Why is Junk Silver valuable today?
When we hear the word “junk,” the image of a valuable silver coin doesn’t immediately come to mind. The word “junk” is typically considered a negative adjective – “my car is a piece of junk” or “I’ve got to clean up this pile of junk.”
But when we’re talking about silver, “junk” takes on an entirely different meaning…
Junk silver basically refers to coins that have absolutely zero numismatic, or collector value. Their value is based strictly on the metal they contain and nothing more. When you buy junk silver quarters, dimes and nickels, you probably notice how most of the coins look really worn. This isn’t a bad thing since these coins have been around for decades and once served as standard currency.
The most common junk silver coins in the U.S. consist of quarters, dimes and half-dollars, but other lesser known junk silver (U.S.) coins include the Morgan and Peace silver dollars. Technically speaking, Canada and the U.K. have junk silver as well, but the pre-65 U.S. coins are by far the most common.
The Coinage Act of 1965 changed the metal composition of quarters, dimes and half-dollars
Quarters and dimes today don’t look any different from the pre-1965 coins, but if you “thunk” both coins on a counter-top or table, you will immediately tell the difference. A quarter or dime from before 1965 will have distinct sound…
In the mid-60s, the price of silver was rising dramatically, which was due in part to the steadily eroding value of the U.S. currency.
In response to this, the Coinage Act of 1965 was enacted in July of that year. Signed into law by President Lyndon Johnson, the Act eliminated silver altogether from quarters and dimes. The silver content for half-dollars was reduced from 90% to 40% where it remained for another few years. The Act also authorized the Secretary of Treasury to continue striking 90% silver coins for up to five years. This authority was exercised only in 1966, but the date stamped on the coin remained 1964.
Once the Coinage Act of 1965 went into effect, Gresham’s Law was most certainly realized. This basic economic law essentially means that bad money will be spent while good money, meaning units with inherent value, will be closely guarded.
Therefore, once the silver was taken out of quarters, dimes and half-dollars, the coins from 1964 and before quickly disappeared. This of course marked the birth of a new industry – junk silver.
Junk silver today – a preferred option for small investors and survivalists
Today, junk silver quarters, dimes and half-dollars are preferred by investors due to their low premiums, high recognition and small units. Many believe these coins will come in handy in the event they’re needed for barter.
Even with silver’s dip below $20 per ounce, a 90% junk silver quarter is still worth roughly $3.70. When silver spiked to near $50 a couple of years ago, a junk quarter was worth more than $6!!
(See how these coins have held their value and helped preserve purchasing power by reading The Amazing Purchasing Power of Silver – 1964 vs. Today)
The reason these coins are so valuable today is the same reason we’ve cited literally hundreds of times – the eroding value of the U.S. Dollar. Many investors believe this erosion of value will continue, which will make owning junk silver and other coins even more attractive.
What Do You Think?
Do you own any 90% junk silver coins?
If so, are they mainly for investment or for barter?
What drew you to these common, yet historic coins?
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