Dear Mr. Berko: The United States Mint is issuing a limited mintage striking of a silver proof $100 bill. It’s an exact image of the $100 bill, though it’s a little bigger, 6 inches by 2 1/2 inches. The entire surface (back and front) contains 1 troy ounce of pure silver, and it has that newly minted mirror shine. Each piece is assigned a numbered certificate and is individually registered to ensure authenticity.
Each silver $100 bill is completely encapsulated to protect its mirror finish, and it comes with a beautifully crafted box. These silver $100 bills are so beautiful that they make great gifts for special anniversaries, special birthdays, Christmas, graduation, etc. And best of all, I can buy five of these $100 silver proofs for $95, which is $5 less than face value. How can the government sell something for less than the cost?
A person at the U.S. Mint told me that this was an advance strike. The U.S. Mint made 9,999 of them for collectors, and when those are bought up by the collectors, people who didn’t get in early will have to pay $129 per proof. If I had the money, I’d buy 10 of them because the cost would be only $89 each, which is $11 less than face value.
This is too good to be true. I think I’m missing something here. What do you think? And what’s the difference between troy weight and avoirdupois weight?
— D.A., Durham, N.C.
Dear D.A.: I think you’re missing a lot, and a substantial portion of what you’re missing is common sense. Here’s why:
The outfit you’re talking with is not the real U.S. Mint in Denver, San Francisco, Philadelphia or West Point. GovMint.com may sound and look official, but it’s not. Rather, it’s a privately owned business run by Bill Gale, who sells other questionable collectables on HSN, QVC and USADirect. GovMint.com is located in Burnsville, Minn., and Burnsville winters are a lot colder than Durham winters.
I’m sorry to disabuse you of your conclusion, but the value of that $100 silver proof is far from $100. As you mentioned, it contains 1 troy ounce of silver, which trades between $16 and $18 an ounce, give or take daily changes in the spot market. But it can’t be used as legal tender, so the real value of that GovMint.com bibelot is the value of the silver that can be mined from it. Therefore, paying $95 each for five of these lovely kickshaws is not the bargain you thought it to be. Rather, it’s a swell way for Gale to buy silver and sell it to folks for a profit. Any sucker who buys one for $99 has an immediate loss in content value of $82, more or less.
In my opinion, this gleaming gewgaw has no collector’s value. When the first 9,999 are sold, you’ll still be able to buy them at market price, which I doubt will ever exceed $95. The 2015 and 2016 silver proofs can still be bought for less than $100 directly from GovMint.com.
And many citizens who bought these tchotchkes in 2014, 2015 or 2016 would be glad to sell theirs to you for $50 and take a $45 loss. None of them has increased in value.
Troy ounce
A troy ounce is a unit of weight traditionally used to calculate the mass of gemstones, gold, silver and other precious metals. One troy ounce equals 31.1 grams. There are only 12 troy ounces per troy pound. Avoirdupois weight is used in the United States to weigh everything except gems, precious metals and drugs.
One avoirdupois ounce is 28.35 grams, and there are 16 ounces to the pound. So 1 ounce of gold or silver is heavier than 1 ounce of coffee or tea. An avoirdupois pound is 453.6 grams, and a troy pound is 373.24 grams. OK?
The reason jewelers use troy weight is to confuse the consumer.
Malcolm Berko addresses questions about stocks. Reach him at P.O. Box 8303, Largo, FL 33775 or mjberko@yahoo.com.
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