Learn About The Shortage Of Rare Silver Coins Directly At Rare-Coin.org
4 February 2010 – While most investors and numismatics know why there are so few pre-1933 gold coins available, not nearly as many know why there is somewhat of a shortage of rare silver coins. This problem has its roots at the very birth of the country’s monetary system, and it is one of the reasons why rare coins in silver are so valuable today.
The US Mint was founded in 1792 by an act of Congress. In addition to establishing the governmental entity known as the US Mint, it was decided that the coinage of the country would be minted in both gold and silver. The size of coins and the denominations would reflect the relationship of their values; this was a good idea, except the ration was wrong until 1834 when a 16:1 breakdown brought things into balance.
Unfortunately, that balance was short-lived; the Gold Rush of 1849 introduced a surplus of gold to US markets, driving down its price and throwing off the ratio with silver. This had the unintended effect of making silver coins worth more for their content than for their face value. Bullion dealers were able to gather large quantities of coins and ship them for a profit to Europe, where a silver shortage had existed for a number of years; in other words, many of the silver coins from the early history of the US wound up as currency in Europe!
This transfer of assets back then has made rare silver coins more valuable today because not as many of them exist as were minted. One of the key factors in the value of an old coin is its scarcity and these coins became scarcer when large quantities were melted down.
This transfer of coinage back then has increased the rarity of many older silver coins today. Thanks to the shortage in Europe and the California Gold Rush, certified silver coins from the early to mid-1800s are rarer and more valuable to investors today.
Shawn Penny
Senior Staff Writer - Rare-Coin.org
