linkto="" ]2011 Australian 5oz Lunar Rabbit

Like the Libertad, the Lunars trade a bit above spot on their own, but they have fantastic availability. Unlike their Mexican counterparts, they have different designs each year (based on the Chinese Lunar calendar) and some trade for more than others which is an added bonus if you’ve happened to grab a more popular year. The live auction is a multi-coin buy it now matching the last completed auction I found.

Expect to pay: $190
Weighted discount to ATB 5oz coin: 36%
Last completed auction: Last recent as of this posting

[image title="pitcairnsilver" size="medium" id="463" align="left" linkto=""]Pitcairn Islands Constitution Commemoratives (1988-1990)
4.9974 ounces of silver

This commemorative has a total mintage of just 22,500 over three years and represents a country with a population of 50, yet still manages to be cheaper than the ATB coins with the same silver content. I would hardly call this widely available, but it’s still an interesting piece because of how unbelievably small the country is. Live auction here and here (non US sellers). An auction from a US seller couldn’t get $199 recently.

Expect to pay: $200-230
Weighted discount to ATB 5oz coin: 23%
Last completed auction: Didn’t sell at $199

When you look at the options available, including government-backed bullion, private refiners, junk silver, and foreign commemoratives, it’s a wonder why we’re seeing the frenzy over the 5oz ATB sets. After all, the series is going to be sold for 11 years!If you’ve got an idea for an available alternative (has current/recent auctions), feel free to post and let us know what we can add to the list!

By now, you’ve probably heard about the giant white elephant in the US economy – the $14,300,000,000,000 legal ceiling of debt the US can have any any given time (we’ve just crossed $14T). Time after time, congress raises the limit as a customary function of government without much fanfare, but over the next few months we’re likely to see this be a front-and-center issue among the American public. Although a recent poll shows 71% opposition to raising the debt ceiling, it should almost be considered a certainty that it will be increased sometime this spring.

For starters, the US would likely see its pristine credit rating drop. If the US could not continue borrowing, the likelihood of default becomes higher and you’d see major declines in the dollar against other currencies. Interest rates for government borrowing would skyrocket, compounding the problem. Massive, crippling cuts in government services would have to be enacted almost immediately, including law enforcement and defense. Taxes would increase dramatically, not unlike Illinois’ 75% increase in state income tax. Anyway you slice it, it’s a bad, bad thing, and the fact that such a large portion of the US public appears opposed to preventing this is going to make lawmakers and markets nervous. That nervousness, that thought that there’s even a slim possibility that the US government’s free lunch is over, could keep silver moving higher for several months.

Intrade prediction markets are always a good indicator of where real money is being wagered on political issues. Intrade betting is now showing a 14% chance of the ceiling being raised to greater than $15.1T in February, 56% in March, 70% in April, and 69% in May. Clearly, the balance of the bids suggest that it would be a global shocker if the ceiling isn’t raised.

The issue is really a political one, not an economic one. The newly-reintroduced GOP, led by a wave of anti-big-government and teaparty activists, was elected by a vocal public that is frustrated (rightly so) with our current level debt and waste in Washington. They have to appear receptive to their constituents and at the same time have to be aware of the Armageddon-like consequences should the debt ceiling actually stand firm. They have to appear like there’s a debate here. I wouldn’t be surprised to see several ‘NO’ vote intentions leak out early on only to end up ‘YES’ votes during the final tally. Take these recent comments from Republican Lindsay Graham (R-SC) “On the spending side, I’m not going to vote for a debt ceiling increase unless we go back to 2008 spending levels, cutting discretionary spending“. Or a straight rejection from Michelle Bachman (R-MN) “[I'm] not in favor of raising the debt ceiling“. Compare that against the words of one Austan Goolsbee, chairman of the White House Council of Economic Advisors: “If we hit the debt ceiling, that’s … essentially defaulting on our obligations, which is totally unprecedented in American history….The impact on the economy would be catastrophic.”. Democrats, on the other hand, are vocal in their support of raising the ceiling, but worry their support sends the public a message that they’re not steadfast debt-busters like the GOP. I think that’s why you don’t see more energy on the pro-raise side. Apparently it’s better to default than to make one’s self vulnerable in a primary. Goolsbee is stating the obvious, and everyone knows it. The fact that we’ve got people outright supporting default is frightening. We’re all in favor of reducing the national debt, but we can’t do it in a couple months and a couple months is all we have to make a decision on this ceiling. Shame on both parties for screwing this up yet again and picking the wrong fight.

[image title="US Dollar Index and Debt" size="full" id="390" align="none" alt="US Dollar Index and Debt" linkto="full" ]
At what point does our debt become too ridiculous to support the currency? $20T? $50T? I think we’re already there.

That all considered, there’s no winner here. If the ceiling gets raised, we avert economic disaster, and we’ve got a new ceiling at $15T, $16T, or whatever it comes to. In fact, the ceiling has been raised ten times since 2002 at an average of around $800B per raise, with the February 2010 raise of nearly $2B being the largest in history. If the ceiling doesn’t get raised, the US changes dramatically overnight. With any outcome, the reality is that the dollar is becoming very, very weak and all the media attention that is pouring into this issue is only going to magnify that. The 2011 IMF forecast has the US debt to GDP ratio at 100%. The wheels are already coming off, and it’s not just the US (think Greece [130%], Portugal [97%], France [99%], Japan [204%]). At some point every major fiat currency is going to be worthless. Does it really matter where the debt ceiling is when our debts will soon exceed our GDP anyway?

Silver, on the other hand, cannot be manufactured out of thin air, even though the likes of JPMorgan, HSBC, and their cohorts at the COMEX have been trying. It is universally recognized. It is a store of monetary value and an important industrial metal. As paper currencies fall, silver is still the cheapest ‘precious’ metal in town. As the ‘debate’ about whether to increase our debt ceiling another trillion bucks gains steam, expect the reality to set in with more and more people and expect silver to appreciate rapidly. The silver market will become less and less about supply and demand internals and more a simple comparison of real value versus an avalanche of debt. Ironically, political bickering and maneuvering over the debt ceiling is only going to bring more visibility to just how much debt we have, which will only serve to reinforce the safety and true value of silver.

I got this piece on eBay a while back at a pretty good price for the silver content. I haven’t seen a lot of these, so I figured I’d share with the world. It’s an extremely unique design with very deep cuts and a clean matte finish. See the mini gallery after the break for some photos. It weighs just under 2oz on my cheapo scale, and is slightly bigger than a US Eagle. It’s created by Medallic Art Company of New York and edge-lettered with its hallmark plus ’999 fine silver’ and its unique numbered identifier which is fading fast with time (and one of the reasons I really, really hate edge lettering). They were issued in 1964 in both bronze and silver, and came with a really nice booklet about the Tercentenary. Out of all my bullion, it’s definitely one of the more interesting pieces I’ve got. I’ll have to work on finding some mintages on these to determine if there is any numismatic value, but it’s a nice change of pace from getting another Pan American bar or Canadian Maple. With silver prices and demand as it is right now, finding some lesser-known items is probably worth the effort.

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This guy on eBay has a lot of nice closeups of the bronze version, which looks identical to the silver in design but is a bit bigger and obviously made of bronze.

At the end of each year, there’s always some obligatory survey, list, or look-back from the best and worst of that year. It’s tried and true content. Unfortunately, I’m always late. I dont have enough time to write a full listing of each and every party that comes to mind as a winner and loser, but here are the ones I absolutely had to mention. Feel free to add your own in the comments.

Winners:

Ted Butler, from the feature film ‘I Told You So’

After decades of banging the drum on the issue of silver manipulation, it has to feel good for Mr Butler to see where we are now. Over $30. JP Morgan’s crime syndicate embarrassed and getting out of the business. Record demand for physical silver. A CFTC that seems receptive to common sense. It’s almost surreal. Here’s his latest commentary, explaining why things could be getting a lot worse for JP Morgan. Mr Butler deserves substantial praise for his efforts to bring transparency to the silver market whereas many others simply gave up on silver a long time ago.

[image title="Ted_Butler_pic" size="medium" id="339" align="none" linkto="full" ]
That’s confidence, my friends.

Silver ETFs, It’s Just Like Real Silver (in Electronic Form in Unallocated Accounts Reconcilable by Paper)

It’s no secret I really dislike most of the silver ETFs, especially the much publicized iShares variety. You aren’t  buying real silver and can’t get physical delivery or the security of a hard asset in times of crisis. There’s also a lot of evidence to suggest the silver claimed to be backing these funds isn’t really there. Still, the fund coffers are swelling. By the end of the year, there will be close to 500M ounces of silver ‘held’ in ETFs alone. According to forecasts that peg 2011 mine output at 769M ounces, we’ll probably reach a point in the not-too-distant future where ETF investments alone account for more than the entire worldwide output of silver.  We can only hope that the handful of  apparently legitimate funds out there, like the Central Fund of Canada (CEF), can stay legitimate in the face of a tidal wave of cash looking to get in. It’s a shame, but hard to ignore that ETFs were definitely a winner in 2010.

eBay, Now with 25% More Accurate Pricing than the Comex!

I’d be interested to know the total dollar volume of precious metals sales on eBay throughout the year. We identified back in the spring that the majority of the Bing! Cashback searches were precious metals-based, and the free cash from Microsoft was a big incentive for many to flock to eBay. Even after the well dried up, though, eBay appears as busy as ever with over 4,600 silver eagles alone on the site right now, with more than half commanding bids. The availability of silver cannot be beat, and the premiums have been pretty consistent. If you were buying $20 silver at $13 like I was, you have a fair chance of selling it at $40. If and when the eBay premiums end, that might be the best indicator we have that the COMEX market is finally representative of the physical market for silver.

Jim Rogers / Peter Schiff / David Morgan, The Fellowship of the (Silver) Ring

There are lots of analysts out there who at one point or another were bullish on silver, but these guys have been champions of silver for quite some time and have gotten plenty of attention over the last year. Rogers and Schiff are commodity-buffs that get a fair number of spots on CNBC shows, often playing defense against an army of dollar bulls and metals-ignorant zombies like Joe Kernen. Morgan, more of a pure-play silver analyst, has brought silver investing to the masses through social media circles and online features. Schiff and Morgan alone have over 10,000 twitter followers combined. These guys have been vital in educating the public that buying physical silver is the best way to fly. It would be difficult to consider these three gentleman anything other than winners of 2010.

Honorable Mentions:

Andrew Maguire – His explosive testimony to JP Morgan’s practices shocked the industry
Bart Chilton – Someone in the CFTC that seems to be amenable to fixing manipulation
Mining Companies – Look at some of their one year charts. Blew away the Dow.

Losers:

Jon Nadler, Avid Frequent Flyer

As we examined earlier in the year, it was a fairly awful 2010 for Mr Nadler. Making excuse after terrible excuse for his consistently bearish calls, silver closed the year at new multi-decade highs. Nadler, who at any given moment appears certain that the metals markets will collapse by virtue of (scrap inflows/ mine production / deflationary pressures /dollar strength / Nadler’s sheer will), must feel like he’s stuck in bizzaro world as all these ‘extremist’ types (myself included) watch silver and gold continue to rise as the United States leads the global debt parade into heights unknown. The damage Nadler has done to Kitco’s reputation may take years to repair.

JPMorgan / HSBC, Two Banks-a-Fraudin’

So after years of suppressing the price of silver, JP Morgan and HSBC have now been pwned by CFTC Commissioner Bart Chilton and one former JP Morgan trader Andrew Maguire (who was almost killed for releasing the information). Not only have the two banks hopefully gotten creamed on their short positions as silver has exploded higher (JP Morgan has recently ‘quietly reduced‘ a ‘large position’ in silver), the lawsuits are piling up for their alleged crimes and their credibility is all but shot. Stay away from any commodity with these guys’ name on if it.

United States Mint, Proudly Producing More Presidential Dollars than Any Coin in US History

Despite the fact that gold and silver were in unbelievable demand, bullion products like the US Eagles were suspended almost every other week for ‘lack of blanks’ from suppliers.  On top of that, they botch the rollout to the 5oz silver offering which effectively screwed the average consumer with price-gouging.  Any leadership that existed took a hit when the Mint’s director resigned on December 20th to take a position in the private sector. Oh, and for some unknown reason, they’re hardcore into edge-lettering now which has to really, really annoy collectors. My biggest problem with the Mint, though, is that they aren’t innovators. They get some mandate from congress and they produce an ugly, clunky solution in quantities 1,000x more than necessary. How about getting back to making a few unique, interesting pieces every year and otherwise supplying us with adequate quantities of bullion? After all, bullion sales only accounted for a small 72% portion of their revenues during Q1. =)

Kitco Metals, Parent Company of Jon Nadler

I can’t in good faith name Nadler a 2010  loser without also giving recognition to his employer, Kitco. Besides the fact that they havent dumped Nadler from his daily, and often grossly inaccurate metals predictions, they’ve also had some major flops in their product offerings. After a disappointing launch of their 2009 ‘signature’ rounds, Kitco’s 2010 version featured one of the ugliest silver rounds I’ve ever seen. Further, their much ballyhooed Rhodium sponge was a total bust. Besides the fact that Rhodium gained a whopping 0% in 2010, who decided it would be a good idea to push physically investing in a $2,600 metal soaked sponge bottle of powder? Making matters worse, the year ended with Kitco’s launch of its new 500oz cast silver bar. Yeah, a 34-pound bar that costs $15,000. Perfect for barter!

[image title="Rhodium" size="medium" id="336" align="none" ]
Rhodium: What a great idea for physical investment! In 2012, Kitco might opt to rollout Uranium pellets.

Honorable Mentions:

Jeffery Christian (CPM Group) – Admitted that ‘paper silver’ could exceed physical silver by a multiple of 100
CNBC – As gold and silver hit new highs, CNBC largely ignored coverage in favor of traditional equities
Warren Buffet – Went heavy into silver in the late 90s, and has regularly distanced himself from metals this year
The Environment -2010′s metals surge means more dirty mines and conflict in countries like the Congo.