US EAGLE SILVER DOLLARS  INVESTING AND COLLECTING 

HISTORY:  Some time before 1986 the US Government decided that most of their strategic stockpiles of metal, including silver, were no longer needed.  Rather than sell the millions of ounces stockpiled in bullion form, it was decided to mint and sell one ounce silver coins which would be a profitable and practical way to get rid of the stockpile.  It was decided to mint coins with a nominal value of one dollar, which made them legal tender and exempt from the state sales tax that was charged in certain states. The coins would be a composition of 99.93% silver and .07 copper, weigh 31.101 grams of pure silver, which is almost exactly one troy ounce.  Mintages of the coins and the approximate "dealer's buy" according to the year 2006 "Blue Book" are listed as follows: 

YEAR      QUANTITY ISSUED     UNC     PROOF
1986.........5,393,005                  $12   
1986S........1,446,778                                 $22
1987........11,442,335                 $10
1987S.......   904,732                                  $30
1988.........5,004,500                  $10 
1988S........  557.370                                  $30
1989.........5,203,327                  $10  
1989S........  617,694                                  $22
1990.........5,840,210                  $10
1990S........  695,510                                  $22
1991.........7,191,066                  $10
1991S........  511,925                                  $30
1992.........5,540,068                  $10
1992S........  498,654                                  $25
1993.........6,763,762                  $10
1993P........  403,025                                $110
1994.........4,227,319                  $10
1994P........  372,168                                  $42
1995.........4,672,051                  $10
1995P........  395,400                                 $135
1995W........   30,125                               $3000
1996.........3,603,386                  $30
1996P........  473,021                                   $35
1997.........4,295,004                  $10
1997P........  429,682                                   $50
1998.........4,847,549                  $10
1998P........  422,319                                   $35
1999..................                       $10             $22
2000..................                       $10             $22
2000..................                       $10             $22
2001..................                       $10             $22
2002..................                       $10             $22
2003..................                       $10             $20
2004..................                       $10             $20
2005..................                       $10             $20
2006..................                       $10             $20

DISTRIBUTION:  The uncirculated coins are always available the first week in January and are sold by the mint in huge quantities to "Direct Distributors".  These are coin and bullion dealers who are authorized to buy these directly from the mint but only in huge quantities.  When first released in 1996 the mint charged them a premium of $1.10 over the silver price, per coin.  The mint now charges $1.40 over the silver price.  The mint packages the coins in 25 tubes of 20 per tube, 500 coins to the hard plastic sealed case ("green monster").  The distributors  then sell the coins to regular coin dealers in those cases, usually 500-1000 at a time.   The coin dealers usually then retail the coins at about a dollar per coin over their cost, a little more or a little less depending on the quantity purchased.  Most all dealers make a two way market, buying the coins back at a little under what they would pay a distributor.  This varies, depending upon the silver price and the supply and demand for silver eagles, as well as the particular dealer's need and current inventory.  Since all proof and uncirculated eagles are virtually the same, competition among dealers both buying and selling is strong and the buy-sell between dealers is very close.  The proof eagles are usually released around June or so, and are available to anyone who wishes to order directly from the mint, one coin or 1000 coins or more, as there are no current restrictions as to the quantity one may purchase.

COLLECTABILITY:  These are large dollar sized coins issued each year since 1986.  They are a natural for collecting, big, beautiful and relatively cheap.  Many collectors in the US and throughout the world put away one or two (or more) of both the proof and uncirculated eagles every year for themselves and even their children and grandchildren.  They are also perfect for birthday, graduation, wedding, anniversary gifts and great stocking stuffers for the holiday season.  It is my opinion that these coins would make a great addition to anyone's coin collection.  It is very likely this series will go on for many,many years to come.  Some of the uncirculated and many of the proof coins have increased in value over the issue price which gives the collectors more incentive to collect all that are issued. 

INVESTMENT ASPECTS FROM A BULLION VIEWPOINT:  If you are a "Silver Bug" or a hard money assets buyer it is very foolish to pay $2.50 or  so over the silver price for a one ounce eagle coin coin when you canbuy that same one ounce for less than dollar over the silver price by buying a one ounce silver generic round or a silver bar.  You are buying (investing) because you think silver is a great hedge against  inflation or that silver will rise to $10-20 an ounce or more some time in the near future.  I can almost guarantee you that if silver goes to $10 an ounce that a silver eagle, a generic round, and a silver bar will all be about the same price.  Further, I believe that if silver goes over $20 or more an ounce that dealers will be throwing most proof silver eagles into that same melting pot.   This exact scenario has happened each and every time there has been a dramatic rise in either silver or gold bullion.  From a strictly bullion viewpoint paying the big premium for silver eagles is not a wise investing strategy if you  believe silver will rise dramatically in the future.  It would be much smarter to take that $1.50 premium per eagle and use it to buy more silver dollars or rounds. 

INVESTMENT ASPECTS FROM A NUMISMATIC VIEWPOINT:  This is a very popular series and has great appeal to many collectors.  If silver were to stay around $5 an ounce the silver eagles may be an item that would increase in price as other American collectable coins have. However, if silver goes to $10 the premium (collectors value) on  eagles WILL NOT be pushed up, but will be absorbed into the silver price.  This will be the same for most of the proof issues.  I firmly believe that $10 or more silver in the not too distant future is inevitable.  All the silver deposits in the world are very near the surface and most of that has already been mined.  In many places in the world, like India, silver is thought of as wealth or money and great amounts are hoarded on an annual basis.  Much of the silver used commercially in electronics, computers, photos, etc., is never recovered.  Many governments and banks have huge gold reserves (Fort Knox, etc.) but virtually no one has a large stockpile of silver.  When silver takes off, really big, most all the current numismatic value of eagles will fall close to zero.  During the "gold rush" of the early 1980's every semi numismatic item including common date silver dollars, barber half dollars, common commemorative half dollars, etc., went into the melting pot.  At that exact time the price of rare numismatic coins skyrocketed.  At this writing the older US commemorative half dollars have been stagnant for a long time.  One can purchase a gem BU commemorative half dollar with a mintage of less than 20,000 for under $500.  Old type coins and rare silver dollars are always sought after by collectors.  This is the way to go.   If you are strictly an investor stay away from "semi numismatic" items like silver eagles (and common US gold coins). 

CERTIFIED "SLABBED" HIGH GRADE SILVER EAGLES:  This is the latest game the promoters and telemarketers are playing.  They get common silver eagles, dates not important, send them to a "friendly" or even a respected grading service and for about $8 they get the eagles graded MS68-69 or even MS70.  Then the coins are promoted as a perfect coin or "finest known" to the naive, unsophisticated, gullible collector for $20 or $30 or more.  If you wrap a plastic slab around a $7 retail eagle it is still worth only $7 no matter what the grade on the slab reads.  More than 50% of the silver eagles out there are MS68-70 and no one with any real smarts really cares.  If silver goes to $10 an ounce or more, dealers will likely pay less for slabbed  coins as it takes time to crack them out of the slabs.  Same with silver and gold proof eagles.  They are all Prf 69 or 70.  Who cares?  Don't play this game! 

CONCLUSION:  Have fun collecting silver eagles.  They might even have some numismatic potential in the short term but any rise in silver  will absorb the numismatic value, not push it up.  Realize this and act according to your investing or collecting needs.  You could look at the uncirculated silver eagles as a "no lose" investment.  If silver stays low the coins will have some collector's value, probably will increase.  If silver goes way up, you paid a dollar or two too much per coin but will still have a good profit due to the rise in silver.  Such a deal!

 Note:  Sep 2006: the rise in silver to over $11 an ounce has killed most of the numismatic value on eagles.  The 1986 still has a small premium, and the 1996  a large premium.  Most everything I stated in the two previous paragraphs has been proven to be correct.  Silver hit $12.40 earlier and the premiums on silver eagles really shrunk. 

Art Arbutine  _Updated September 18th,  2006