CHARLEYWORLD: Thinking About Selling Your Silver? Watch Out For Pirates!

BY CHARLES MEMMINGER – With the price of silver hovering around $40 an ounce – the highest since the Texas Hunt brothers tried to corner the silver market in 1980 – now is a pretty good time to sell off some of grandma’s silver service but, let me tell you, a lot of the silver dealers out there seem a little testy.

One coin dealer actually hung up on me simply for asking how much he was paying for  silver on that day and another guy insisted he couldn’t give a price over the phone, that I’d have to bring my silver down to his store so he could eyeball it. Imagining myself trudging around Honolulu with a pillow case full of silver goblets, saucers and platters slung over my shoulder like the pirate Henry Morgan, I said, “Look, silver’s at $39 an ounce today.

I just want to know what you are paying. Ballpark.”

He said, “I don’t have time for this. I’ve got customers.”

I told him I was happy that he had customers and he didn’t have to worry about me becoming one of them in the future. Why do people in the business of buying and selling precious metals feel they do not have to provide the basic courteous service that other businesses do?

Can you imagine someone at Sears telling you, “Hey, buddy, if you want to know the price of a freakin’ refrigerator, get your butt down here in person.”

I actually have some experience in silver having caused the great silver collapse of 1980, an event wistfully referred to as “Silver Thursday” or “Dive Out Of A High Rise Window Thursday” depending on how much money you had wrapped up in silver futures.

The crash is generally blamed on Nelson Bunker Hunt and his brother William Herbert Hunt who had been secretly trying to corner the silver market.

In 1979 they owned one third of the world silver supply and had driven the price that year from $6 an ounce to almost $50 an ounce. But in truth they were merely victims. Unknown to the Hunts, I had bought three rolls of silver dimes and my notorious Reverse Midas Touch caused the market to collapse, costing Bunky and Herbert more than a billion bucks.

I hung onto those three rolls of silver dimes all this time waiting for the price of silver to get high enough for me to sell them and at least break even. With silver now at about $40, I started calling around to see what I could unload the dimes for, and maybe even the family heirloom silver service. If you are thinking about selling your silver, maybe the results of my unscientific investigation will help you.

First of all, don’t even think about selling your silver to a pawn shop. Pawn shops have to sell everything they buy for twice what they paid for it. One pawn shop owner I talked to said he was buying silver for about $7 an ounce. And that was when it was going for $38 an ounce on the open market. If you just need to pick up some money to tide you over for a while and you can’t get a traditional loan, you might consider pawning your silver. But to sell it for $7 an ounce is insane, especially since, I believe, tin foil is about $8.50 an ounce.

If you have coins, it’s best to deal with coin dealers. Silver coins are worth their weight in silver but they might have other esoteric value you don’t know about.  But the price for silver coins bounces around wildly depending where you go. Just using my three rolls of silver dimes as a threshold, one well known Honolulu coin dealer said he’d pay me about $2 per dime. That might sound good but it’s not. Three rolls of silver dimes weigh 12 ounces. If you were able to sell 12 ounces of silver at the top market price of $40 an ounce – which you actually can’t – that would be $480.Two dollars a dime came out to only $15 per ounce, or about $180.

The highest price I found for silver dimes was at Captain Cook Coin Company at about $25 an ounce. Owner Craig Watanabe arrives at his buying price through a fairly complicated calculation he kindly tried to explain to me. It went completely over my head, but it was nice of him to try. The reason I mention Watanabe and his company and not any others is because Watanabe was the only person who was civil to me.

Columnists, particularly humor columnists, have a pretty low threshold for loyalty and it usually comes down to whether someone’s being a jerk or not. Watanabe has been in the coin biz for more than 50 years and his company has been around since 1972 so he’s a far cry from those mall silver and gold kiosk dealers who came to town yesterday. His counsel is to shop around whether buying or selling gold or silver and stay away from places that are out to make a quick buck like, well, mall kiosks that opened yesterday.

I still haven’t sold my three rolls of silver dimes. With my Reverse Midas Touch, if I sold my silver dimes today, the price of silver would surge tomorrow.  And if silver was to reach, say, $100 an ounce, it would mean that the American economy had completely and utterly collapsed.  I’d hate to be personally responsible for that.

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