When fiat is a store of value

C

Cardtheorist

New Member
If fiat is physically held in common coin, it retains value. This allows for both the value of a hard asset during hyperinflation while being able to be used under normal circumstances. It would be best to pick the best bang for the spot value-usually the lowest denomination coins. This avoids some problems but there are obvious problems-storage, spending practicality, procurement. Just a thought.
 
I was thinking about low denomination coins like pennies. Junk silver seems to carry a higher premium than .999 silver rounds
 
I can tell you are new to this without even looking at your post count.
Have you managed to have a look at Greg Manarrino and USAToday on youtube?
I think you will enjoy them
 
Cardtheorist said:
I was thinking about low denomination coins like pennies. Junk silver seems to carry a higher premium than .999 silver rounds
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Should be able to get it at spot or less. (Pirocco(?, I think) says he can source it for much less than spot at times.)

This lot is at 5% under spot for example.
 
99.999 percent of the world population have no faith in silver currency.
Thats not to say it doesn't have value becuase it has value just like USD NZD and USD and I have silver and gold just like you probably have.

However as soon we talk about premium, we are not talking about its actual value but a manipulated price (premium) one believes it has ie a collectable but like unused stamp.

A good example would be if we were in Utah USA where silver and gold is legal tender and in burger store we buy a hamburger and I pay with 1988 silver ASE or pay them $20 note and ask for change in silver.

I think there would be an arguement about change because silver as money is only worth spot but I'd value 1988 ASE higher and if the shop paid me in silver junk coin but value junk silver at more than spot value.
 
Yep, I'm a noob. The online dealers seem to be charging more for silver junk than rounds, although they can be had for cheaper in some places. My local coin shop charges the equivalent of $1 over spot for junk. I haven't found any good deals locally (got scammed by a guy, he also sold his China fake stuff as authentic) and everyone charges more than online dealers. But in regard to the original post, I meant for example, zinc US pennies. I doubt their value would go up particularly much in hyperinflation , but would fare better than paper currency. I have made a bit on the side buying in dips and selling on highs at least :)
 
Cardtheorist said:
Yep, I'm a noob. The online dealers seem to be charging more for silver junk than rounds, although they can be had for cheaper in some places. My local coin shop charges the equivalent of $1 over spot for junk. I haven't found any good deals locally (got scammed by a guy, he also sold his China fake stuff as authentic) and everyone charges more than online dealers. But in regard to the original post, I meant for example, zinc US pennies. I doubt their value would go up particularly much in hyperinflation , but would fare better than paper currency. I have made a bit on the side buying in dips and selling on highs at least :)
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Becuase you refer to junk silver I presume your in USA so not sure what the normal mark up is, but here in Australia "junk" silver is called predecimal and prices varies widely from below to above depending on condition and popularity at any given time.

Also remember in hyper inflation it isn't only metals that go up in price everything increases in relations to the money
 
Ipv6Ready said:
99.999 percent of the world population have no faith in silver currency.
Thats not to say it doesn't have value becuase it has value just like USD NZD and USD and I have silver and gold just like you probably have.
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Silver doesn't have value like USD or other fiat currencies. The keyword is fiat... i.e., by decree:
Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of.
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or
Underpinning the value of money
Fiat currency is legal tender whose value is backed by the government that issued it. The U.S. dollar is fiat money, as are the euro and many other major world currencies.

This approach differs from money whose value is underpinned by some physical good such as gold or silver, called commodity money. The United States, for example, used a gold standard for most of the late 19th and early 20th century. A person could exchange U.S. currency -- as well as many public and even some private debts -- for gold as late as the 1930s.

A fiat currency's value is underpinned by the strength of the government that issues it, not its worth in gold or silver.

http://www.fool.com/investing/gener...ncy-what-it-is-and-why-its-better-than-a.aspx
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That is just Semantic in the context of above in the current real world. We are talking about made up value of so called premium
In real world gold or silver have value just like copper or sand, meat or butter and all behaves like currency in so far as having price which is spot.

The thing that is different is that 99.9999 percent of people don't value silver as money. Even in states of USA where it is real tender currency like Utah and Texas.

SpacePete said:
Ipv6Ready said:
99.999 percent of the world population have no faith in silver currency.
Thats not to say it doesn't have value becuase it has value just like USD NZD and USD and I have silver and gold just like you probably have.
Click to expand...
Silver doesn't have value like USD or other fiat currencies. The keyword is fiat... i.e., by decree:
Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of.
Click to expand...
or
Underpinning the value of money
Fiat currency is legal tender whose value is backed by the government that issued it. The U.S. dollar is fiat money, as are the euro and many other major world currencies.

This approach differs from money whose value is underpinned by some physical good such as gold or silver, called commodity money. The United States, for example, used a gold standard for most of the late 19th and early 20th century. A person could exchange U.S. currency -- as well as many public and even some private debts -- for gold as late as the 1930s.

A fiat currency's value is underpinned by the strength of the government that issues it, not its worth in gold or silver.

http://www.fool.com/investing/gener...ncy-what-it-is-and-why-its-better-than-a.aspx
Click to expand...
Click to expand...
 
In 2011 the 20c Australian coin was worth something like 11 cents to melt if I remember correctly. In a hyperinflation scenario a RAM bag of $100 of 20c Bradman or other coins will hold up and you're only out face value of nothing happens, you just cash them in. You don't need much hyperinflation before the makeup of the coins changes and 20 cent coins become round 50s and round 50s become $50 notes.

But if you're banking on hyperinflation your with the wrong bank.
 
phrenzy said:
In 2011 the 20c Australian coin was worth something like 11 cents to melt if I remember correctly. In a hyperinflation scenario a RAM bag of $100 of 20c Bradman or other coins will hold up and you're only out face value of nothing happens, you just cash them in. You don't need much hyperinflation before the makeup of the coins changes and 20 cent coins become round 50s and round 50s become $50 notes.

But if you're banking on hyperinflation your with the wrong bank.
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Yes, that's exactly what I meant. It would be a way to retain value, albeit not a practical one (imagine a basement full of pennies). I don't think hyperinflation is going to come in the short, or even medium term. But that $20T debt's interest alone is trouble. A lot of commodities rise in value during hyperinflation; I don't know if PM's do so particularly much in those cases. I was reading up on Hugo Stinnes, a guy who made a lot off the Weimar inflation. Essentially, he took lots of debt before the hyperinflation and invested in productive hard assets and commodities (and offshore gold), and paid the debt back with the worthless mark. 90% silver has a higher premium here in the US than rounds. It used to be lower a few years back. I think I'll wait till perhaps mid and end year before buying any more, at tends to dip around then.
 
Ipv6Ready said:
That is just Semantic ...
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It's not just semantic, it's that you don't understand the concepts of value.

But I'm sure you'll keep on pontificating to ensure we are enriched by your wisdom in such things. :lol:
 
Fiat, a by governments watered (a theft scheme) value - asset, is ok to trade value and not ok to store value (reason just given).
Protection against this storage-based theft is only possible by trading it for other assets until it's spending time.
And that trading for other assets, has to be done at an ok-price of them.
So ultimately, the element that stores value, has nothing to do with the asset, but with the person trying to store value's trading decisions.
The focus on asset as such, is thus totally wrong. Storing value succeeds when the person intending to save trades at good prices of good chosen assets. Buy cheap enough and/or sell expensive enough (inflation rate) is keeping and buy expensive and sell cheap is giving away.
Before, during and after this process, that physical common coin just sits there dead.
 
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