Sunday, April 7, 2013

Hanging Onto Franklin For Dear Life


I started stacking precious metals years ago, after a bad run in the stock market. In fact, it was in 2003. Ah, weren't those the good ole days? Silver was at $4.30 an ounce, gold was at $322. As they say... "if only I knew then, what I know now." But actually, having suffered ruinous losses in the stock market meltdown of 2001, I was all too happy to amass physical, and it was gratifying to see those shiny bits of gleaming real wealth accumulate into piles I could covet; wild fantasies of unimaginable riches rife in my imagination.

But after a few months, I started to grow bored with 90% silver. When I first started stacking, that was my preferred form of silver. I eschewed American Silver Eagles and larger bars, there was just something about holding handfuls of old coins, can considering the history they bespoke, that lent more meaning to owning them... beyond their intrinsic worth and their much ballyhooed ability to retain one's purchasing power in an era of rapidly depreciating dollar value.

So, after hitting up APMEX for a few $1000 face bags of various denomination coins, I began to grow restless. I mean, how many canvas bags can you pile into the closet before you begin to tire of inspecting their contents and assembling multiple coin album sets? I decided to go where no man has ventured before. Franklin Mint silver sets! I can hear the assembly shudder. "Yeh, Jethro," says Mama "the danged fool has up and gone an spent all the shine money on worthless damned doodads!"

In their defense, Franklin Mint has produced some spectacularly designed sets of medals (not coins) over the years, both in sterling (.925 silver) and pure (.999 silver). Their sizes range, for the most part, from smaller pieces up to 1000 grains, although most of the .999 were one ounces. I was able to find them on ebay for much less than the going rate for junk silver, sometimes capturing them for half of their melt value, but always for no more than eighty percent.

The detailed engravings on most of them, the marvelous depictions of historical men, women, and events, are enough to take your breath away if you're lucky enough to own a set or two. Particularly if decapitated presidents have grown passe. There is something for every interest, as these two collaborative collectors   have comprehensively compiled on their remarkable website http://www.franklin-mint-silver.com/

I figured back then that if I was purchasing them for a fraction of their melt value (common at that time) then I wouldn't be hurt holding onto them, despite the fact that they are somewhat despised in numie circles as tawdry "make-a-buck-off-the-unwitting-public" schemes. And that they are sterling, which somehow makes them harder to smelt than less pure junk silver? And thus less valuable? Meh... I'm not buying that.

My reasoning hasn't changed since when I first purchased them, and recent events have made my foresight  seem all the more prescient. Back then, I had decided to buy only those sets produced prior to 1980, and thus before the days when even Grannie's candelabra and heirloom placesettings were being melted http://www.amazon.com/The-Silver-Melt-Henry-Merton/dp/0025843605/ref=sr_1_1?ie=UTF8&qid=1365372401&sr=8-1&keywords=the+big+silver+melt

Thus, thanks to the indiscriminate melting down of God only knows how many of these finite number of sets, these limited edition albums and chests of gleaming little gems of artisan craft are even scarcer than one might conclude from their frequency of sales on ebay. Some of these sets might actually be becoming downright [b][i]rare[/i][/b]!  Always the redheaded stepchild of stackers, drawing more revulsion than even war nickels, these widely mocked sets may yet have their day in the sun.

Consider two compelling reasons that this could occur.

1) Franklin Mint sets were never issued as currency, nor meant to circulate in any sense as pieces worth bartering. Thus they make an ideal form of silver for hoarding by the crafty as a coyote, under the radar silver stacker who fears that confiscation of silver and gold might someday occur. Should that happen, do you really think they're coming after your Franklin Mint sterling silver set of mini-automobiles too? Really?

2) A wave of counterfeit coins (they've been around for a decade, but only recently seem to be getting acknowledged as they continue gaining more public exposure) is beginning to besiege the silver investment pool. The extent of the production numbers and breadth of coin types being duplicated seems all encompassing, but limited to the extent that they prefer to replicate government issued coinage. Let us indulge in some critical thinking.

What "coins" would be most likely to be scorned by the Chinese in their drive to profit by fabricating faux products? Their main emphasis will be a push into producing the most popular type coins sought after by investors... Morgan's, ASE's, junk numies, etc. They will not try to imitate Franklin Mint 200 piece  medallion sets of locomotives, sailing ships, scenes from the American Revolution, etc, that few consider worth having, as they can much more easily make coin by making coins.

And one more

3) You can always melt it down for its troy ounce content if there are no other buyers around that appreciate it for its own merits when it comes time for you to sell.

So... Franklin Mint sets represent a form of silver that is easy to hoard, under-valued, frequently under-priced, and very possibly the least likely form of silver to ever be counterfeited or confiscated.

I don't think I'll sell mine anytime soon, thank you.


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