I Care Not Whether My Gold and Silver Are Government Minted Coins

In my position working the phones at Money Metals Exchange, customers frequently ask me:

“What are the best coins I can buy so I have something I can spend if the dollar goes bad?”

My answer surprises many of them. 

“Do you care whether or not they are stamped in units of government currency?” I ask. 

This sounds to many callers like a question from the Twilight Zone — and they usually respond by asking, “What do you mean by that?”

“Well, gold and silver rounds are private-sector products and cannot be stamped as a national currency like ‘One Dollar’ or ‘Five Euros.’ Neither can bars, generally. We have several coins available here from several countries stamped in small amounts of their national currency, but I would suggest rounds and bars because the prices are typically better. Plus, bars and rounds are simpler.”

“Well, I want something I can spend in case the economy gets bad; I want coins - something actually minted,” they often reply.

Then I start summarizing our coins - distinguishing the two kinds, old and new.

There are two categories of precious metal coins that are stamped by governments in units of national currency: bullion and specie. 

Now, a side note: modern coins with no precious metal content are clad. Clad coins are another category I won’t discuss in this article, as clad coins only have their face value in units and fractional units of national currency. Think of the dimes, quarters, and pennies in your pocket now. For the most part, those are clad.

The first category consists of bullion coins. These are modern precious metal coins minted by various government mints or private mints commissioned by governments around the world. Bullion coins are primarily intended for investing and collecting, not trade and commerce.

The vast majority of bullion coins are stamped with small denominations of value in units of national currency (known as face value). They also display their metallic purity or fineness, their weight, and the type of metal they’re composed of. 

A few examples: 1-ounce Canadian Silver Maples are minted by the Canadian government and stamped, “5 Dollars, Fine Silver 1 Oz Argent Pur 9999.” One-ounce Gold British Britannias are coins of the British government stamped, “100 pounds, one ounce fine gold.” American Gold Eagles are stamped “1 Oz. Fine Gold - 50 Dollars” by the U.S. Mint, and Silver American Eagles are stamped “1 Oz. Fine Silver - One Dollar.” Australian Silver Kangaroos are stamped “1 Dollar 1 oz 9999 Silver” by the Australian Perth Mint. 

Again, bullion coins are not minted for commercial use even though they’re stamped in small face-value amounts of national currency and minted by direction of their issuing governments. The face value stamped on a bullion coin is always worth less than the commodity value of its precious metal content.

The main reason for producing bullion coins is to make precious metal coins of different nations available to the public for investing or collecting. A bullion coin’s face value is more ceremonial than anything. However, it also serves another purpose: it highlights the coercively exclusive “right” of a sovereign government to mint bullion “coins.”

The second category of coins I mentioned is called specie. These are coins that were minted in the old days by the various nations, specifically for use in everyday commerce, such as the coins included in the Coinage Act of 1792. The face value stamped on specie coins was interconnected with the silver and gold content. In other words, their face value directly correlated with the value of their precious metals content (for the most part). 

In today’s world, specie is antique coinage, and we buy and sell it as a commodity. Some buyers seek specie coinage for collector reasons and theoretical numismatic or historical value. Specie coinage, whether collectible or not, continues to have high value because it contains silver and gold. 

I like to think of the money used in the Wild West in the 1800s when I talk about specie. 

Examples of specie include: Pre-1933 gold coins such as $20-Dollar U.S. Gold Liberty coins (made of 90% Gold and 10% copper with 0.9675 ounces of gold) and Morgan Silver Dollars (made of 90% Silver and 10% copper with 0.7734 ounces of silver). 

The old Silver Dollars are referred to now as “junk silver,” but they are also specie. Other U.S. “junk silver” is specie as well: the Pre-1965 Dimes, Quarters, and Half Dollars, for instance.

Other examples of specie include French 20-Franc gold coins, Mexican 50-Peso Gold Coins, Austrian/ Dutch 1-Ducat Gold Coins, and Netherlands 10-Guilders Gold coins, to name a few. 

We have several other specie coins available, but the key takeaway is: the amount of national currency value stamped on a specie coin was interconnected with the amount of silver, gold, or copper it contained. In other words, the value in grains of metallic substance was supposed to be a match to the national currency value stamped upon the coin.

I have covered the two kinds of coins made of precious metals: bullion and specie. It’s okay to “spend” either of these, but it’s important to recognize the primacy of the value of their precious metals content, as it far surpasses their going face value in 21st-century terms. There is nothing that prohibits us from trading and bartering with these coins or using domestically made coins to make purchases. They are worth at least their weight in precious metals value, so make sure you are aware of that if you are looking to acquire them for trading and bartering.

I will now move on to the private sector bullion we sell at Money Metals Exchange. While these, too, are technically “coins,” because they have been coined during the minting process, they are not typically stamped in units of national currency by a government authority unless specifically commissioned to do so. Nevertheless, it’s okay to use private sector bullion for trade and barter voluntarily. These bars and rounds are often made from gold, silver, platinum, and palladium.

Examples include Silver Buffalo Rounds, Walking Liberty Silver Rounds, 1-ounce Lady Liberty Gold Rounds, 1-ounce Gold Bars, 1-gram Platinum Bars, and many more that we sell.

Precious metal bars and rounds are stamped with identification of their weight, purity, and the type of precious metal they are made of. Private-sector minted bars and rounds don’t have a stamp of face value in currency, or if they do, they have to be marked clearly as a “COPY” of a coin to make it known they are an imitation numismatic item. 

I like to think of rounds and bars as commodity wafers and bars, or as rectangles and circles. The rounds look a lot like government-issued coins, but they are not, because they are not stamped in official units of national currency. 

It should be clear when you look at a bullion round or bar how much gold, silver, or other precious metal it contains and what the purity is. For example, Silver Buffalo Rounds are stamped: 1-ounce fine silver .999. They do not have any stamp of value in Dollars, Cents, Euros, or British Pounds. However, they are a commodity wafer of .999 pure silver weighing one troy ounce. That is what makes them valuable.

Gold and silver rounds and bars are often available at slightly lower prices than government-minted coins. This is because the premiums charged are typically lower, and the private sector is generally more competitive and productive than the government sector. 

As I mentioned above, every citizen has the right to use bullion products made in the private sector for barter and trade. These transactions would be voluntary exchanges of value and worked out among the individuals making the trade. 

That said, there is still a tax situation when we trade and barter. If value is gained, taxes are due upon filing one’s annual taxes, essentially. But we are not financial or tax advisors. So, consult with your own tax advisors.

As for me, I want a form of wealth that I can save for wealth preservation or bartering if needed, that will always have value regardless of what happens to the Dollar or any other official fiat currency. The “worth” of Dollars, Euros, Yen, Pounds, and other sovereign currencies is only a temporary presence on this planet - that continues only for the time their issuing governments can back them and their citizens can trust them. But the worth of gold and silver is ongoing.

Gold and silver coins, rounds, and bars are all A-Okay for me to own, and I own some of each. I really do not care whether or not my gold and silver are stamped in units of national currency.

My primary concern is that I own the precious metals themselves that have high value.

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