Monday, November 20, 2006

Silver Bells, Silver Bells,... mmmm silver

Christmas shopping season is upon us once again, let the depression and desperation begin!

If you are an average Canadian, I suspect you have between 12 and 20 people to shower with useless gifts this year. Each one of those gifts. depending on your closeness or means will range from a token $20 dollar gift, to the “I don’t want to be in the dog house again this year” gift that ranges into hundreds of dollars. So what do you buy?

First look at who you are shopping for and remember what you bought them last year. Did you buy them something they actually used or was it something they will hide, return, or re-gift? Were you satisfied with what you gave them or did you buy something out of desperation that neither you nor the recipient liked?

Now consider silver and how it could make a really great gift. Now I’m not suggesting you give everyone a bar or a coin. Some of you might want to get lucky some time soon and bullion will not enamour your wife as much as a tennis bracelet would. (Why is it called a tennis bracelet, one would be nuts to play tennis wearing expensive jewellery you might break or lose?)

What I am suggesting, is that you find people on your list who would appreciate silver and would not immediately try to pawn it. I think valued employees might appreciate a 2006 silver maple leaf marking another of year servitude, oops I meant service ;) A Silver maple would make a nice token gift for a paperboys Christmas tip, A first Christmas gift for an infant and then you could then give one each year as an easy gift, think about your list someone will be appropriate. In every family or group of friends there are those who have a tendency to be pack rats or collectors, I’m just suggesting that you move to encourage such collecting into a useful and value generating direction. This is collecting theme is very prevalent in preteen males who will collect almost anything. Rather than give them a junky toy or something of no real value, start them on a nice collection of silver maples or fractional gold coins or something nice from the Canadian mint.

I’ve said before I’m not a big fan of collectable coins because of the premium you pay for them; however, in a gift situation they are certainly an attractive choice that has more intrinsic value than a pile of crap from Wal-Mart will ever have. Collectable coins with real gold or silver content are a great educational tool to teach the young or uniformed the true nature of money. Explain to them that it’s not a promissory note backed by nothing but a real asset that has intrinsic value that cannot be devalued away.

Royal Canadian mint coins have themes including animals, natural sites, butterflies (these are really beautiful coins that a young women or grandmother would appreciate ), the Victoria cross, the Canadian space arm all in silver. They also have more expensive gold coins ranging from the 1/25oz cowboy (I got one for fathers day) to much larger and pricy coins, they even have Platinum and Palladium coins which will certainly have novelty appeal. Just match the theme to the person and the size and expense to your price limit and they are sure to be a hit.

There are a number of online stores where you could get silver ounces from different countries, the Silver Maples, Silver Eagles, Libertads, Panda’s and Kookaburras, are all very nice looking silver products, that would make a nice silver coins of the world display for a young person. If you can't find a coin with an appropriate theme there are many art bars on the market, also don't forget historical coins that might mark an important time period in a persons life or a keen interest.

For savvier recipients or for larger purchases you could give a 5 or 10 ounce bar and a good silver book like Get the Skinny on Silver by David Morgan, (it’s one of books on the side bar of the site). The idea is to give something of real value that will continue to appreciate rather than a tie or a singing fish. If your gift turns out to be a hook to catch their interest in metals and investing, then you’ve given a gift that will be far more valuable than the gift itself. Even before I started actively buying silver I still would have appreciated gold or silver simply as a novelty and would have kept it. Other than a few silver dollars here and there, most people have never held anything close to pure silver or gold. Sterling earrings and 14 k. rings are a far cry from the wonder of holding a pure ounce of gold or a slab of silver.

I know for a fact that most wives will not be satisfied with this kind of gift so stick to gold or silver jewellery. There is a huge mark up over the bullion price on jewellery but when gold/silver are $2000 and $200 respectively you wife will appreciate the gift that much more. Beauty and real value outshines a gift that will be out of style next season. Women, while men are more likely to like a coin as a gift some may not. Men like shiney things too, consider a nice heavy chain.

Giving silver will give those you care for a real asset, give you a hook to educate them on real money, and will tighten the supply increasing the value of all the silver you have already bought. Of course, don’t forget to tell those who are buying for you that silver is a perfectly acceptable gift. As for me, you can send me a bucket of Pan American or Northwest Territorial rounds, I'll hug them and squeeze them and name them George.

2 comments:

Anonymous said...

Hi LOW,

Just found your spot. NICE!!

I thought I was a gold bug, but then
I held some silver, and it was all over.
Good thing, the wife likes it too.
I'm interested in your opinion on
silver coins like the morgan and peace
dollar, Kenedy 1/2 etc. I think I
am interested in circulated coins
that trade as close to spot as poss,
but that clearly have been (and are)
real money, as opposed to eagles etc.
Your opinion very welcome!

Keep up the great blogging.

Best, Matt

Lord of Wealth said...

Thanks Matt. I hope you come back and read some of the other articles and comment. I'm also amiable to guest stories from bugs on how they got the sickness.

As my title implies I'm Canadian so I personaly don't have more than a few American coins that ended up in Canadian circulation. I personally have Canadian silver dollars, 1/2s, and what ever other size of Junk silver I can run across. I personaly love my 1/2s but find people want silly premiums on worn, high count coins.

My opinion of the coins quoted is simple, if you believe in the dollar weakness arguement rather than the supply/demmand arguement than they are a nessesity. The worse case scenerio is paper could become worthless and having small, tradeable sized pieces of alloyed silver that can survive circulation is a nessessity!

I don't believe in paying high premiums for collectables as a major part of an investment. Individual pieces as part of collection is fine but survival coins need to meet seveal criteria.

1. recognition and acceptace
2. alloyed to circulate undamaged
3. various sizes to facilitate trade.
4. can be aquired with low premium.

So you are right, Eagles might be to big for all uses, and are far too expensive. Not that I don't have a few, likewise Maples but being 9999 maples cannot ever survive circulation.

Ease of access has been an issue in Canada, I can't find enough Junk silver and premiums are too high. The other option is rounds, while not meeting the survivablity or recognition factors have a reasonable premium.

If you can find low premium, circulated coins, buy them.
Thanks for the comment.
Kubera,
Lord of Wealth