A very good explanation on buying precious metals as part of your preps.
http://www.cmi-gold-silver.com/small-su ... coins.html

Buying silver, buying silver bullion for survival purposes
Coin silver and silver bullion also discussed

Investors buy silver coins, silver bullion coins, and coin silver for one of three purposes: as an investment, as an inflation hedge, or for survival purposes. Investors who buy for investment purposes look for price increases because of silver's supply/demand fundamentals. For example, in 1998 Warren Buffett purchased 129.7 million ounces of silver for Berkshire Hathaway, a holding company that Buffet heads.

Buffett's silver purchase, which became legendary among silver investors, was probably for investment purposes. However, it may have been an inflation hedge; Buffett did not say. In fact, Buffett said very little about his silver investment, even after he disposed of it. One thing is certain, however, Buffett did not buy 129.7 million ounces of silver for survival purposes.
Buying silver bullion as an inflation hedge

Investors who want protection against inflation buy silver and gold as inflation hedges. During the 1970s, silver and gold prices skyrocketed in response to price inflation that reached 13%. During the '70s, popular silver and gold investments included any form of silver bullion, from 1-oz silver rounds and pre-1965 U.S. 90% silver coins to 100-oz silver bars and 1-oz Krugerrand gold coins. When the Federal Reserve brought inflation under control in the 1980s, much of the silver bullion and the gold coins purchased in the 1970s were sold and the proceeds put back in paper investments.
Coin silver for the worst-case scenario

Investors who buy silver and gold for survival purposes fear the worst. Those fears include the Federal Reserve printing so many dollars that the dollar will become worthless, which is the history of all paper currencies not redeemable in gold or silver. Fear of a financial meltdown, which would close banks as in Argentina and Paraguay in 2002, is another.

Argentineans and Paraguayans who had to foresight to bail out of the banking systems and convert their assets to gold or coin silver were protected. Not only did banks close, but also when they reopened depositors were limited in the amount of money they could withdraw. Meanwhile, the Argentinean peso and the Paraguayan guarani sank in value. Shortly after those crises, Brazil defaulted on its international debt and its paper currency, the real, sank.

Those are the kinds of situations that investors who buy coin silver and small gold coins for survival purposes want to protect against. In doing so, these investors buy silver and gold in forms that can be used for money or to barter for goods and services.
Buy silver bullion and coin silver for barter
Small gold coins for barter

The best forms of silver for survival purposes are pre-1965 U.S. 90% silver coins and 1-oz silver rounds. The most useful forms of gold would be fractional-ounce gold coins, such as the 1/10-oz Gold Eagles, the 1/10-oz Krugerrands, the ¼-oz Gold Eagles and the ¼-oz Krugerrands. But, before going forward, it is imperative that we discuss which coins to avoid. That is because hundreds of web pages promote numismatic and collector coins, as well as foreign coins. Such coins are simply wrong for survival purposes.

If the time ever comes that silver coins and gold coins were again used as money, coins would be worth only their metal content. Numismatic (collector) premiums would disappear. Anyone using gold or silver coins to buy goods or services would not be asked, "What's the mint mark on your coin?" Nor will they be asked, "When was it minted?" The question would be, "What's the gold content?" Hand someone a St. Gaudens and tell him it contains .9675 ounce of gold, and it will be difficult--if not impossible--to convince him to accept it at more than .9675 times the price of gold.

Numismatic premiums are fleeting in normal markets. (See our Double Eagle coins page.); you may also want to read our Myths, Misunderstandings, and Outright Lies page, which exposes the tactics used by telemarketers. Numismatic coins are bad investments for the average investor anytime; for survival purposes, they are simply wrong.

If you ever need to use your silver and gold to buy goods and services, you will want silver coins and small gold coins. Additionally, those coins should have certain characteristics to ensure they are readily accepted. First, survival coins should be stamped in English. Most Americans do not read foreign languages.

Second, the coins should have their gold or silver contents stamped on them; except for the modern bullion coins, most do not. In an emergency, having the gold content stamped on a coin could go a long way toward causing someone to accept it.
Bartering with silver coins

If your furnace goes out in January, the local heating guy may have never seen a gold coin before. If you hand him a $20 St. Gaudens, how does he know it contains a little less than an ounce? If you try to get him to take British Sovereigns, how can you prove they contain .2354 ounce each? Try convincing the guy at the auto parts store that a French 20 franc contains .1867 ounce of gold.

Third, the coins you buy for survival purposes should contain amounts with which Americans are comfortable. Americans understand one-ounce, 1/2-ounce, 1/4-ounce, and 1/10-ounce coins. Americans do not easily grasp the concept of .2354 ounce or .1867 ounce.

For survival purposes, avoid arcane foreign gold coins. (Despite more British Sovereigns having been minted than any other coin, Sovereigns are not well known in the U.S.) Simply buy the popular modern bullion coins. Krugerrands are the cheapest and best known. American Eagle gold coins are also readily recognized in the U.S., but carry higher premiums (markups over spot) than Krugerrands.

Both Krugerrands and Gold Eagle come in four sizes: one-ounce, 1/2-ounce, 1/4-ounce, and 1/10-ounce. For more information, visit our Modern Gold Bullion Coins page. (If you have been told that bullion coins are subject to confiscation and that old U.S. gold coins and/or foreign coins dated before 1933 are exempt, you really need to read Myths, Misunderstandings, and Outright Lies.)

Another plus for Krugerrands and Gold Eagles is that both are basic bullion coins and sell at small mark-ups over the value of their gold content. Generally, however, Krugerrands carry lower premiums than Gold Eagles, but both Krugerrands and Gold Eagles carry smaller premiums than foreign coins of comparable sizes. And certainly, Krugerrands and Gold Eagles are cheaper than old U.S. gold coins.
Buy silver bullion or gold bullion?

Finally, the question arises whether to buy silver or gold. Probably both, but if you are investing $10,000 or less, go exclusively with one-ounce silver rounds or circulated pre-1965 U.S. 90% silver coins. Pre-1965 U.S. 90% silver coins are commonly called junk silver coins because they have no collector value and trade for the value of their silver content. If you are investing larger amounts, say $30,000 up, you may want silver and gold.

If conditions were to deteriorate to the point that silver and gold re-emerged as the preferred forms of money, you would want lots of small silver coins. If you were buying canned food, you would need silver coins because gold coins, even 1/10-ounce ones, would have great value. If you have only silver coins and need to buy something of high value, then you simply trade a larger number of silver coins.

At current prices, an investment in silver results about fifty times the bulk and weight than if the same investment were made in gold. Therefore, large investments in silver create storage and handling challenges for some people. If storage and handling is a problem for you, then go exclusively with 1/10-oz Krugerrands or 1/10-oz Gold Eagles for the first $10,000 or so. Still, try to have some silver coins on hand.
Buy silver bullion coins or junk silver coins?

The choice of the form of silver to buy for survival purposes is a toss-up between one-ounce silver rounds and junk silver coins. Rounds have their silver content and purity stamped on them. However, circulated pre-65 U.S. 90% silver coins once served as money in the U.S. and could do so again.

Actually, U.S. 90% silver coins were used for money in the U.S. as recently as the late 1960s, and many Americans remember using them. Yet pre-65 silver coins do not have their silver content stamped on them, but if the dollar were repudiated people would quickly learn the value of pre-1965 U.S. 90% silver coins.

If you are considering buying silver and gold for survival purposes and would like to discuss the matter or if you would like to know more about silver coins and silver bullion coins, call us at 800-528-1380. Our normal hours are 7:00 a.m. to 5:00 p.m. MST, Mondays through Friday. However, we often take calls before 7:00 a.m. and after 5:00 p.m.

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thank you.

For the benefit of our many members who have yet to purchase precious metals ( PM's) could you go through the process of determine spot price so that the first time buyers don't get taken by an unscrupulous dealer?

I would but my purchases was all made yrs ago.

Well, let me think here. The easiest way I know is this, a dollars worth of pre 64 uS coinage is roughly .75% pure silver(each coin is 90% silver. The spot this minute is $16.14oz, which would make a $1 worth of coins worth about $12.10 and you should expect to pay a bit above spot. That's how the dealer makes his(or her) profit. I would say $13.00 or $13.25 would be a fair price today. Another easy rule of thumb is 14 dimes makes 1oz of silver. Hope this helps.

Here is a nice calculator for silver, it stays on top of the current price and gives you a per unit price.
http://www.coinflation.com/coins/silver ... lator.html

There is a really good post over on Rawles's Survival Blog, http://survivalblog.com/, about PM's that should be of use to all who have an interest in this subject.

JWR,
I did some research after reading the recent "Making Change in a New Precious Metals Economy" article. The following will make it easier to determine the metal value of coins. Thank you for your great blog.

Ounces of silver in pre-1965 coins:
Silver bullion coin = 1 ounce
Pre-1965 silver dollar = .77344 (90% silver, 10% copper)
Pre-1965 silver half dollar = 0.36169 (90% silver, 10% copper)
1965-69 silver half dollar = 0.1479 (40% silver)
Pre-1965 silver quarter = .18084 (90% silver, 10% copper)
Pre-1965 silver dime = 0.0715 (90% silver, 10% copper)

There is no silver in most post-1965 coins, except the aforementioned half dollars, and in some proof sets:
Post-1965 clad dollar = weighs 0.260 troy ounce. (copper 88.5%, zinc 6%, manganese 3.5%, nickel 2%)
Post-1970 clad half dollar = weighs 0.365 troy ounce. (nickel plated copper- 8.33% Ni, 91.67% Cu)
Post-1965 clad quarter = weighs 0.1823 troy ounce. (nickel plated copper- 8.33% Ni, 91.67% Cu)
Post-1965 clad dime = weights 0.0729 troy ounce. (nickel plated copper- 8.33% Ni, 91.67% Cu)

Nickel coins:
Mid-1942 to 1945 (56% copper, 35% silver, 9% manganese)
1866 to present except 1942-45 weighs 0.1615 troy ounces. (75% copper, 25% nickel)

Penny coins:
1793–1857 (100% copper)
1857–1864 (88% copper, 12% nickel)
1864–1942 (95% copper, 5% tin and zinc)
1943 (zinc-coated steel)
1944–1946 (95% copper, 5% zinc)
1946–1962 (95% copper, 5% tin and zinc)
1962–1982 weighs 0.080 troy ounces. (95% copper, 5% zinc)
1982– present weighs 0.080 troy ounces. (copper-plated zinc- 97.5% Zn, 2.5% Cu)

Base Metal Content Values
(The following are as of February 2010. See www.coinflation.com for updated figures)
Pre-1965 silver dollar = $12.47
1965-69 silver half dollar = $2.38
Pre-1965 silver half dollar = $5.83
Pre-1965 silver quarter = $2.91
Pre-1965 silver dime = $1.16

1971-1978 Eisenhower Dollar = 18 1/2 cents
1979-1981, 1999 Susan B. Anthony Dollar = 6 1/2 cents
2000-2010 Sacagawea Dollar = 5 1/2 cents
2007-2010 Presidential Dollar = 5 1/2 cents

1971 to present half dollar (clad) = 9 cents
Post-1965 quarter (clad) = 4 1/2 cents
Post-1965 dime (clad) = 2 cents

1946-2010 Nickel (except 1942-45)= 5 cents
1942-45 Nickel= 91 cents

1909 to 1981 penny except 1943 = 2 cents (95% copper)
1982 to the present penny = 1/2 cent (97.5% zinc)

Thanks all! I need to go through our coinage and see what we have. I'm copying this entire thread to keep in my purse, so I can refer to it when I find a coin/coins. Thank you!

One of our members here, Natty Bumppo, owns a coin shop and would probably be the best choice for a member to contact with questions... JP