I’ve been out of the silver market for a year, now, partially because I had picked up what I think appropriate (or, all I could afford to put into it!) and the movement has been a little too erratic for my tastes to recommend to anyone else. That’s certainly one way to put a strong suspicion that there is both hankying and pankying at some level. Todd pointed out today that gold is off about 6 1/2%, so let’s muse over whether you might want to put some money in physical silver if you have trades ready to close out or uncommitted investment funds. Platinum is still strongly out of ratio with gold although it is very dense storage, indeed.
I emphasize physical silver because that is my choice for long term storage of current value as well as an excellent form of “money” should the dollar crash or we go through a period of what is called “social unrest” or TEOTWAWKI, depending upon one’s view. We may or may not get The End Of The World As We Know It, as depicted in James Wesley, (sic) Rawles’ Patriot or The Day the Dollar Died and Lights Out, by “half fast,” both available gratis on line. That possibility is why we store “beans, bullets, & bandaids” lest bad go to worse and worst. Food stores should be rotated, and if Happy Days are ever here again, most of your stores will be good for something. If, however, we have riots, martial law, and empty grocery store shelves an ETF for silver will have precisely the same value as fiat currency, bonds, or shares in Google, i.e., none.
My silver is stored in the form of classic tableware, pitchers, and tea services because that preserves some combination of intrinsic, artistic, and/or historical value at all times. At present a chest full of heavy, prestigious King Edward is worth more for the silver content than it is as eating utensils! Better, the sort of people who are devouring the stored fat of the past fail completely to understand that we never sell such things, particularly not in times like these. Courtiers for the Romanovs did not expect to become refugees, and neither did Jews in Germany in the early nineteen thirties. In unsettled times–and ours certainly qualify–it is common sense to have some readily-exchangeable form of wealth handy in case you must flee NYC.
I suppose you are familiar with e-Bay? That’s where we’re going to hunt, although pawn shops and estate sales can produce finds, too. Start browsing and marking sets to “watch.” You need to get a feel for what is available and what the usual price is, because you’re going to spend some hours waiting patiently in front of your mouse hole to pounce. There are a lot of people who search e-Bay assiduously for bargains, but they don’t find them all. A lot of my best buys came when I logged on in the small hours of the night, brought up “sterling flatware” and told the machine to sort by time remaining. You may well find a goodie with only a few minutes left, so how do you decide on the instant what to bid?
You need a couple of conversion charts and some guidelines. First, Troy ounce is approximately 9% more weight than Avoirdupois, but the easy way to figure that is Av – 1/10th of itself. I’m sure serious dealers are still putting the weight in for you, but if the ad does not specify Troy assume it is Av. If you are offered 80 ounces, take off a tenth. If it turns out to be Troy you get an even better bargain. Next, you have to calculate weight times Spot. You could round to the nearest 50 cents but that’s sloppy. It doesn’t take that long to calculate 1-9 oz in Spot, then move the decimals as needed to get the price of 72 ounces, say, of silver. Have a scratch pad handy. If silver is $18.61, your chart will tell you 7 ounces are worth $130.27, and that 2 ounces are worth $37.22. For those of you who genuinely understand arithmetic, be patient, because most people don’t. Move the decimal one place to the right to get 70 oz = $1302.7(0) and add the other figure. The value is $1339.92. If you’re picky, deduct the $25 or so shipping and insurance will probably cost, although that is far lower than the sales tax you would pay in your home state. Put in your bid accordingly. I’ll give you tips on that later.
What if there is no weight given? Ah, that’s where familiarity with silver patterns is a big help, because they range from light weight, such as Camellia, to medium weight (the lovely Heiress and Chapel Bells), to massive, such as my Vienna. I’ll give you a list of patterns you can buy any time the price is in the right range. As a rule of thumb, calculate an ounce per piece, not counting demitasse spoons, pickle forks, or berry forks. Sugar shells run a little lighter, but serving pieces are much heavier. If you know nothing else about a 72-piece set than that the manufacturer is good (Towle, International, Oneida, Lunt, Reed & Barton, and so on) you won’t get burned badly if what you get is lighter than usual. Beware of sets a century old, because in general they are much lighter. For resale as sterling table ware later a monogram is a black mark, but if it ever has to go into the melting pot the engraving will never matter. Stay away from German silver which can be as low as 80%, and ask questions about silver from Mexico.
ANY time you see Rose Point, Grand Baroque (ugh), King Edward, King Cedric, Buttercup, Sir Francis, Royal Danish, Damask Rose, Eloquence, or a pattern you know, bid with confidence. You aren’t likely to get a bargain in Royal Danish, which is very heavy, although I’ve done it. Bear in mind that there are stinky people who will attempt to run your bid up to see if you’ll drop out or just to cost you money. Don’t play that game past your predetermined point. e-Bay will keep your highest bid secret, revealing only the amount necessary to keep you in the lead. In general, if I see something promising with 5 days left to go I do not bid on it. I don’t want others to notice it. If the bid is “going down” at a time that isn’t convenient for me I’ll put my top bid in. Other than that, be there to watch about 15 minutes before the auction ends.
At the current price of silver you can expect a nice set (service for at least eight, preferably 12 -16, minimum 4-piece dinner setting [luncheon is shorter and lighter] composed of salad fork, dinner fork, place knife, and tea spoon. Desirable upgrades are butter knife, soup spoon, and iced tea spoon) to run about $75/4-piece place setting and up. Because we’re figuring 4 ounces for that, of course. I got the Damask Rose for 16 I bought a week ago for $1500, and could have done better except my friend asked me what it was worth, not what I would offer him for it.
As a basic investment you’re looking at $1500 to $2000, then, but what you’re figuring on is getting silver at very close to Spot. This gives you a built-in profit of about 20%, that being what you would pay in sales tax, mintage, and a coin dealer’s overhead. IF you do not own any sterling at present…smile, and bid up to that extra 20% – shipping if you really love it. Your first set can become a family heirloom as well as a hedge against disaster. Your wife will be stunned by such a gift for Christmas, which will be terrific if she disapproves of your trading. Some do! Occasionally you will find commemorative 10-ounce ingots at about Spot.
Your side bet is that this is “just an exceptionally big bump in the road” and that in time your purchases will be revalued in terms of being silverware or a tea service worth at least three times what you paid for it after adjusting for inflation or perhaps conversion to a new currency. An additional measure of safety is that gold gets confiscated from time to time but I have never heard of a moratorium on possessing forks, knives, and spoons.
The biggest question left is whether you want silver at close to $17/ounce. I wouldn’t hold my breath waiting for $13 silver, and I don’t expect to see it at $4 for at least twenty years, if ever. Some dealers will negotiate for Spot (since they’re cashing in what they bought for much less.) We could see c. $16.50 occasionally until the next move up, but my instinct is that I wouldn’t hold out for even $16 if I didn’t own silver. I regard silver as an indispensible part of your holdings, and if matters continue to deteriorate we may well see the support level at $19.53 before the end of the year. In theory it could fall back and trade between 15 and 17 again, but I would be very surprised.
Chuckle…you can’t go very wrong if you follow the guidelines and get a set or two. Use it daily, love it, and don’t put it in the dishwasher. Silver will give you enormous pleasure and, again: if it stops being the best protection against fiat currency, it will revert to being a thing of beauty and a joy forever.
Linda Brady Traynham
for The Mesh Report