Where has all the silver gone? A bag of old coins tells no lies!

By Trish Mahon
Silver has an interesting history. It can be traced back to the Bronze Age where it was readily accessible to ancient civilizations. It was used in jewelry, vases, bowls, figurines, and adornment. In terms of exchange, silver became the first metal used as currency when silver ingots were employed in early trade more than 4000 years ago.

While there was once a "Silver Standard," by the late 19th century silver began to be de-monetized in favor of gold. The United States began to systematically devalue silver as vast new discoveries from the American West were dumped into the marketplace in the late 1800's. But this "white gold" of the ancients is actually now far rarer than yellow gold.

The industrial demand for silver is soaring! Almost all modern electronics are configured with it. Silver possesses exceptional conductivity qualities and is a reliable electrical pathway. It is found in cell phones, circuit boards, TV sets, solar panels, telephones, microwave ovens, CD's, DVD's, batteries, hearing aids, film, medical instrumentation, etc.

As a result, the value of silver is also soaring. Companies like Lear Capital will tell you to buy silver bullion coins or bars as asset protection. And, maybe they're right. Silver investors have enjoyed an average growth of 20% per year over the past decade and silver has outperformed the Dow by 86%. And while gold has outperformed a bullish market, silver has outperformed gold.

I recently made my own silver discovery or shall I say rediscovery. I have some coins that my grandfather gave me a very long, time ago. I still remember his large weathered hand clasped around an old, yellowed bag filled with nickels, dimes and quarters from the 1940's... "Keep your eye on Silver Patricia!" he said. The bag was oddly heavy and his face was unusually serious as he squinted through his cigar smoke. I smiled at what appeared to be small change and stashed the bag away.

I didn't "keep my eye on silver" until recently, that is, when that very same bag fell out of my office closet four homes, five states, several careers, and some 30 years later. It threw itself at my feet. The internet made it easy to look up each coin and to my surprise I discovered a quarter worth $15, a dime worth $8 and a nickel worth $5! Not exactly a windfall but enough to convince me that there's something to all this silver talk. It is clearly the silver content that drives higher coin value.

Consider this... US quarters made between 1932 and 1964 were 90% silver and 10% copper and weighed 6.25 grams. Current US quarters are made out of a mixture of metals, none of which are silver, with over 90% copper and a little over 8% nickel. Now, there's much debate about whether a modern quarter is even worth.25 cents and a larger discussion about the value of all currency which now merely represents money but does not have any intrinsic value unto itself.