Can I Earn a Higher Profit With Numismatic Coins?

It depends. If you are really knowledgeable about all the details and intricacies of numismatic coins, know all the ins and outs of particular coins or are an expert at spotting exotic coins, you certainly could make a killing in numismatic coins. This may be similar to owning a Strativari violin, a Van Gogh painting or a collection of rare wines. For the average investor though, numismatic coins may not be as suitable. What’s more, numismatic coins do not offer much in the way of protection against the risks that precious metals investments are supposed to alleviate (see section Should I store…, above). Other than bullion coins and bullion bars which are commodities having a price consisting of intrinsic value and usually almost nothing else, numismatic coin prices depend on a wide range of factors of which precious metals content is only a lesser part. Numismatic coins are graded and primarily depend on condition, but at the same time collector demand is a major ingredient in numismatic coin prices. If you invest in physical gold and silver bullion and bars as a hedge against any of the risks mentioned earlier (see Currency Risk, Market, Risk, Systemic Risk in the Should I Store… section, above), then you would not want to depend on normal and”sunny” market conditions all around to be able and sell your valuables. You would rather want to have something of raw material value that can be carried around without an air-conditioned container or a cushioned box and can easily be sold in the streets (or bartered, if needed).

For numismatic coins, the premiums charged -– not only over precious metals content, which is due to those other factors mentioned, but also over the “going rate” of comparable coins elsewhere – can, and do, wildly fluctuate with dealers being the ones usually making a killing in the process. Just watch a few commercials and the “incentives” to buy which include either ridiculous “specials” (percentage-wise) or “great” affiliate and multi-level marketing “opportunities”. Both were economically impossible, were it not for the outrageous markups numismatics dealers tend to charge. Also be aware of a number of “bullion dealerships” that turn out to be high-pressure selling outfits talking potential bullion buyers into numismatics because of the higher margin they can make on numismatics. (Many of these uninformed buyers who fell for the numismatics trick are still waiting to see any significant profits in their “investments”, even at today’s dramatically increased intrinsic values and high precious metals prices; please also read the Beware of the Pitfalls section.

How Do I Buy and Sell Physical Gold and Silver?
Do I Have to Pay Sales Tax (or VAT or Similar) on Precious Metals?
Should I store my precious metals locally or overseas?
How Much Should I Pay for Physical Bullion?
What Is a Reasonable Premium Over Spot?
Should I Buy Bullion Bars or Bullion Coins?
Should I Buy Bullion Online?
Should I Buy Bullion Over the Phone?
Should I Buy Bullion Using eBay or Amazon Marketplace?
Is Confiscation of Gold a Real Risk?
Are There Any Reporting Requirements for Gold or Silver?
Should I Buy Vaulted Allocated Gold or Silver?

What’s the Difference Between Bullion and Numismatics?

The term Bullion means precious metals in their commodity or bulk form, cast as ingots (or bars) in various sizes or minted into coins.

Bullion coins issued by countries, such as the South African Krugerrand, the Canadian Maple Leaf or the American Eagle, are nominally legal tender with a face value although their bullion value is much greater. Bullion value is determined by mass and purity.

The fact that bullion coins have a face value also has some significant tax implications in many jurisdictions (these are discussed separately).

Both bullion bars and bullion coins are commodity items and are valued for their very substance rather than grading, coinage year, collector appreciation or similar.

 

Numismatics refers to collectible coins, uncirculated or circulated in various conditions. These coins are collected for their rarity value; they may have bullion value but their price is based on numismatic value. Numismatic value is determined by coin scarcity and condition, the latter indicated by numerical grades ranging from 60 for a coin with scratches or a weak strike to 70 for a coin in perfect condition. The abbreviation “MS” preceeding the numerical grade stands for mint state. A numismatic coin in perfect condition would have a rating of MS-70.

While numismatic coins can have a significantly higher value per mass and, given the right circumstances, may offer a “more compressed” form of value, their price is largely determined by appreciation, taste or other subjective factors. These may vary, particularly in uncertain economic times when coin collecting may turn out to be the least of people’s problems and therefore rank low on the price scale. The nature of bullion as a pure commodity, on the other hand, addresses not just a hobby but basic economic needs of exchanging value, barter or even affecting outright payment and is a far better and more secure way of storing value reliably.

What Is a Reasonable Premium Over Spot?

During “normal” times, bullion coins and bullion bars sell at low premiums over spot. These premiums reflect the cost of refinery, minting, assaying, storage, insurance, distribution and similar production costs as well as a dealer markup that covers the bullion dealerships cost of operation and profit. If there are any taxes due on your purchase or if bullion is not bought locally over the counter, any taxes, shipping cost and insurance will be added. Barring any market irregularities, markups of 4% to 12% are the most common, and it is usually recommended to look for dealers that do not significantly exceed a premium of 8% over current spot price. If there is any significant uncertainty going on (like the Greek situation in 2011), street prices may very easily increase to 20% or even explode to 50% or more over spot. It is, therefore, good advice to buy the dips and load up on physical bullion during quiet times at the usual premiums and/or when the overall market takes a breath.

Tax considerations (see Do I Have to Pay Sales Tax… section, above) may influence your individual buying decision though, depending on actual total cost to you. Find out the total to be paid including premium, any taxes and shipping cost.

How Do I Buy and Sell Physical Gold and Silver?
Do I Have to Pay Sales Tax (or VAT or Similar) on Precious Metals?
Should I store my precious metals locally or overseas?
How Much Should I Pay for Physical Bullion?
Can I Earn a Higher Profit With Numismatic Coins?
Should I Buy Bullion Bars or Bullion Coins?
Should I Buy Bullion Online?
Should I Buy Bullion Over the Phone?
Should I Buy Bullion Using eBay or Amazon Marketplace?
Is Confiscation of Gold a Real Risk?
Are There Any Reporting Requirements for Gold or Silver?
Should I Buy Vaulted Allocated Gold or Silver?

Should I Buy Bullion Bars or Bullion Coins?

This is a matter of personal preference as well as your investment plan and overall economic situation. While bullion bars are generally cheaper in terms of premium over precious metals content, they are also larger (less divisible) and may in a severe situation be not as easy to sell as widely reckognized bullion coins. With large amounts to be invested, holding bullion bars makes sense. Medium-sized 100 gram gold bullion bars have almost the same low premium as the larger Kilobar variety and may thus be the choice for average investors. Smaller than 100 gram bars are not usually recommended for physical bullion investment purposes. Bullion coins have the added advantage of superb fungibility, particularly the popular internationally traded coins. In silver, it should be noted that silver bullion coins are treated more favorably than silver bullion bars and that there are a few more countries having silver bullion coins either totally exempt from VAT or sales tax or applying a low rate (e. g. 7% in Germany). This fact may also affect whether you buy bullion bars or bullion coins. (For details, see Do I Have to Pay Sales Tax… section, above.)

How Do I Buy and Sell Physical Gold and Silver?
Do I Have to Pay Sales Tax (or VAT or Similar) on Precious Metals?
Should I store my precious metals locally or overseas?
How Much Should I Pay for Physical Bullion?
Can I Earn a Higher Profit With Numismatic Coins?
What Is a Reasonable Premium Over Spot?
Should I Buy Bullion Online?
Should I Buy Bullion Over the Phone?
Should I Buy Bullion Using eBay or Amazon Marketplace?
Is Confiscation of Gold a Real Risk?
Are There Any Reporting Requirements for Gold or Silver?
Should I Buy Vaulted Allocated Gold or Silver?

How Much Should I Pay for Physical Bullion?

Precious metals bullion bars and bullion coins are commodities having intrinsic value. What they are worth is discovered by international commodities markets (gold spot market, silver spot market) and can be calculated exactly on the basis of precious metals content. That is what these pieces trade for, and there is a rather fixed amount they are “priced” at. Prices may vary locally only due to fluctuations in an underlying currency (which itself does not have any intrinsic value other than some governments “word of honor” which may well turn out to be zero) or due to local shortages in physical materials. As recently as October 2011, this has drastically been visible in Greece with bullion coins and bars selling in the streets of Athens at premiums of up to 40% over spot. This clearly demonstrates that physical bullion prices do fluctuate dramatically and that local market imbalances (either due to excessive demand, a sudden surge in demand or some actual supply shortages) immediately affect the actual paid price. In order to buy at a reasonable price, a lot depends on both timing (watch market price over a period of time) and finding sellers charging a fair premium (compare different sellers and their markups which can differ regionally; so you might want to watch prices at home as well as abroad).

How Do I Buy and Sell Physical Gold and Silver?
Do I Have to Pay Sales Tax (or VAT or Similar) on Precious Metals?
Should I store my precious metals locally or overseas?
Can I Earn a Higher Profit With Numismatic Coins?
What Is a Reasonable Premium Over Spot?
Should I Buy Bullion Bars or Bullion Coins?
Should I Buy Bullion Online?
Should I Buy Bullion Over the Phone?
Should I Buy Bullion Using eBay or Amazon Marketplace?
Is Confiscation of Gold a Real Risk?
Are There Any Reporting Requirements for Gold or Silver?
Should I Buy Vaulted Allocated Gold or Silver?

How Do I Buy and Sell Physical Gold and Silver?

Many vendors seem to strangely believe that you are somehow limited to selling back to them at a later time what you buy from them now. If so, find another dealer for someone telling you this sort of nonsense does not know the first thing about the thing he is selling. Precious metals bullion bars and bullion coins are not collectibles that need to be sold to special goldsmiths or coin shops. You may buy or sell them freely wherever they are offered. You may or may not want to sell back where you bought and it may be a nice to be able and re-sell to the same dealership at a later time, but neither any need nor any increased likelihood to do so. Rather, where you buy or sell is largely a matter of price.

Do I Have to Pay Sales Tax (or VAT or Similar) on Precious Metals?
Should I store my precious metals locally or overseas?
How Much Should I Pay for Physical Bullion?
Can I Earn a Higher Profit With Numismatic Coins?
What Is a Reasonable Premium Over Spot?
Should I Buy Bullion Bars or Bullion Coins?
Should I Buy Bullion Online?
Should I Buy Bullion Over the Phone?
Should I Buy Bullion Using eBay or Amazon Marketplace?
Is Confiscation of Gold a Real Risk?
Are There Any Reporting Requirements for Gold or Silver?
Should I Buy Vaulted Allocated Gold or Silver?
What Is a Monster Box?

Physical Gold & Silver

The time for precious metals is now — and continues to be, until the markets awash with paper money on one hand and the remains of a burst real estate bubble brought about by reckless monetary policy during the last decades on the other find equilibrium again. We are far from having arrived there, and gold and silver being literally only dumb pieces of metal are for investors who want the “insurance policy” until then. Physical bullion and bullion coins are free of counterparty risk, systemic risk and other risks that tend to materialize during uncertain times, and thus are for smart investors rather than just for goldbugs.

During uncertain times, investors buy physical bullion and bullion coins as a safe-haven investment, relying on the intrinsic value that will always be above zero — unlike paper money or stocks, both of which can fall to zero in a matter of weeks or even days, and throughout economic history repeatedly have done so.

Through our SoundMoney subsidiary, we offer both physical gold and silver bullion and bullion coins at competitive prices. We deliver worldwide via insured parcel or courier service. Due to our tax planning considerations and strategic business location we are in a position to offer silver bullion coins tax-free and without additional import duties for investors throughout all of Europe and tax-free physical gold and silver to American and international clients.

FREE Precious Metals Information

Owning physical gold and silver bullion and bullion coins may be the most prudent way to brace oneself for the economic impact that appears to be ahead. Adequate information and understanding the wider implications of doing so will be as important for physical bullion investors though.

We provide easy-to-follow FREE information for investors who already own physical precious metals or consider getting into this asset in the future. Both introductory and advanced subjects are covered and accessibly formatted into a few pages each. Our materials are available as inline text or for download as PDF-files.

The bull market in precious metals is still very much alive and running for roughly ten years now. Opportunities to buy into this market are still there and are increasingly used by institutional investors, governments, businesses and private households worldwide.

Market reports confirm this on a daily basis.

These reports need to be watched increasingly though as the bull market powers ahead. Every investment needs to be made with an exit strategy in mind. Holding physical bullion is no different. Markets move in cycles or wavs throughout history, and, to be very successful, it is essential to understand these movements and flow with them.

In our FREE materials, we cover different subjects about physical bullion investment and other asset classes. These are intended for beginners and advanced-level investors alike. Subjects include basic How Tos as well as experience from professional bullion dealers. Written by persons having real-life experience, these are true sources providing much of the information you need in order to not only protect your wealth but even increase it during the times ahead.

IMF’s Christine Lagarde Calling for Outright Government Theft

Christine Lagarde, chair person of the IMF, has called for making the “Cyprus Solution” of confiscating portions of savers’ cash in bank a common government policy.

Piggybacking on last week’s call by the IMF for setting up an agency that would be responsible for either closing or salvaging troubled banks across the continent, Mrs Lagarde’s proposed “funding” such an agency with money drained from savings held by bank customers. Mrs Lagarde’s ingenuity and arrogance seems to be boundless, to say the least. (It is equally obvious that her knowledge of real-world economics, on the other hand, is painfully limited.)

The proposed move which can only be seen as a departure of “civilised” nations’ governments from the rule of law is nothing short of an announcement that governments will be committing outright theft in the near future. Gone are the days when they at least tried to conceal their acts and disguise them in the form of taxes, even frivolous ones, for some “common good” — which in light of the real purpose for tax money being spent on, namely paying interest on bonds issued for central banks’ and private banks’ money creation also known as “fractional reserve lending”, had become increasingly questionable anyway.

Wolfgang Schäuble, finance minister of Germany, had already suggested that governments should help themselves at will after the Cyprus precedent earlier this year.

Under the proposed wider scheme, a suggested figure of ten percent of savings should be confiscated in order to bail out struggling banks (that are cash-strapped although they already hold client monies but only failed to manage their affairs properly). It should be noted here that client monies held at banks were already subjected to taxation (in order to pay for the ever-day business of the banks which is money creation through “fractional reserve lending”, resulting in inflation which is effectively another “tax” and takes another percentage out of the value of those monies; as a result, private households already paying twice for government and banking mistakes at present ought to be forced to pay for them out of their pockets for a third time). Any bank holdings, including even smallest amounts, ought to be affected equally.

Tiny little details like whose property cash in bank is and that savers are only loaning out their money to the bank to receive some interest in turn (or not) do not seem to matter here. Neither does property law (nor criminal law), as it seems.

Whether or not this is a good idea and will increase stability in society at a time of possible turmoil remains to be seen. One might be tempted to make an educated guess though (which obviously is a lot more than an IMF head is capable of).

That move should make it obvious to anyone that Asset Protection is a necessity for each and everyone, starting with “fortunes” as little as €500 or €1,000 or currency equivalent. No one likes nor can afford to lose ten percent of their holdings, be it an actual loss of €50 or €5m, and therefore needs to prepare appropriately for their individual situation. Suitable strategies include cashing out of any bank holdings, bonds, stocks, mutual funds, ETFs or similar — in fact everything that needs to travel as paper money through a bank account — and moving these amounts into tangibles. Real estate is only a partial solution as it may be heavily affected by any ensuing additional economic downturn (or breakdown) with prices particularly for overvalued residential properties vulnerable to severe corrections and losses. Commodities-based investments as well as anything of intrinsic value might be suited best for weathering any economic storm as is investing in businesses that provide essential products or services and will be operative even during “hard times”.