Precious Metals Buyers Guide

Fisch Precious Metal Buyers Guide
CONTENTS
__________________________________________________________ Chapter One Gold 3
A lesson from History Counterfeit Gold Gold Coin counterfeiting A Worldwide Industry Avoiding Counterfeit Coins The Safest Gold Coins to Buy Gold Coin and Bar Rating Chart Gold Coin and Bar Specification Table
__________________________________________________________ Chapter Two Silver 24

What Silver to Buy? The Counterfeit Silver Risk Factor Silver Product Price Comparison Specifications of Common U.S. Silver Coins
__________________________________________________________ Chapter Three Platinum 29

A Strategic Metal What Platinum to Buy? Specifications of the Platinum Noble
__________________________________________________________ Chapter Four Doing Business with a Dealer 30

14 Safeguards to make sure you dont get burned
__________________________________________________________ Chapter Five Grading and the Numismatic Coin 37

An Introduction to Numismatic Grading
__________________________________________________________ Chapter Six Speaking the Language 38

Explanation of words and terms used in the industry
__________________________________________________________ Chapter Seven Weights, Measures and Conversion Factors 41

This Guide is compiled from information we have gathered during our research into counterfeit precious metal coins and small bars. If you have any information on this subject we would be pleased to hear from you. Your name and address will be treated as confidential and will not be disclosed without your written permission.
Fisch Instruments www.fisch.co.za info@fisch.co.za 4010 Foothills Blvd, #103, PMB 199, Roseville California 95747, U.S.A.
FOURTH EDITION: MARCH 1985 1985 Fisch Instruments

All rights reserved. No part of this report may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, without written permission from Fisch Instruments. We have taken every care to ensure that the information in this report is correct. However, it is obviously not possible to guarantee freedom from error. We specifically disclaim any liability or loss that is incurred as a result of the use or application of the contents of this report.
FIFTH EDITION: OCTOBER 2008 2008 Fisch Instruments
1 December 2007 Dear Fisch user, The Precious Metal Buyers Guide had been out of print or so I thought for many years. Recently, my manager found a few copies in the storeroom and thought he may as well send them out with some orders for All 5 Wallets. The feedback from customers who got the Precious Metal Buyers Guide (PMBG) was so favorable I decided to have it retyped and laid out so that it can be downloaded from the website. Its free with your order for the Fisch, even though the customer below said I should charge up to $50! Here is what the customers who recently got a copy of the Precious Metal Buyers Guide said: I do endorse the idea of you re-releasing the Precious Metals Buyers Guide. I have rarely read so complete and competent a treatment of a topic. You are to be congratulated. ....and you should charge upwards of $25 to $50 for the reprint.... Thank you again for your response, your book, and your work. You have done important work; and I, for one, greatly appreciate it and you. First, a thank you to Mr. Will Cooney for the book, Precious Metal Buyers Guide. What an education. Also I would like to express my appreciation for the book on counterfeits. It is always good to have one's skepticism refreshed! The important point to remember when reading the Guide is that it was written in 1985. While most of the information is as relevant today as it was then, some information such as what coins to buy, etc., needs to be considered in this context. For example, the American Eagle gold coin was not available in 1985. And there are also other platinum and silver coins on the market now. 26 September 2008: Recently, a customer in England pointed out a number of typos and other errors that had crept in when the Guide was converted to the electronic format. I am embarrassed to say that while I glanced at the Guide after I paid someone to convert to the electronic format, I never proof read it. I had an unreasonable faith in the software used to convert It and did not realize that there could/would be errors. This customer kindly went through the Guide and highlighted the errors as well as made some suggestions on improving or clarifying some parts. I am very grateful for his effort and have made the corrections and improvements so this Guide is the improved version. I am also adding a few bits and pieces here and there so you could say the Guide is being updated. If you want to copy and paste extracts from the Guide on other websites, you can. But please include a link to www.fisch.co.za And write and tell me when you have done it. Sincerely, Ken Rutherford
4th March, 1985 Dear Investor, This is the fourth edition. What started out as a 12 page Counterfeit Gold Coin Report has grown into a guide to the practical side of precious metals investing. The story behind the original Report is interesting: When first introduced four years ago, the Fisch was sold by word of mouth to major dealers around the world. Later, when we decided to offer the Fisch directly to investors, some dealers, perhaps fearful that the publicity about fakes would be bad for business or perhaps just ignorant, offered up statements like There arent any good counterfeits or There are hardly any counterfeits. (Would that make you feel any better if you bought a fake?). As the facts tell a different story we published this Report. We say to you: Here are the facts. You decide. Not only investors have decided that the Fisch is a wise investment: Financial newsletter publishers like Howard Ruff, Daniel Rosenthal and others advise using the Fisch. For their trouble they have been denounced and ridiculed by a vocal few who appear to believe that if you say something like There arent any good counterfeits often enough it will come true. The Silver & Gold Report September/October 84 issues report the amazing Shoot the messenger if you dont like the message methods some dealers and dealer groups use and suggest using to suppress information about fakes. But the reality of the facts, the writings of many investment advisors and reporters plus the promotion by farsighted dealers have resulted in investors in 3 countries now being protected by the Fisch. They are in good company. Among the many the dealers who bought the Fisch are the biggest in the world. Names like Credit Suisse, Dresdner Bank, Mitsubishi Bank, Deak Perera, Samuel Montagu & Company, Standard Chartered Bank Hong Kong. This expanded Guide compares many of the precious metal products available. When you have decided what you want to buy, the Guide offers advice on how to do it safely and for the least money. I hope you find it helpful. If you have any suggestions on improving the next edition, please write. Kenneth Rutherford Fisch Instruments info@fisch.co.za
CHAPTER ONE GOLD A LESSON FROM HISTORY1

By Kenneth M. Rutherford President of Fisch Instruments It may be safely stated that the art, as pursued in the United States, is without parallel, and that without vaunt of hyperbole, we can beat the world on this our national specialtie counterfeiting. (An anonymous writer in 1863). Gideon B. Smith patented a counterfeit gold coin detector in 1853, the first in a long line of fake detectors patented over the next 30 years. They were borne out of need for a surer, more positive method of identifying fake gold coins. The methods that had been used since the early 15th century were no longer suited to the rapidly developing commerce and business of the 1850s. 2008: These detectors now pop for sale on eBay. They sell for 100s of dollars. The detection of fakes was a serious business as the buying power of even a minor coin was great. The businessman of the time depended on a variety of checks, plus personal observation, to determine if the offered coin was genuine. These checks included spitting on the coin or scraping it and then rubbing it against the short hairs on his head to make the base metal in a counterfeit show through. The coin was also dropped on a hard surface a counterfeit having a different ring to the genuine coin. Considering these methods, it is not surprising that the fake detector soon become as common in business as the electric calculator is today. The Gold Prohibition Act of 1934 calling for the confiscation of all gold coins, except those considered rare marked the disappearance of the fake coin detector. The money in everyday use changed from coins of intrinsic value such as gold, silver, and copper to paper, coins of the cheaper metals and plastic cards. The low buying power of everyday metal money eliminated the danger of counterfeiting and the lesson of history has been forgotten by many. The metal money counterfeiter has not gone away and neither has his target changed. It is still the coins of high intrinsic value and buying power. These are the gold bullion coins owned by an estimated 5 million Americans. The risks to investors are great: He or she mostly knows little about gold coins (how often have you handled a gold coin?), and the quality of the fakes has improved tremendously. Counterfeiters, using modern technology, are able to produce fakes visually identical to genuine coins. Newspapers report of dealers, jewellers, and bankers all being fooled by good quality fakes. How can an investor guard against buying fakes? By doing what the merchants of 100 years ago did checking the authenticity of every gold coin bought. How do you check a coin? By using the same method that Gideon B. Smiths detector employed weighing and measuring the coin against the issuing mints specifications. Modern counterfeiters may have mastered the appearance of their fakes but the principle of density the ratio of mass to volume has not changed. Gold has a greater density than the common metals such as lead, brass, copper, and steel. This means that it is impossible to make a common metal fake (the only kind ever found) that is identical to a genuine coin in both weight and size. No honest dealer wants to sell you a fake. But he can make a mistake. Dont be part of someone elses mistake check every coin you buy. After all, who can look after you better than yourself?
Reprinted from The Financial Security Digest, August/September 1983, P.O. Box 192, Cocoa, FL 32922
GOLD COIN COUNTERFEITING A WORLD-WIDE INDUSTRY

Because more and more counterfeit coins are detected each year, the counterfeiter must continually improve his craft. As reports of diagnostics of genuine and counterfeit coins are released to the general public, the counterfeiter uses this information when he creates his product. American Numismatic Association Certification Service quoted in The Numismatist June 1983
2008: A customer sent me this about a Chinese Counterfeit Factory report on About.com: Coins. Here is the introduction from the website: The photos in this gallery were taken inside a Chinese coin counterfeiting operation. This counterfeiting ring is suspected of putting thousands of fake coins onto the world and U.S. coin markets every month. These striking photos first emerged on certain Web-based coin discussion boards in Europe and the Far East. They came to my attention through a numismatic watchdog/satire blog called Biddle's Bank. These are the same coins which are being put into counterfeit PCGS and NGC coin holders, although they are most frequently sold raw (non-slabbed.) The sheer size, scope, and professionalism of this counterfeiting ring will astonish you. Although the working conditions often appear dirty and the minting equipment is old, this is obviously a well-funded enterprise that is run like a legal business in China. There is no law in China against making these "replicas" as long as they are sold as such. http://coins.about.com/od/worldcoins/ig/Chinese-Counterfeiting-Ring/ This from the Professional Coin Grading Services website. The Chinese Counterfeit Factorys products reach the US: COUNTERFEIT PCGS HOLDERS March 27, 2008 In recent days, counterfeit coins in counterfeit PCGS slabs have begun to appear on eBay, the online auction site. All of the counterfeit coins/holders seen so far are coming out of China. Alert members of the PCGS Message Boards were the first to notify PCGS of the counterfeit coins/holders. http://www.pcgs.com/articles/article_view.chtml?artid=5286&universeid=313 More from About.com:Coins http://coins.about.com/b/2008/03/28/pcgs-warns-against-fake-slabs.htm Another customer sent me this about British Sovereigns sold on eBay: Beware Buying Gold Sovereigns on eBay Day after day, we see misleading, fraudulent, or counterfeit items offered for sale on eBay. We report some, and eBay do nothing leading us to conclude that eBay are content to makes profit from fakes, fraud, deception, and copyright theft. http://www.goldsovereigns.co.uk/bewarebuyingsovereignonebay.html
Worldwide investment in gold coins is enormous running into billions of dollars. In the U.S. alone, 1982 gold coin sales have been estimated at over $1 billion. At an average price of $375 for the year for an ounce of gold this translates into more than 2.6 million ounces of gold. Up to the end of 1983 almost 40 million Krugerrands had been sold approximately half in the U.S. With gold at $400 an ounce it represents a holding of $15.6 billion with $7.8 billion inside the U.S. (See Chapter 6 Speaking the Language for a list of definitions of many of the numismatic and technical words and terms used throughout the Guide.) Forgers will fake anything of value. It is not surprising that the manufacture of fake gold coins is a multimillion dollar industry. What is surprising is how little attention has been given to the danger of fakes by sellers and buyers alike. Statements such as Krugerrands cannot be successfully faked and There is no profit in phoney Krugerrands are not uncommon. This is a very dangerous situation. Krugerrands (and any other gold coin for that matter) can be successfully faked and there are very large profits to be made from phoney gold coins, as we shall see. In July 1980 the U.S. Secret Service traced thousands of fake Krugerrands to counterfeiters in the Los Angeles area. Agents seized counterfeit Krugerrands and U.S. coins with a street value of more than $2 million. As many as 1 000 Krugerrands were made from brass and then gold plated. Although these fakes were half the weight of the authentic coins and although the relief likeness of Paul Kruger was said to be badly flawed they nonetheless fooled a number of unsuspecting buyers. In August 1978 a South African newspaper exposes an international racket in which fake Krugerrands made in Lebanon were sold to gullible South Africans and delivered to relatives or friends in France, West Germany, Israel or Britain. Called Beirut Krugerrands, they had a copper core with a thin outer covering of 18 carat gold. Although it was reported that coin experts would immediately recognize these Beirut Krugers as crude fakes, many people were fooled. Even the experts can be fooled. In March 1978 Bank Leu, Zurich, Switzerland received a regular consignment of Sovereigns, in sealed bags, from a London dealer. To the British dealers great embarrassment Bank Leu detected a large number of fakes in the consignment. A forgery panic set in and some of Londons bullion houses were so disturbed that for a time they suspended trading in New Sovereigns. The fake Sovereigns were probably made in Beirut, Lebanon, and transported to Europe by courier. In 1977 Swiss police arrested one such courier carrying 4,400 counterfeit Sovereigns. These counterfeits were so good that they deceived some of Londons leading bullion houses. Even the Royal Mint (who produces the genuine Sovereign) was impressed. A Mint spokesman said: Its not something we want to talk about really, but they are very good. You could enlarge a picture of the counterfeit coin 30 times and you still wouldnt see the difference.
March 1981 saw two Texas banks fooled by fake Krugerrands. Gold plated lead Krugerrands with a bogus value of approximately $1.4 million were seized in Amarillo and Houston by the Secret Service. The President of the Amarillo bank resigned when it was disclosed that the fakes had been used as collateral for a $270,000 loan from his bank. Reports of these fakes were also received from Dallas, Fort Worth, Lubbock and Austin. In June 1981 a special task force from 5 Federal Agencies and a Federal Grand Jury in Amarillo were reported investigating the circulation of 4 700 counterfeit Krugerrands (bogus value approximately $2.3 million). Houston police said that a coin dealer who had lost $35,000 through buying fake Krugerrands tipped off the authorities when approached a second time. A Jack Anderson syndicated column in August, 1981, reported that Treasury agents, with the minimum of publicity, had raided coin dealers in several cities and seized fake Krugerrands. The article said that the fake coins seized in Houston were so well minted that they fooled jewellers. Most of the bogus coins were forged from lead and painted with gold. In March, 1982, three men were arrested in Syosset, N.Y., and charged with possession of six bogus double eagles and 2 counterfeit Krugerrands. The three also had genuine $20 gold coins and Krugerrands in their possession when they were arrested. It is believed that they showed the real gold to prospective buyers, then delivered the fakes when the sale was consummated. In October, 1982, an Asheville, N.C. coin dealer reported a fake of the 1/10th oz. Krugerrand. The fake was only discovered when the dealer examined the coin closely after he had bought it. He believes that the counterfeiter had a mould of a genuine coin and then used a mixture of gold and a common metal to cast the counterfeit. According to the authoritative Consolidated Gold Fields Limited annual gold marker survey, Gold 1980, todays three main centres manufacturing facsimiles of official coins (we call them fakes) are Saudi Arabia, Kuwait and Syria. In fact, in the Middle Eastern countries the production of fake coins is not illegal. It is an industry that has been carried on for many years and is a specialty of the peoples of Aleppo, Syria. Damascus is also a centre and prior to the civil war and other troubles, Beirut in Lebanon was a big producer of fakes. From 1975 to 1979 the counterfeiting business in Saudi Arabia was so prosperous that two extra workshops were opened to satisfy demand. Counterfeiters have also been active on a large scale in Italy, Spain, India, Switzerland, Morocco and Yugoslavia.
SPOT THE FAKE!
The Krugerrand marked with an X is a fake which was sold to the South African gold coin Exchange in Johannesburg in September, 1984. Later when the coin was checked with the Fisch gauge it was found to be a fake. The coin failed three of the four checks of the Fisch: Weight: The fake did not tip the gauge. It was too light. Thickness: The fake was able to fit into the slot but not pass through. Diameter: The diameter of the fake was greater than a genuine coin so the fake was not able to pass through the slot. Shape: The fake was not able to fit into the recess used to check the shape and for the weight check.
The fake is believed to have been made from silver by a pressure casting process and then gilded with a layer of gold. The colour is reported to be similar to a genuine Krugerrand. Although the lettering is remarkably sharp, the definition is not as sharp and pristine as a genuine coin. It is not known whether the fake was made in South Africa nor is it known how many other fake coins may be in circulation. The lesson to be learned is that it is better to check a coin with the Fisch before you buy it than afterwards!
The fake coin business continues to flourish. An examination of the Gold 1980 survey gives a clue to the size of the counterfeiting industry. The following figures are for new gold used in the manufacture of medals, medallions and fake coins for the years 1976, 1977 and 1978: Kuwait Saudi Arabia Syria Iran Total 1.061 million troy ounces 0.643 million troy ounces 0.547 million troy ounces 0.482 million troy ounces 2.733 million troy ounces
The production of gold medals and medallions in the Middle East is minimal. The manufacture of fake coins would probably account for 95% or 2.6 million troy ounces of the total above. This is the equivalent of over 11 million Sovereigns or nearly 2.7 million double Eagles. As a comparison, in the same period 10.7 million genuine Sovereigns were produced by the Royal Mint. These figures are for new gold only and do not include the melting and reprocessing of old gold articles sold back to dealers. We have also not included the figures for Italy, Spain, Germany and Switzerland whose new gold usage in the medallions, medals and fake coins category was 1.373 million troy ounces for the same 1976 through 1978 period. Here the productions of medals and medallions would have made up a larger proportion of the total, but the gold used for fake coins would still have been considerable. Of interest in the report is the information that Germany produces a large number of medal blanks for export to the Middle East. There is a strong possibility that these blanks were also used in the manufacture of fake coins. Gold 1980 says that in most instances the replicas (fakes) are used as a convenient form of gold hoarding. This may be so, but with premiums of up to 70% having been paid for new Sovereigns on the U.S. market over at last five years, large numbers have surfaced in the West. Contrary to popular opinion most of these fakes are new (Elizabeth) Sovereigns not the old Sovereigns. The problem has become so bad that a major U.S. bullion and coin dealer now refuses to trade the sovereigns. Why are Sovereigns so popular with counterfeiters for 150 years, up to the mid 1980s it was the most popular gold coin in the world. It spread with the British Empire and became known and easily recognised everywhere the Union Jack flew. It was, and still is, particularly popular in the Middle East and India. In recent years the very high premium charged by the Bank of England for genuine new Sovereigns has been an added incentive for large volume counterfeiting. Although the Sovereign has received the most attention from counterfeiters, virtually every popular (and some not so popular) gold coin has been faked. The U.S. Double Eagle has been, and still is, particularly popular due to its high premium, which reached 127% in 1973, and is in the 60%+ area today.
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Fake Coin Manufacture Advances in metallurgy and engineering have presented forgers with many superb ways of producing false coins. The state of the art has reached a point where perfection in forgery is here commented coin expert Eric Newman. In a paper delivered to the International Numismatic Congress in 1967. Counterfeiters using modern technology can now produce fakes that are visually indistinguishable from genuine coins. The best fakes are made by the same process as that used by official mints to produce the real coins. This is the simultaneous striking of the obverse and reverse coin design onto a circular polished metal blank as described later in the report. The fake coins would be made from low cost metal or metal alloy such as lead or brass and then thinly plated with the same gold alloy used to make the real coins. The equipment needed to mass produce fake gold bullion coins is freely available. Fake Coin Factory Equipping a fake coin factory from scratch, with the best new machinery, would cost in the region of $700,000. The cost would include: A rolling mill to roll the selected metal to the required thickness. A guillotine to cut the rolled metal into strips. A 5 to 10 ton eccentric press, with dies, to punch out coin blanks from the strips. A chemical cleaning plant for cleaning and polishing the blanks. A low tonnage, very accurate coin press to strike the blanks. A triple acting H.M.E. coin press could be purchased for about $200 000. A Taylor Hobson or Deckel copy engraving machine to make the obverse and reverse coin dies for the H.M.E. press. An electroplating plant capable of gold plating the fake coins in suspension. The setting up of a well equipped tool room.
Second hand H.M.E. coin presses and Taylor Hobson or Deckel copy engraving machines can often be bought for approximately one-third the new cost. The vital part of the process is the making of good fake dies. The copy engraving machine could be used to cut a reverse copy of both sides of a genuine coin onto a high density plastic material at a ratio of approximately 1:10 (i.e. the reverse copy would be ten times larger than the genuine coin). Any imperfections are corrected on the enlarged copies before they are used as masters to make the dies. The material cost of a fake Krugerrand from this plant would be less than $5, including the thin (3 to 6 micron) gold plating. As a H.M.E. coin press is capable of minting thousands of coins a day it is possible that the entire plant cost could be recovered from one days production. (At current prices 1,800 Krugerrands would have a bogus value in excess of $700,000).
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With access to a reasonably equipped toolroom a counterfeiter on a tight budget could make smaller quantities of good quality fakes for an outlay of under $20,000. An ordinary 5 to 10 ton fly press can be inexpensively modified to strike the blanks and a small tank custom built to electroplate the fakes. The making of the coin dies is within the capabilities of a competent toolmaker using a second hand copy engraving machine.
AVOIDING COUNTERFEIT COINS

What may seem obvious is frequently overlooked in order to avoid counterfeits each and every coin you intend buying should be carefully checked. In many transactions the genuineness of coins is taken for granted far too casually. Buy only from a dealer with impeccable credentials. Be suspicious of bargains. In coins, as in other transactions, you get what you pay for. In addition, if you are able to check the coins yourself and are satisfied that they are genuine you will have absolute peace of mind. Here is how you go about it: 1. Check the physical measurements of the coin. 2. Check the appearance of the coin. The physical measurements of the coin are checked against the official standards for that particular coin. For this check you need a scale with an accuracy of 1/10 (one tenth) gram and a vernier calliper of micrometer screw gauge with an accuracy of 1/10 (one tenth) millimetre. Weigh the coin. Measure the diameter (in two places 90 degrees apart) and the thickness (at the thickest part usually the rim). All must be within the tolerances allowed by the official standard. This equipment will cost between $300 and $400. In the case of the popular gold coins their vital measurements can be checked with the Fisch gauge. A specific gauge for each different coin checks the maximum allowable diameter and thickness, the minimum allowable weight and the shape. The checks are quick and easy to make apart from the Fisch all you need is a level surface and will detect all common metal counterfeits. The reason is simple: Gold has a greater density that the common metals such as lead, brass, copper and steel. This means that it is impossible to make a counterfeit substituting a common metal in place of some or all the gold that will be identical to a genuine coin in both weight and size. The Fisch is sold in Wallets, containing 3 to 5 gauges, for about $140 per Wallet. Recent advances in engineering and metallurgy have given forgers the means to make fakes that are almost indistinguishable from genuine coins. One cannot, therefore, rely only on a visual check to authenticate a gold coin. A physical check is always necessary but many fakes can also be spotted by a careful examination of the coins appearance and surface characteristics. And understanding of the different methods of counterfeiting will help you recognise these fakes. If possible examine the coin using a glass with a 10X magnifying power. Hold the coin between thumb and forefinger. Rotate it to catch the best light. Examine the front (obverse), the back (reverse) and the edge.
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Counterfeiting Methods
Casting One of the oldest methods used is the casting of fake coins. Here a mould is made from a genuine coin. It is usually made in two pieces that are held together while the molten metal is poured in through a small vent, usually placed on the rim of the coin. Alternatively wax models are made from the first mould. These wax models are then encased in a plaster substance, once again with a small vent for the molten metal. When the plaster is set the wax is melted, poured out and the metal poured in. The plaster is broken open to release the fake. Generally cast fakes are of poor quality and easy to detect. Look for the following telltale signs: Poor Surface Air bubbles trapped in the casting or mould material are difficult to remove and will produce a surface that is dimpled or rough. This is usually most common near lettering or places of high relief. Raised lumps and lines are caused by chops and scratches n the genuine coin used as the master or by imperfections in the mould. A cast fake will lack definition. The edges of the lettering and where the lettering meets the field (the flat, background surface) will be softened or rounded. (See Chapter 6 Speaking the Language for a list of definitions of words and terms used in this Guide.) Size As molten metal shrinks when solidifying a cast fake made from a genuine master will be slightly smaller in diameter and thickness. Edge Imperfections It is difficult to reproduce the edge of the fake exactly due to the shrinkage. Particularly with a reeded edge coin the vent where the hot metal is poured into the mould will usually show as a blemish. It is possible, however, to cast the fake to a slightly larger diameter and machine it back to the correct size. If the reeding is rolled on by machine after casting it may overlap. Die Struck This is the method used by official mints to produce genuine coins. Fakes made in the same way are the most difficult to spot. Genuine Krugerrands are made as follows: 99.9% pure gold is melted in an induction furnace. A small amount of pure copper is added to produce the 91.7%/8.3% alloy required. This alloy is poured into billets 12 mm thick, which are then rolled into strips of the required thickness. Circular blanks are punched out of the strip and tumbled in a soap solution to remove the sharp edges. The blanks are checked for weight at this point. An upsetting machine (by striking the metal on the edge) gives the blanks a rim on each side; they are annealed (softened) ready for striking and burnished (polished) until smooth and shiny.
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The blanks are fed into an automatic coin press where the obverse and reverse dies strike both sides simultaneously to produce the required designs. While this takes place the blank is held in place by a collar containing the reeded (milled) edge design which is forced into the edge of the coin at the moment of striking. The manufacture of genuine coin dies is a multi-stage process whereby the original large scale design (usually in clay or a plastic compound) is transferred to the final dies used for the actual striking of the coins. Stolen, reconditioned or forged dies are used to mint fake coins. Once a good set of dies is available the actual minting (or striking) of fakes is a relatively simple process and large quantities can be produced in a short time. One modern coin press is capable of producing 50 Krugerrand size coins per minute. Forged dies can be made in a variety of ways, the most successful being by means of a copy engraving machine (or pantograph), electrical discharge machining or one stage die casting. Any small imperfections on the surface of the fake die can be removed with great accuracy using the jet honing process, whereby tiny glass beads in a liquid are blown by an air jet onto the surface of the die. Tell-tale signs of a die struck counterfeit are usually a result of a die imperfection as follows: Working Marks Removing imperfections on a die is a skilled process. A scratch on a die will appear as a raised line on a fake coin. The electrical discharge machining sometimes leaves minute pitting in the die. They produce small sharp bumps when the fake coin is struck. The unskilled jet honing of defects can leave a rippled die surface. Lettering Any imperfections in a fake will usually show up in the lettering. It should be crisp and clean with no haziness. Marks and Indentations The field should be smooth. Suspect a coin whose field has marks, scratches, indentations or shows any sign of disturbance. Tracing Tool Rings When cutting a counterfeit die certain tracing tools follow the contours of the master coin as it rotates about its axis. This can leave circular rings in the field which must be polished out. Therefore be suspicious if you spot concentric rings.
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Edge Check the reeding or the lettering of the coin carefully. Both should be regular and clearly defined. This is an area that sometimes reveals an otherwise excellent fake. Colour Application Once a common metal fake bullion coin has been cast or struck it must have its surface colour applied. This is usually done by gilding or electroplating. Gilding is the coating of the surface with a thin layer of gold alloy, usually by means of heat. Electroplating is the modern equivalent of gilding and uses an electric current to deposit the thin layer of gold or gold alloy on the coin. The thickness of the layer can be accurately controlled by adjusting the amount and duration of the current. The layer on a fake coin is usually only between 3 and 6 microns thick. A thicker layer could impair the definition of the raised relief on the coin. The colour of a particular coin type will vary very little from coin to coin. This is due to the small tolerance allowed in the composition of the gold alloy used in their manufacture. In the Krugerrands case the alloy is 11/12th (91.67%) gold and 1/12th (8.33%) copper. The copper gives the Krugerrand its characteristic reddish tint. If the alloy composition is not matched accurately when electroplating or gilding a coin the colour may vary. Suspect a coin whose colour is different.
Gold Bullion Coin Counterfeiting Materials

Common Base Metals The most likely fake you will encounter will have an inner core of either lead, brass or copper. All are soft metals, easy to work and fairly heavy, but not nearly as heavy as gold. The density (or specific gravity) of a substance determines its weight. The higher the density, the heavier the substance. The density of gold is 19.32 or 19.32 times as heavy as an equal volume of water at 4C and normal atmospheric pressure. This makes it one of the heaviest materials known. It is 70% heavier than lead (density 11.34), more than twice as heavy as copper (density 8.96) and 2 times as heavy as brass (density 8.35 to 8.60 depending on the particular alloy). Most gold bullion coins are made of gold alloyed with a small amount of copper to give better wear resistance as pure gold is very soft. A Krugerrand (11 parts pure gold and one part pure copper or 22 carat) has a density of approximately 17.5. If a fake were made from lead to exactly the same thickness and diameter of a genuine Krugerrand it would weigh just under 22 grams compared with the
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real coins 33.93 grams, or some 35% too light. If it were made to the correct weight and diameter it would be approximately 54% thicker than a genuine coin a noticeable amount. There would be an even greater difference if copper or brass were used. A fake brass Krugerrand would weigh only about 16 grams, just under half the correct weigh, or be approximately twice as thick if it were the correct weight. Silver Although silver is not widely used due to its high cost in comparison to the common metals it does have the advantage of being easy to work. Recently excellent fake gold plated silver Krugerrands have surfaced in Europe and South Africa. Platinum Platinum is heavier than gold (density 21.37) and easily worked, so would be ideal material if it were not as valuable as gold. Last century, before it became a much desired industrial material, it was used to make fake British and Spanish gold coins. Other Platinum Group Metals Certain platinum group metals, notably Iridium (density 22.5) and Osmium (density 22.57) are heavy enough to be considered suitable material. Both are by-products of platinum production and produced in very small quantities. It would be extremely difficult to obtain significant quantities of these metals. As they are also both expensive metals (particularly Iridium) their use in counterfeiting can be discounted. Tungsten Tungsten (density 19.3) is as heavy as gold. It is relatively cheap and freely available. Its extremely high melting point (3,410C compared with golds 1 064C), and hardness, makes it very difficult to work into a good quality fake gold bullion coin. Gold Counterfeit gold bullion coins have been produced using a combination of gold and a base metal. The forger makes his profit by reducing the quantity of gold in the fake. An accurate weight and dimension check will spot this type of fake.
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The Fisch
A precision tool
Specific gravities (Densities)

Osmium 22.57 Iridium 22.50 Platinum 21.37 Gold 19.32 Maple leaf 19.32 Credit Suisse 1 oz. bar 19.32 Tungsten 19.30 Austrian 4 ducat 19.01 Krugerrand 17.62 British Sovereign 17.62 Austrian 100 Corona 17.32 Hungarian 100 Corona 17.32 Gold Standard Corp. 1 oz. coin 17.32 Mexican 50 Peso 17.32 U.S. $20 1850 - 1933 17.32 U.S. $10 1838 - 1933 17.32 Lead 11.34 Silver 10.49 U.S. Silver Dollar 1804 1935 10.31 Copper 8.96 Modern U.S. 5 cent 8.90 Modern U.S. cent 8.80 Nickel 8.90 Brass 8.35 to 8.60 (approx.) Iron 7.86 Aluminium 2.77 Note: Coin densities are estimates
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THE SAFEST COINS TO BUY

You want to invest in gold. You want to hold that gold physically in an easily portable form. You want the maximum amount of gold for you money. You have decided to buy gold coins, medallions or bars but which ones are the best and safest to buy! The choice is enormous there are hundreds of different coins and bars you could buy, ranging from the obscure Afghan 10,000 Afghani to the equally obscure Zambian 200 Kwacha. Firstly we eliminate all numismatic (rare) coins. They are bought for their rarity, and their value has little or nothing to do with their gold content. This is another field of investment entirely, with its own dangers and pitfalls, and does not concern us at this time. These coins are easily recognised by their asking prices which are multiples of their intrinsic gold value from twice to hundreds of times as much. Secondly, we eliminate the small gold bars and wafers that are not hallmarked by a major refiner. When the time comes to sell and if the dealer does not recognize the refiner he will insist on an assay to establish the purity of the gold. The cost and inconvenience of the assay does not justify the purchase of this type of gold. Bars hallmarked by major refiners such as Credit Suisse, Engelhard & Johnson Matthey will be repurchased without assay. Thirdly, we eliminate all private issue medallions. None are traded actively and widely enough to be considered. Some are not called medallions and look very much like coins but a coin can only be issued by a governing authority. Fourthly, we eliminate the scores and scores of different coins issued that have not achieved a stable position in the market place. Their failure to establish themselves is caused by various factors: The total number minted is too small. The issue price is too high in relation to their intrinsic gold value. The coin lacks status or popular appeal. An example is the Russian Chervonetz. Once this coin was a contender for a prominent position in the gold bullion coin market. Since the Afghanistan invasion US sales have plummeted.
We recommend that you buy only coins or bars that are well known and widely sold. Specifically we suggest you study our Gold Coin and Bar Rating Chart and make you choice from there. Counterfeiting Risk Avoiding fakes is the single most important consideration when buying gold coins. The number of fakes in circulation will affect the acceptability of a coin. Once the numbers reach a certain level they can undermine the coin to the extent that many dealers (and investors) will no longer be prepared to buy that
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type of coin. Even if you are able to positively check the coins you buy, it is best, from a general acceptability point of view, to buy coin types that are not widely faked. Sovereign The Sovereign is the worlds most counterfeited gold coin. It is estimated that 50% of the new (Elizabeth II) and 30% of the old variety sovereigns in circulation are fakes. Why are they so popular with counterfeiters? For 150 years, up until the mid 1970s, it was the most popular gold coin in the world. The Sovereign spread with the British Empire and became widely known and recognised. It was, and still is particularly popular in the Middle East and India. In recent years the high premium charged by the Bank of England for genuine Sovereigns has been an added incentive to large scale counterfeiting. Double Eagle ($20) and Eagle ($10) There are very large numbers of fake Double Eagles (U.S. $20) and Eagles ($10) in circulation. Again this is because they are popular coins that have been around for a long time and because they command high premiums which reached a peak of around 120% in 1973. Although many fake Eagles and Double Eagles have been produced in the U.S. The majority originate from Italy and the Middle East. The quality varies from crude, easily identified fakes to excellent die struck examples. 100 Corona There have been reports of fake 100 Coronas mostly the Hungarian rather than the Austrian variety. 4 Ducat Some forgeries have been reported. Krugerrand The Krugerrand is becoming an increasingly popular coin to fake. Because it sells at a low premium it is only a proposition to make fake Krugerrands from common metals usually lead, brass or copper. It is popular because it is widely known and accepted often with only a cursory look! The incidence of Krugerrand fakes will probably grow with its popularity, there have been a few reports of forgeries of the fractional Krugerrands. As it is easier to fake small coins we would not be surprised to see more fakes of these coins. Mexican 50 Peso 50 Pesos have been faked for the Latin American market. The distribution centre is said to be Curacao, with Argentineans being heavy buyers.
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Maple Leaf We have not uncovered any reports of fake Maple Leaf (Canadian $20) coins. The quality of minting of the Maple Leaf is excellent. This, together with its fineness of 999.0 makes it relatively more difficult to fake. Credit Suisse 1 oz. bar Although we have not uncovered any reports of fake bars of this particular type and size we cannot give it a good rating as bars are easier to fake than coins. There have been reports of other counterfeit gold bars. Besides avoiding fakes there are other factors that have a fundamental bearing on the success or failure of your investment. These are:
Value for Money

The amount you pay over the gold value (intrinsic value) of a coin is its premium. A gold coin which contains $100 in gold (intrinsic value) and sells for $120 (market value) has a 20% premium. Generally, the larger the coin (heavier) the lower the premium will be. Always shop around for the best deal prices can vary substantially. The more coins you buy at one time the keener will be the price. As a guideline, here are the premiums quoted on single coin purchases by a major bullion dealer known for competitive prices:
Austrian/Hungarian 100 Corona Krugerrand 1 oz. Mexican 50 peso Maple Leaf 1 oz. U.S. Gold Medallion 1 oz. Krugerrand oz Krugerrand oz Maple Leaf oz. Krugerrand 1/10 (one tenth) oz Maple Leaf 1/10 (one tenth) oz. $10 Liberty 1866 1907 $20 Liberty 1877 1907 $10 Indian Head 1908 1933 $20 Saint-Gaudens 1907 - 1933
F12* MS60 F12 MS60 F12 MS60 F12 MS60
0.8% 3.7% 4.2% 4.7% 4.7% 9.0% 13.0% 13.0% 23.0% 23.0% 38.0% 148.0% 46.0% 115.0% 127.0% 406.0% 80.0% 148.0%
*Denotes grade of coin
Prices quoted February, 1985
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Note: premiums fluctuate with supply and demand. When phoning for a price quote always ask about any commissions, handling and freight charges that may be added to your invoice and which can make a big difference in the actual cost per coin. How to calculate the premium: Price of coin - (pure gold content in oz. X spot gold) (Pure gold content in oz. X spot gold
Potential Premium Change All gold coins will not appreciate (or depreciate) at the same rate. We must consider a particular coins prospects of appreciation (or depreciation) over and above a rise or fall in the gold price. The premium change can show a profit (or loss) for you. (Note that it is possible for a coin to have a small negative premium when its price is less than its intrinsic gold value. This can occur when the supply exceeds the demand for that coin. A negative premium will never be large as the coin can always be melted down for its gold bullion content.) The change in a coins premium from the time you buy to the time you sell can be considerable. For example, in the period January 1975 through December 1980 gold showed a 205% increase but the Queen Elizabeth II (new) Sovereign only showed a 134% increase due to the large drop in its premium over this period. In the same period the premium on the Krugerrand remained virtually unchanged in the 5% region. An investor who bought and sold Krugerrands would have made a much bigger profit than one who traded Sovereigns. In 1984 some major numismatic coin dealers were recommending that investors swap their Krugerrands, Maple Leads, Mexican 50 Pesos and 100 Coronas for the $20 Double Eagle. It has been interesting to follow the prices of the relatively common Uncirculated or MS-60 grade $20 coin over this period. In December, 1983 the price of a $20 Saint Gaudens type Double Eagle was around $700. In April, 1984 at the height of the promotion the price reached $1000+. Now, after the promotion the price has slipped back to $675 (Trend prices Coin World 1/30/85). During the same period gold traded within a $90 range. The main thrust of the promotion was to make a great fuss about the reporting requirements that the IRS is imposing on bullion coin transactions (i.e. Krugerrands, Maple Leafs, etc.) The Double Eagle is exempt as it falls into the category of coins whose value exceeds the melt value (value of actual gold content) by more than 15%. Buyers and sellers of bullion coins are meant to show identification and/or Social Security numbers to the dealer. (Almost one year after the fuss started, the regulations are apparently so
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unclear that many dealers do not seem certain of exactly what is required. Hence procedures vary greatly from dealer to dealer.) Regardless of what the IRS instruct dealers about bullion transactions, the promoters were using this fear and dislike of the IRS to manipulate investors into swapping their coins. But what the promoters omitted to mention is that profits from the sale of both bullion coins and $20 coins have always been subject to tax. In actuality, the dealers were saying that by swapping to $20 gold coins you could evade tax with less risk as the IRS was not requiring a record of the transaction. A dealer not involved in the swap promotion raised an interesting point: If the IRS suspects that there is wholesale swapping from bullion coins to numismatic coins to facilitate evading tax they will simply make the reporting requirements apply to those coins as well. So why were the promoters making such a fuss? The answer is simple: profit. There is more profit in selling one $20 coin than there is in selling 6 Krugerrands. A lot more knowledge is needed to trade numismatic coins than bullion coins so a dealer deserves to make more. But what does it mean to you as a gold investor? It means less gold. With gold at $302.70 an ounce a one ounce Krugerrand was quoted at $314.00. A $20 Saint Gaudens (0.9675 troy ounces of gold), graded MS-60, was quoted at $675. The premium on the Krugerrand is 3.7% against 130% for the MS-60 $20 Saint Gaudens. While a correctly graded MS-60 $20 Saint Gaudens coin may turn out to be a superior investment, it is a numismatic not gold investment. See Grading and the Numismatic Coin. Is the premium charged for a $20 Double Eagle justified? Consider the following: A vast number of Double Eagles were minted from 1849 to 1932 174 million, using 168 million ounces of gold. How many are still available to the market? Estimates vary from a conservative 10 million to 80 million. Even using the figure of 10 million, this is comparable to the combined total of all the 100 Corona and 50 Pesos restrikes. A conclusion could be drawn that he common date Double Eagle is not a rare coin and the high premium is not justified. The premium has also fluctuated widely: From March 1973 through January 1980 it dropped from 122% to 18%. Betting on a rise in the Double Eagle premium must be considered highly speculative. The sharp upside movement of the gold price to over $800 in January 1980 coincided with a record low Double Eagle premium of only 18%. A repeat of this scenario cannot be discounted. The common date British Sovereign, and particularly the old (pre Elizabeth II) Sovereign also attracts a premium out of proportion to the numbers available to the market. Over one billion of the old variety has been minted and none
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have been officially recalled. In all 241 million ounces of gold were used. Compare this with the almost 39 million ounces of gold used to mint all Krugerrands currently in existence. Authentic rare date Sovereigns do not fall into this category. They are numismatic coins and command considerably higher prices. The changing supply and demand will determine the change in a coins premium. Various factors will influence the supply or demand: The popularity of the coin may change. As the buying public become more knowledgeable they will realise that certain coins are overpriced in relation to the supply available. This will probably happen to the old Sovereigns and could happen to the common date Double Eagle. An interruption or halt in the supply of a popular coin. It, for instance the supply of the Krugerrand were interrupted, I believe that its premium would rise moderately. Many people are familiar and comfortable with the Krugerrand and would be prepared to pay a reasonable surcharge for that comfort. If the premium were to rise too high investors would turn to other coins and this would place a ceiling on the premium. We stress that it must be a popular coin. The vital factor is the demand for the coin. It does not follow that because there is relatively few of a particular coin type available its premium will rise. A case in point is the South African 2 Rand. Since the introduction of the oz. Krugerrand the 2 Rands premium has dropped in South Africa.
Liquidity
The liquidity of an investment is the ease with which it can be converted into cash. It is always easy to buy a coin but not many investors consider how easy it will be to sell the same coin. If you can sell you will not always get a similar deal on different types of coins. On some coins the spread (difference between a dealers buy and sell prices) is much greater. This spread will usually give a good indication of the liquidity of the coin the smaller the spread, the better the liquidity. The liquidity is a reflection of the general acceptability of the coin the better it is, the quicker you will sell or trade that coin. A coin liquid within the U.S. is not necessarily liquid elsewhere in the world. For example, the Krugerrand is the most liquid gold coin in the USA., but in the Middle East the Sovereign is the most widely accepted gold coin and the Krugerrand is traded in very limited quantities. Another example is the Mexican 50 Peso. It is very liquid in the U.S. and is popular in South America but not in Britain. The spread is the dealers profit and this comes out of your pocket. This is another reason to choose a coin with the smallest possible spread.
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Currency Collapse
What will happen if we see a collapse of the paper money? Gold and silver coins will resume their traditional role, at least for a while, as every day money. This is why they have also been called chaos money. In this situation, the more common and well known the coins you own, the better. In the case of gold coins the high purity, but soft, coins such as the Maple Leaf and 4 Ducat and the small bars, should be avoided. They are not robust enough for general circulation. Most of the other popular gold coins have 8 to 10% copper added to the gold. This gives them the necessary hard wearing quality. Preferably buy coin types that have their pure gold content clearly displayed on the face of the coin. Specifically these are the Mexican 50 and 20 Peso and the Krugerrand family (but not the 2 Rand). An added convenience would be to have a small proportion, say 15% of your gold bullion coin holdings in the smaller coins such as the and 1/10 (one tenth) Krugerrands. These can be used for smaller trades or purchases. Finally, you will have to be on constant guard against fakes check every coin with your Fisch gauge before accepting it.
Gold Coin Confiscation

In 1934 the U.S. Administration decreed that all gold coins, except those which could be considered rare, had to be turned in to the Treasury. Those who obeyed the directive were paid out $20.67 per ounce. Less than a year later the same Administration raised the price of gold to $35 per ounce. Could this happen again, and, if so, which coins would be affected? Although this possibility cannot be completely discounted it is most unlikely. The authorities must know that it would be extremely difficult to enforce. Many Americans have their coins stored in private safe deposits or buried in secret caches. In 1934 the decree had only limited success, and todays more cynical attitude towards government further reduces the prospects of compliance. If gold coin confiscation were announced the consensus is that rare coins would, as in 1934, be exempted. In 1954 the Treasury declared that all coins minted before 1933 would be considered rare. This would seem a likely ruling in the future. If you decide that gold coin confiscation is a real possibility we recommend that to be absolutely safe you place 20% of your gold bullion coin investment in truly rare (numismatic) coins and not in common date Double Eagles and Sovereigns.
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GOLD COIN AND BAR RATING CHART

International Liquidity Counterfeiting Risk Total Points Out of 60 Overall Investment Rating order of Merit Value for Money Potential Premium Increase U.S. Liquidity Legal Tender Status Chaos Money
Austria 100 Corona* Austria 4 Ducat* Britain Sovereign old* Britain Sovereign new* Canada Maple Leaf Canada Maple Leaf oz Canada Maple Leaf 1/10 oz. China Panda 1 oz. Gold Standard Corporation 1 oz. Hungary 100 Corona* Mexico 50 Pesos* Mexico 20 Pesos* Mexico 1 oz. Mexico oz. Mexico 1/10 oz. South Africa Krugerrand South Africa Krugerrand South Africa Krugerrand South Africa 1/10 Krugerrand South Africa 2 Rand U.S. $20 * (Double Eagle) U.S. $10 * (Eagle) U.S. Gold 1 oz. & oz. Credit Suisse 1 oz. bar
6 7 1 0 9 9 9 8 8 6 6 8 6 7 7 6 7 7 7 8 2 3 8 5
10 8 5 5 7 4 3 6 7 10 7 7 8 5 4 7 5 4 3 4 1 2 4 8
6 5 1 2 6 3 3 3 0 6 5 7 5 3 3 5 4 3 3 5 5 5 0 3
8 4 4 4 9 7 7 3 2 5 9 6 5 4 4 10 7 7 7 6 6 6 4 4
5 3 9 9 5 4 4 2 0 4 5 4 3 3 3 8 5 5 5 3 5 5 3 4
5 4 4 4 5 5 5 4 4 5 9 9 8 5 5 10 10 10 10 6 6 6 7 4
R R L L L L L L R R R L L L L L L L L L L -
40 31 24 24 41 32 31 26 21 36 43 39 35 27 26 46 38 36 35 32 25 27 26 28
3 13 20 20 3 11 13 17 22 7 2 5 9 16 18 1 6 7 9 11 19 16 17 15
* Common date varieties Ratings are from 0 (least desirable) to 10 (most desirable) L = Legal Tender R = Restrike
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FISCH GOLD BUYERS GUIDE

GOLD COIN & BAR SPECIFICATION TABLE
COIN OR BAR TOTAL WEIGHT OF COIN 41.6666g 1.3396 troy oz. 16.6666 g 0.5358 troy oz. 34.559 g 1.111 troy oz. 31.1033 g 1.000 troy oz. 33.8753 g 1.0891 troy oz. 33.933 g 1.0909 troy oz. 16.966 g 0.545 troy oz. 8.483 g 0.272 troy oz. 3.393 g 0.109 troy oz. 7.9881 g 0.2568 troy oz. 33.4368 g 1.0750 troy oz. 16.7185 g 0.5375 troy oz. 34.559 g 1.111 troy oz. 17.279 g 0.555 troy oz. 31.1033 g 1.000 troy oz. 7.797 g 0.250 troy oz. 3.130 g 0.100 troy oz. WEIGHT OF FINE GOLD 37.4999 g 1.2057 troy oz. 14.999 g 0.4823 troy oz. 31.1033 g 1.000 troy oz. 31.1033 g 1.000 troy oz. 30.4876 g 0.9802 troy oz. 31.1033 g 1.000 troy oz. 15.551 g 0.500 troy oz. 7.775 g 0.250 troy oz. 3.110 g 0.100 troy oz. 7.3224 g 0.2354 troy oz. 30.0933 g 0.9675 troy oz. 15.0466 g 0.4838 troy oz. 31.1033 g 1.000 troy oz. 15.5516 g 0.500 troy oz. 31.1033 g 1.000 troy oz. 7.797 g 0.250 troy oz. 3.130 g 0.100 troy oz. FINENESS
MEXICAN 50 PESOS MEXICAN 20 PESOS MEXICAN ONZA CREDIT SUISSE (1 ounce bar) 100 CORONA (Austrian & Hungarian) KRUGERRAND 1 OZ. KRUGERRAND OZ. KRUGERRAND OZ. KRUGERRAND 1/10 OZ. 2 RAND/BR. SOVEREIGN U.S. $20 (1850 1933) U.S. $10 (1838 1933) U.S. 1 OZ. U.S. OZ. MAPLE LEAF 1 OZ. MAPLE LEAF OZ. MAPLE LEAF 1/10 OZ.
900 900 900 999.9 900 916.7 916.7 916.7 916.7 916.7 900 900 900 900 999 999 999
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CHAPTER TWO SILVER
WHAT SILVER TO BUY?

Like many purchases, the decision to buy a product or service is usually more easy to make than the decision that follows: Which particular product or service to choose from the array offered? Well, that is true with silver too. There are even more alternative products available than for gold. But as with all investments, the one that you feel most happy with is the one that is right for you . . . . . The different methods of owning silver can basically be broken down into two groups: the silver investment where you take delivery of your silver and the silver investment that results in you taking delivery of a piece of paper that says that you own a certain amount of silver. Examples of this second method include futures contracts, warehouse receipts and assorted certificates. Most of these methods are perfectly legitimate methods but be ultra cautious in your choice of who to do business with. See Chapter Four Doing Business with a Dealer. There are often sound reasons for not taking delivery. The problem of storing large amounts of silver silver has a much lower density than gold and consequently takes up a lot more space or you may live a long way away from where you have bought the metal. Here we are only going to focus on a selection of the products available for delivery. Thoughts on selecting a dealer: While it might be true the best price will be from a big dealer at the other end of an 800 line, if you want to learn about the different products available do not overlook your local coin shop. The person behind the counter often has had years of experience and will be happy to answer all your questions. Just standing around listening to the conversations you will pick up a wealth of practical information. And their prices can be extremely competitive.
1 oz bar or round:
For investing on a small scale, it is best to stick to the major refiners products as the market is larger when the time comes that you want to sell. Generally, stay away from the so called art bars unless you are particularly fond of the picture stamped on it. When you come to sell that bar stamped Merry Christmas 1982 you may find that you will have to settle for less.
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1 oz Libertad:
This legal tender coin from Mexico is being hailed by its promoters as the Silver Krugerrand. It is claimed that in 1985 the coin will be the cheapest and best way to own silver when the mintage will be limited only by demand and a fixed charge will be added to the intrinsic value. The 1982 and 1983 dated coins have a claimed mintage of 1 million each. It is reported that the Mexican Mint is still counting the number of 1984 pieces struck. Coins with dates from these 3 years are being sold for as much as $11 each (with a minimum purchase of 10) by some promoters who call the 1 million mintage figure incredibly low. If you shop around a little you can still get them for about $2 over spot.
Silver Dollar (circulated):

The circulated variety of the Silver Dollar does not command anything like the premiums commanded by the uncirculated version. Coins of this nature are often referred to as junk silver and are mainly bought for their intrinsic value i.e. their silver content. While the premium asked is still substantial the following should be considered: In the past U.S. silver dollars have not been as affected by the fluctuations of the spot silver price, say a 1 oz bar. They are popular among investors who like to have silver as an insurance against monetary chaos and therefore are not sold when the spot price declines. As they contain 10% copper they are harder than pure silver and will stand up to rougher handling. They are legal tender and are underpinned by a face value. Finally, as they do have some numismatic or rarity value, they will benefit both by an increase in the premium over the price of bullion and by an increase in the price of silver.
10 oz bar:
If they fit the size of your pocket book, buy them. Stick to the will known products for the same reasons as for the 1 oz products.
Silver Dollar Roll (circulated 20 coins):

The same is true for a roll of silver dollars as is for one. The premium sometimes might be slightly lower.
100 oz bar:
With the price of silver at around $6/oz these bars are both a convenient size and price. A 100 oz bar can often be stored in the smallest safe deposit box.
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1000 oz bar:
The big daddy of them all. The major refiners products are accepted worldwide. This size bar is traded on the commodity exchanges. However it is rarely owned by the individual investor. As it weighs almost 70 lbs, it is difficult to transport. It is also a sizable and non-divisible investment.
Bag of U.S. Silver coins with $1000 face value / 90% silver from before 1965:
Made up of dimes, quarters and half dollars. A very popular and much touted method of buying silver for the same reasons given for the Silver Dollar. But with one big advantage: The premium is much lower.
Bag of Silver Dollars with $1,000 face value / 90% silver from before 1936:
A higher premium is asked than for a bag with $1,000 face value made up of dimes, quarters and half dollars. One thing to remember about premiums is that you tend to recover much of it when you resell. Both the bid and ask price will very likely reflect the premium.
Counterfeit Silver Risk Factor

Because of the lower value of silver, the risk of buying counterfeit silver is less than buying counterfeit gold. However, the risk exists and it is wise to exercise caution and common sense. The risk of counterfeit silver varies with the product. Silver bars have the greatest risk. The bigger the bar, the greater the profit a counterfeiter will make. The finish on the large bars is often rougher, making them easier to duplicate. There is also no way to check if the bar is genuine without having it assayed. Buy the products bearing the hallmarks of a major refiner. U.S. Silver Dollar: Recently there have been reports in the numismatic press of fake uncirculated silver dollars. These have been high quality counterfeits of rare coins commanding huge premiums. If you are investing in this type, read Grading and the Numismatic Coin. When buying the common circulated variety you will have to rely on weight checks and visual examinations. Read Avoiding Counterfeit Coins in Chapter One. 1 oz bars and rounds: There have been no reports of counterfeits. U.S. Silver coins dimes, quarters & half dollars: The size of the coins hardly makes it worthwhile to counterfeit the common circulated variety.
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If you are buying bags or part bags of silver coins: Dont think that by breaking the dealers seal on the bag that you are jeopardizing your investment. In fact the opposite is true: You need to check make sure you have what you paid for. If you have bought a bag of pre-1965 coins, check that that is what they are. The later date clad (See Chapter Six Speaking the Language) coins contain less silver. Also weigh the bag. Dont buy a latter day pig in a poke. The same applies to any precious metal sold in a sealed container. Break it and check what is inside.
Silver Product Price Comparison

Product 1 oz Round from major refiner 1 oz Bar from major refiner 1 oz art bar 1 oz Libertad (Mexico) Silver Dollar (circulated) 10 oz bar from major refiner 10 oz art bar Silver Dollar Roll (20 Coins) (Circulated) 100 oz bar from major refiner Bag of U.S. Silver Coins $1000 face value / 90% silver (circulated dimes, quarters & half dollars from before 1965) 1000 oz bar from major refiner Bag of Silver Dollars $1000 face value / 90% silver from before 1936 (Circulated)
Spot price of silver: $
$ $ $ $ $ $ $ $ $
+ $1.03 per oz. + $1.08 + $0.93 + $1.95 + 180% + $2.00 + $1.50 +180% + $0.75 + 25%
X1 X1 X1 X1 X 0.7734 X 10 X 10 X 15.47 X 100 X 723.4
$ $
+ $0.36 + 150%
X 1000 X 773.4
Major Refiners include Johnson Matthey, Engelhard, Credit Suisse, AMAX, ASARCO, Sunshine Mining & The Royal Canadian Mint. NOTE: While every effort has been made to ensure that this price comparison is an accurate reflection of the market, it is only a guide. Premiums tend to fluctuate and if you are making a large purchase it will pay to shop around. When calling for a price quote ask what extra charges for this such as postage, handling and insurance will be added to the total price. Sometimes these add ons can make a good price look bad.
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SPECIFICATIONS OF COMMON UNITED STATES SILVER COINS

COIN DIME (1892 TO 1964) QUARTER (1892 TO 1964) HALF DOLLAR (1892 TO 1964) SILVER DOLLAR (1892 TO 1964) WEIGHT 2.50 g COMPOSITION 0.900 Silver 0.100 Copper 0.900 Silver 0.100 Copper 0.900 Silver 0.100 Copper 0.900 Silver 0.100 Copper SILVER CONTENT 0.07234 troy oz.
9.25g
0.18084 troy oz.
12.50g
0.36169 troy oz.
26.73g
0.77344 troy oz.
A bag of pre 1965 silver coins made up of uncirculated dimes, quarters and half dollars with a $1000 face value contains 723.4 troy ounces of .999 fine silver. The bag is the size of a bowling ball and weights about 55 lbs. A bag of pre 1936 uncirculated Silver Dollars with a $1000 face value contains 773.4 troy ounces of .999 silver. The bag is slight larger than the above bag and weighs about 59 lbs. * The bags usually contain circulated coins which are worn and therefore will no longer meet the mint specification to weight.
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CHAPTER THREE PLATINUM

In comparison to the millions of U.S. investors who won gold and silver, the numbers who own platinum is small. But the number is growing, as more investors discover the investment potential of the strategic metal. Why is platinum referred to as a strategic metal? Here are the reasons: It is widely used by the aircraft and spacecraft industries. It is in short supply. While the approximate yearly worldwide production of silver is 10,000 tons and of gold, 1,000 tons, only 100 tons of platinum is produced. Each years production is absorbed by the marketplace and its uses are increasing. The two sources that account for most of the worlds productions are South Africa and the U.S.S.R. A continuing, steady supply is, therefore, not assured. (And they got the diamonds and most of the gold too!).
The physical qualities of platinum include a high melting point and a resistance to chemical attack. It has excellent workability and can be made into wire finer than 0.01 mm in diameter. It will also withstand repeated heating and cooling.
WHAT PLATINUM TO BUY?

The range of platinum products available is more limited that for silver and gold. The choice is between the bars and rounds of the major refiners such as Credit Suisse, Johnson Matthey and Engelhard and the new legal tender Noble coin from the Isle of Man. A legal tender coin is generally preferred over a round or bar as it is an official issue of a country, not a product of a private company, and thus will be more widely recognised. The Noble is the first minting of a legal tender platinum coin in 150 years the first were minted by Tsar Nicholas of Russia in 1821. It contains exactly 1 troy ounce of (99.95 minimum fineness) platinum. It could do for platinum investing what the Krugerrand did for gold investing.
SPECIFICATIONS OF THE PLATINUM NOBLE

Platinum Content Minimum Fineness Standard Mass (Weight) Diameter 1.000 troy ounce 31.103 grams 99.95% 31.119 grams ( 0.055 grams) 32.70 mm
32
CHAPTER FOUR DOING BUSINESS WITH A DEALER

We obtained permission from SILVER & GOLD REPORT to reprint the following article as it offers practical advice on how to avoid being ripped off when you buy gold & silver. Since this article was written, the gold and silver business has had its largest bankruptcy ever International Gold Bullion Exchange in Fort Lauderdale, FL. IGBE used a multi-million dollar advertising campaign to lure customers with offers of gold and silver at spot for those willing to wait for delayed delivery of up to 15 weeks. When the company was closed by court order in April, 1983, it was estimated that some 25,000 customers were still waiting for their gold and silver. IGBEs assets are estimated at $1.6 million its debts at between $20 million and $40 million. If these figures are correct, customers (now ordinary creditors, along with the Phone Company, etc.) can expect to receive between 4 and 8 cents on the dollar. SILVER & GOLD REPORT first warned their subscribers about IGBE 20 months before it collapsed. They repeated their warnings on 6 subsequent occasions. This is the kind of practical advice that you get from SILVER & GOLD REPORT. Other subjects covered are dealer price comparisons, detailed analysis of the gold and silver market and interviews with leading authorities on precious metals and the economy.
WHO LOSES WHEN A SILVER AND GOLD DEALER COLLAPSES. . .

14 Safeguards to Make Sure You Dont Get Burned By Daniel Rosenthal2 What a nightmare! You buy 100 Krugerrands through a reputable dealer. You put your $37,930 check in the mail promptly. You watch gold prices climb slowly but steadily. But your Krugerrands dont arrive. You phone the dealer and get a promise of prompt delivery. But no coins. You call again and get more promises. Finally, a month and a half later, you still havent gotten your coins. You really begin to worry. So you phone one more time. But now a recording greets you: The number you have dialled has been temporarily disconnected.
Daniel Rosenthal is editor of the Silver and Gold Report, an independent precious metals newsletter. Material in this article appeared in Silver and Gold Report and is copyrighted. All rights reserved. Precious Metals Report, Inc., Bethel, CT.
33
Farfetched? Not at all. Its a true story about just one of thousands of silver and gold investors burned by recent dealer defaults or frauds. On of the largest of these bankruptcies came on September 23, 1982, when North American Coin & Currency, grossing some $25 million a month, filed for reorganization under the Bankruptcy Act. There was no warning. There rarely is. North American was open for business as usual on the preceding Friday. Over the weekend, the board of directors met. They dismissed the president. They retained a law firm skilled in bankruptcy law. They then resigned in disgust and frustration over the mess that had been created. But the disgust and frustration the directors felt was surely nothing compared to what investors must have felt the following Monday. When they phoned, there simply was no answer. If they went to the firms offices to pick up their silver and gold, they still were out of luck. The offices were sealed. An armed guard was posted at the front door. It took about a month before the court-appointed trustee was able to sort through the mess sufficiently to give a preliminary picture of what had happened. He reported that somewhat over 2,000 creditors (almost all of them investors) were owed about $21.2 million. He estimated that, if North American liquidated, investors would realize something less than 40 on the dollar.
Avoidable loss
A major part of the tragedy is that the investor losses were almost totally avoidable. North American has now reopened for business with stringent institutionalized safeguards. Had these safeguards been in place earlier, the investors almost certainly would have gotten their money back despite the bankruptcy.
Yes, the investors would have been inconvenienced. Yes, they would have lost liquidity for a few months. And yes, they would have been worried stiff. But match that against their current situation facing possible losses upwards of $10 million and the preference is obvious. The silver and gold business is crazy. Investors send $10,000, $20,000, even $40,000 to firms theyve never even heard of and whose credit theyve never checked out. They just close their eyes, lick and seal the envelope and send their checks winging away. Why expose yourself to unnecessary risks? Isnt it enough that silver and gold prices have a perverse way of going down when you expect them to go up and vice versa? Why risk losing your entire investment, especially when its relatively simple and inexpensive to safeguard it?
34
Just who is at risk when a silver and gold dealer goes belly-up? Investors who were stuck in the North American insolvency fall in the three main categories: Those who bought for delivery but had not received their silver and gold, Those who bought outright and stored with the dealer, or Those who had sold (and shipped) silver and gold to the dealer but had not received their funds yet. Add to those categories investors who buy silver and gold on margin, and you know who loses when a dealer goes belly-up. So how do you protect your investment? The general principle is to separate your funds from the dealers general operating funds first. Then, separate your silver and gold entirely from the dealer. The faster this is done and the greater the separation, the safer your assets are. Getting down to specifics, here are 14 things to look for: 1. Segregation of funds for the protection of clients. This is basic. When you send a firm funds to purchase silver and gold, you dont want your money used to finance loans to corporate officers, posh offices, real estate ventures, corporate jets, etc. Unless the dealer segregates investment funds in a trust arrangement to protect clients, your funds are mingled with the operating capital of the company and may be used for the firms own purposes. It the firm goes belly-up before you get your silver and gold, youll probably become just another general creditor along with the local stationery firm or furniture store, and with just as few rights. 2. Short delivery time. Its often hard to determine whether or not a dealer segregates your funds. Dealer literature often ignores the point; account executives tend to gloss over it with a facile, Dont worry. Dont believe them. Go ahead and worry. You should. Your funds are at risk. If youre buying to take delivery, two days is quite good. Two weeks is the most thats acceptable; two months is much riskier. 3. Avoid silver and gold at spot offers. These are typically for extended delivery programs. You send them good funds now. They send you your silver and gold anytime from 30 to 90 days later. In the meantime, youve made what is essentially an unsecured, uncollateralized, non-interest bearing and non-callable loan. If you get your silver and gold, youre okay. But if the firm goes into liquidation (as did United Coin Brokers, a silver and gold at spot dealer in Walnut Creek, California) who knows if youll ever get your money back? 4. Non-fungible storage of silver and gold, which means your metal is stored in units marked with your own name and stored in an independent
35
warehouse. You can go to the vault and look at, pick up and fondle the very bars and coins that are yours. Once youve paid storage charges, which are usually quite modest, you can take your metal home with you. This is probably the safest way to hold silver or gold, other than burying it in 10 feet of concrete in your back yard. Western Federal, a small firm in Scottsdale, Arizona, comes the closest to offering this select form of dealer storage. Customer silver and gold is boxed and labelled with the investors name. But it is stored in a bank vault which is in the firms name. Thus, its not impossible that a creditor might claim these were company assets. 5. Doubly removed storage. After non-fungible storage, the next best choice is having your silver and gold doubly removed from the dealer. International Precious Metals Corporation and Monex International, for instance, maintain client positions in a separate subsidiary (one removal). Then they segregate or label the metal as client property (second removal) Monex marks to market daily. But David Kahrnoff, their Vice President, Finance, tells us they are substantially over-segregated. (Note: The author is a long-time friend of the owner of Monex. He financed his own company with profits from Monex and still prepares a client newsletter to Monex. So he admits hes biased in Monexs favour.) 6. Take possession. If you have silver and gold in non-segregated storage with any dealer or broker, get it out immediately. Your funds are being mingled with the operating capital of the company. If the companys operations are suspended for any reason or if the company becomes insolvent, tough luck for you. If your dealer segregates funds or metal, you can afford to walk, not run, to the phone. There is a little less risk to your assets and, therefore, less urgency. But simple segregation, while helpful, isnt enough. Segregation agreements come in a million different combinations and permutations. Unless you have at least double removal, play it safe: Take delivery. In particular, International Gold Bullion Exchange, Premex and United Precious Metals do not segregate clients assets, to the best of our knowledge. So we do not recommend buying from them. If you have already purchased silver and gold from those firms, request immediate delivery. 7. Check for counterfeits. After you take possession, check for possible counterfeits. 8. Ask the dealer for a bank reference and follow it up. If the dealer wont give you one, go elsewhere. One dodge is, We dont want to bother our
36
banker with endless phone calls. After you make the purchase, well give you the reference. A lot of good that does you. Be sure to phone the bank reference. Ask how long the dealer has been a customer, what the banker knows about the dealers management and dont be shy would he personally do business with the firm? Be sure to ask the banker whether customer funds are segregated from general operating funds. What is the usual range of the firms balance? Has there been any recent significant drop in this average balance? Whats the dealers line of credit with the bank? You might think the bankers answer will be automatic praise, but it wont be. Banks may have legal liability if they give you puffed-up information. Weve been amazed at how lukewarm or even hostile some banker responses were. 9. Be careful about margin. Margin complicates matters in case of dealer insolvency, so it adds risk beyond the obvious one of high leverage. If you can honestly say to yourself that youre a sophisticated investor, you know silver and gold markets well and you have speculative funds youre willing to put at risk, then theres nothing wrong with silver and gold on margin at a reputable firm. If you hit it right, you profits will be multiplied by the power of leverage. If you hit it wrong, say bye-bye to your funds. You should not buy on margin with nest egg funds. 10. Sight drafts are probably the best way to buy silver and gold if youre taking delivery. You order the coins from the dealer and lock in your price, but you dont send the funds right away. The dealer pre-ships to a bank of your choice, usually to an assistant vice president or above. Once the coins are received, you have the right to inspect and approve them to verify authenticity. Only after youre satisfied your banker has exactly what you ordered do you release good funds. The banker forwards funds to the dealer and simultaneously releases the coins to you. Dealer policies vary widely on sight drafts. Monex and Bramble, for instance, do not offer them at all. First National Monetary Corp. of Southfield, Mich., allows sight draft purchases but discourages them with an almost prohibitive 1 % surcharge. By contrast, Western Federal and C. Rhyne & Co. encourage sight drafts by setting the fee at a nominal $25. North American Currency & Coin, now reopened in reorganization under the Bankruptcy Act, charges only $20. Manfra, Tordella & Brookes (MTB), one of the giants on the cash-and carry business, has no charge at all for sight drafts. Minimum order for a sight draft at MTB is $2,000, a very reasonable requirement.
37
11. Cash-and-carry is perhaps the next best way to buy silver and gold for delivery. You go to the dealer, give them good funds and pick up your silver and gold on the spot. Problems? First, not all dealers do cash-and-carry. For obvious reasons, they dont like to keep much silver and gold on hand. Second, when you pick up your metal, you have to walk out. Then youre at risk until you reach a secured storage spot. Third, you have to travel, and travel takes time. Time is the cost. And fourth, if you live in a sales tax state, it may cost you quite a bit extra. For these reasons, we recommend sight drafts over cash-and-carry. 12. Ask friends and associates for a reference before buying from a dealer. If they had a bad experience with a dealer an overly pushy account executive or excessive delivery time, for example take heed. It may be a tip-off the dealer is in trouble. 13. When selling silver and gold, however, dealers have shown no interest in reverse sight drafts. If you ship silver and gold to most dealers, your metal is simply mingled with their assets. North American at least sets your metal aside into a segregated pool of client assets until it sends you good funds. Thats one valid choice for you when selling. So is simply shipping your silver and gold to a dealer you feel very good about. Barring that, at this time the only alternative is to carry the silver and gold physically to a dealers premises and pick up good funds on the spot. Its inconvenient, but you dont have to worry about shipping your silver and gold off to some dealer a thousand miles away for promised payment you may or may not receive. 14. Warehouse receipts. These go by a variety of names including delivery orders and silver and gold certificates. They come in every different size and shape imaginable. However, two basic varieties are worth describing: non-fungible versus fungible. With non-fungible warehouse receipts, a specific unit of silver or gold is set aside in an independent warehouse, marked with your name as your property and typically, insured to your benefit against almost anything except fraud. With fungible warehouse receipts, your silver and gold is (at best) stored in an omnibus account along with the silver and gold of all other customers. You have what is called an undivided interest in the whole. To the best of our knowledge, there are only three issuers of preferred non-fungible warehouse receipts: Mocatta Metals, Brooks Armored Car Service and North American Depository. Mocattas receipts, the best choice, offer silver and gold stored non-fungible in a tax-free zone of Switzerland and insured by Lloyds of London.
38
If youre an American and want to get your funds out of the country fast, legally and with no reporting requirement whatsoever, we know of no better way than with these warehouse receipts. Conversely, if youre outside America and want to get your funds into the country, Mocatta also offers non-fungible warehouse receipts with Delaware storage. The warehousing is in a tax-free zone; insurance again is by Lloyds of London. These preferred warehouse receipts are for high rollers only. The minimum for Krugerrands is 100 coins over $40,000 currently.
39
CHAPTER FIVE GRADING AND THE NUMISMATIC COIN

What is a numismatic coin? A numismatic coin can be defined as a coin whose value is determined by its rarity and condition and not by its face or intrinsic value. The rarer the coin and the better its condition, the more it is worth. The main factor that affects the condition of a coin is the amount of wear that it has received. To be able to differentiate between the various stages of wear a grading system was introduced. What is grading? Grading is an attempt at standardization by placing coins with the similar amount of wear in the same category or grade. There are 15 grades each describing a different degree of wear or condition. While wear is the main factor in determining the grade, other factors such as the strike, the surface of the blank and the presence of toning all play a part.
Why is grading important? The grade given a particular coin is dependent on the amount of wear that the coin has received and this in turn is one of the main determining factors of how much the coin is worth. Consequently the overgrading of a coin by a seller can add thousands of dollars to the price. At present there is a loud debate taking place in the numismatics world about grading. The American Numismatic Association runs a grading service (ANACS) which, for a fee, will grade and authenticate any U.S. coin. More and more buyers, unhappy with overgrading by some dealers, have been turning to ANACS graded coins. Naturally, this has upset the dealers who do not sell ANACS grade coins. Problems have also arisen where a buyer has sent the coin that he has just bought at a certain grade to the ANA only to receive it back graded lower. No problem if it comes back graded higher, though! It must be remembered that grading is an art and not a science. Two numismatists with honourable intentions will sometimes not agree on a grade for a particular coin. The certificate given by ANACS is only an opinion on the grade. However it is an independent opinion. The final point to remember: It does not matter what grade a coin has been sold at or who has done the grading. The only grade that counts in the end is the grade that is set on the coin and which dictates the price when it is sold. For more information on how a coin is graded read Official ANA Grading Standards for United States Coins. It is available from our Book Division.
40
CHAPTER SIX SPEAKING THE LANGUAGE

If you are a new or potential investor in precious metals and/or rare coins you will have come across some words and terms in this Report that you dont understand. Here are the definitions and explanations of the words and terms used in this Guide and in the precious metal and rare coin industries
A B
D E F
Alloy: A combination of two or more metals. Assay: A test or trial to ascertain the fineness, weight and consistence of precious or other metal in a coin or bullion. Bag Marks: Minor abrasions on an otherwise uncirculated coin, caused by contact between coins in a Mint Bag. Bag marks are common on large heavy gold and silver coins. Blank: The piece of metal before it is struck by the dies to produce the coin. Also referred to as the planchet. Bullion: Uncoined precious metal in the form of bars, ingots, etc. Bullion coin: A coin whose price is determined solely by its gold, silver or platinum content. Circulated: A coin that has been in general circulation. A coin with AU or lower grade is circulated. Clad: All AU dimes, quarters, halves and dollars issued since 1965 are either silver clad or copper/nickel clad. The silver issue has an outer layer of 80 % silver and 20 % copper bonded to an inner core of 21% silver and 79% copper. The copper nickel issue has an outer layer of 75% copper and 25% nickel bonded to an inner core of pure copper. Take a look at a quarter if it is this type, the copper core will be plainly visible when you view the coin from the side. Counterfeit: Used interchangeably with fake. A counterfeit is usually manufactured from the same material as used to mint the genuine coin it is imitating. The counterfeiter making his profit on the difference between the net value of the material used and the premium which the coin will command. Die: The hardened metal punch, carrying the mirror image of the design to be stamped on the blank. Double Eagle: A United States $20.00 gold coin. Eagle: A United States $10.00 gold coin. Electrotype: A counterfeit coin made by the electroplating process. Face Value: the currency value of a coin. For example a Silver Dollar has a face value of one dollar while the silver value (0.77344 troy oz.) is much higher. Fake: Used interchangeably with counterfeit. A fake is usually made by substituting common metal(s) for the precious metal. By definition a fake has no intrinsic value. For more details read Avoiding Counterfeit Gold Coins.
41
G H
I J L
Q R
Fineness: The purity of the metal expressed either in karats or in terms of purity per 1,000 parts. Field: The flat (usually), background surface of the coin not used for the design or inscription. Grade: The condition or amount of wear that a coin has received. Generally, the less wear a coin has received the more valuable it is. Half Eagle: A United States $5.00 gold coin. Hallmark: The name comes from gold originally marked at Goldsmiths Hall in London. A bar is hallmarked when it has the name of the refiner, a serial number, weight and purity stamped on it. Intrinsic Value: Is the value of the metal in the coin as opposed to either the face value or numismatic value. Junk Silver: Used in trade to signify circulated pre 1965 U.S. silver coins traded either loose, in rolls or in bags. London Price Fix: This is the price for gold set in London at 9 a.m. and 3 p.m. Monday through Friday. At the time the fix is set it is the same as the spot price. However, the spot price will change as the trading continues. The fix is important as it is used as a reference for each days trading. Legal Tender: Currency explicitly determined by a government to be acceptable in the discharge of debts. Medallion: A piece, resembling a coin, which does not have legal tender status. Melt Value: The value of the metal in the coin. Also called intrinsic value. Mint Condition: The condition of a coin when it leaves the mint before it is circulated. Morgan Dollar: Also called the Liberty Head Dollar. Designed by George T. Morgan. Issued between 1878 and 1921. Numismatics: The science, study or collecting of coins, tokens, medals, orders and decorations, paper money and similar objects. Numismatic Coin: A coin whose value is in its rarity or condition not in its intrinsic or face value. Peace Dollar: A dollar coin issued between 1921 and 1935. Proof: A coin struck on specially prepared blanks with specially prepared dies to produce the finest specimen possible. Premium: The amount you pay over the precious metal value (intrinsic value) of a coin or bar is the premium. Quarter Eagle: A United States $2.50 gold coin. Reeded Edge: The edge of a coin with grooved lines that run vertically around its perimeter. Restrike: A coin produced from original dies at a later date. Round: Coins can only be issued by governments. All die-struck medallions, which are similar in appearance to coins, are referred to as rounds. Saint-Gaudens: The designer of the $20 gold coin issued between 1907 and 1933 was Augustus Saint-Gaudens. This coin is generally agreed to be the most beautiful of all U.S. coins.
42
U W
Slider: A coin actually below the grade indicated, but close. Also used to refer to a very worn coin. Sleeper: A numismatic item, the rarity or future value of which is not generally recognised. Spot Price: The current cash price quoted in unfabricated form. Due to the speed of communications, the spot price of the different exchanges will basically be the same as they fluctuate in response to supply and demand. The price you pay will be above the spot price as the cost of turning the metal into a coin or bar plus various commissions are added to the spot price. Sterling: Silver alloy used to make tableware, jewellery, etc. Legally defined as 925 parts silver and 75 parts copper. Uncirculated: A coin that has not been in general circulation. It should be in the same condition as it left the mint. Coins graded MS are uncirculated. Whizzing: The artificial treatment of a coin by wire brushing, acid dipping or otherwise removing metal from the coins surface to give it an artificial appearance of being in a higher grade. Whizzing almost always will decrease the value of a coin.
For a more complete listing we recommend Coin Buyers Guide by Bruno M. Larsen available from our Book Division and Introduction to Numismatics available from the American Numismatic Association, P.O. Box 2366, Colorado Springs, CO 80901.
43
CHAPTER SEVEN WEIGHTS, MEASURES AND CONVERSION FACTORS Weights and Measures
The Weight of Precious Metal 1 troy ounce = 31.1033 grams 1 troy ounce = 1.097 avoirdupois ounces 1 troy ounce = 480 grains 12 troy ounces = 1 troy pound 1 gram = 0.03215 troy ounce 1000 grams = 1 kilogram 1 kilogram = 32.15 troy ounces The Fineness of Gold 24 karats = 1000 fine 22 karats = 916.6 fine 21.06 karats = 900.0 fine 21 karats = 874.9 fine 20 karats = 833.3 fine 18 karats = 749.9 fine 14 karats = 583.3 fine 10 karats = 416.6 fine
The fineness of gold is expressed in parts of a thousand of an alloy. Pure gold is 1,000 fine or 24 karats. 750 fine (750 parts of gold contained in 1000 parts of alloy) is 18 karats. The relationship of fineness to karats is proportional. Fine Gold Content = Actual gold content exclusive of the other metal(s) in the alloy. Usually expressed in grams or troy ounces.
BULLION CONVERSION FACTORS

TO CONVERT Grains Grains Grains Grains Grams Grams Grams Grams Pennyweights Pennyweights Pennyweights Pennyweights Ounces (Troy) Ounces (Troy) Ounces (Troy) Ounces (Troy) Pounds (Troy) Pounds (Troy) Pounds (Troy) Pounds (Troy) INTO Grams Pennyweights Ounces (Troy) Pounds (Troy) Grains Pennyweights Ounces (Troy) Pounds (Troy) Grains Grams Ounces (Troy) Pounds (Troy) Grains Grams Pennyweights Pounds (Troy) Grains Grams Pennyweights Ounces (Troy) MULTIPLY BY 0.0647989 0.4166667 0.0020833 0.0001736 15.4323563 0.6430148 0.0321507 0.0026792 24.0 1.5551740 0.05 0.0041667 480.0 31.103481 20.0 0.0833333 5760.0 373.24177 240.0 12.0
44 1.09714 0.9114
Ounces (Troy) Ounces (Avoirdupois)
Ounces (Avoirdupois) Ounces (Troy)
KRUGERRAND SUFFERS SETBACK

The South African Krugerrand suffered a major setback in West Germany recently, when the Federal Court of Justice, that nations highest tribunal, ruled that the bullion coin cannot be used as money in public payment transactions, and therefore is not legal tender, within the meaning of West Germanys Criminal Code. According to reports, a decisive point for the judgement was the fact that, since 1967, the Krugerrand has been distributed to develop new categories of buyers for South African gold. It was also determined by the court that it is very difficult to obtain Krugerrands in South Africa itself. Information supplied by the Court of Justice of the European Community indicated that the coins can only be obtained there after a lengthy waiting period, and only against payment in hard currencies; that is, not against payment in South African rands. The Federal judges found that legal recognition as a means of payment does not qualify the Krugerrand as money. If gold was sold in Germany in the form of coins because it sells better that way than in bar form, it cannot be given more protection under penal law than bar gold, the court ruled. At best, the judges allowed that the Krugerrand is a coin which is struck for commercial purposes, but which is not money. There is not danger, they ruled, of confusing the Krugerrand with South African rand currency. The immediate effect of the West German high courts decision was to free five persons found guilty of counterfeiting Krugerrands from prison. The five were convicted by the Regional Court of Munich of procuring 349 silver imitations of the Krugerrand in the fall of 1981, after they had sold some of these pieces to a police detective and a confidential agent. The regional Court expressed the opinion that the accused were well aware and accepted the fact that the coins would be sold as genuine pieces to credulous third parties, either in gold plated form or in silver. The Federal Court of Justice removed the legal protection provided against counterfeiting from the coins by determining that they were not, in fact, legal tender as that term is meant to be understood.
Reprinted from Coin World th 30 May, 1984
Dealer bemoans Counterfeit Ruling by Wilbur W. Cochran, ANA 99475

As incredible as it may seem, the counterfeiting of foreign coins and currency is not illegal here in the United States, according to a recent decision rendered in U.S. District Court in Portland, Maine. On July 7, Anthony F. Webster and Rudy Zoffoli were acquitted on charges involving counterfeit gold Krugerrands. A third person, Richard Falvey, had pleaded guilty but was dismissed on July 31. Although the U.S. Attorney had clearly shown that the defendants had committed the acts they were charged with, the judged ruled that no crime had take place since the Krugerrand is a foreign coin and though legal tender in South Africa, it has no legal tender status in the United States. The judge ruled that only those coins issued by authority of Congress or declared by Congress to have a legal tender value in the United States were covered by U.S. counterfeiting laws. Under this decision, the counterfeiting mills reportedly operating in Italy, Lebanon, and the Far East can move here and freely operate. As a reputable foreign coin dealer, I feel this decision if left unchallenged could adversely influence our hobby despite the Hobby Protection Act. As a U.S. citizen, I cannot expect other governments to help our Treasury Department combat the counterfeiting of U.S. coins and currency if we freely allow the counterfeiting of their currency.
Reprinted from The Numismatist (Journal of the American Numismatic Association) September, 1981

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Fisch Precious Metal Buyers Guide

__________________________________________________________ Chapter Two Silver 24

__________________________________________________________ Chapter Three Platinum 29

__________________________________________________________ Chapter Four Doing Business with a Dealer 30

__________________________________________________________ Chapter Five Grading and the Numismatic Coin 37

__________________________________________________________ Chapter Six Speaking the Language 38

__________________________________________________________ Chapter Seven Weights, Measures and Conversion Factors 41

FOURTH EDITION: MARCH 1985 1985 Fisch Instruments

FIFTH EDITION: OCTOBER 2008 2008 Fisch Instruments

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

CHAPTER ONE GOLD A LESSON FROM HISTORY1

Fisch Precious Metal Buyers Guide

GOLD COIN COUNTERFEITING A WORLD-WIDE INDUSTRY

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

SPOT THE FAKE!

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

AVOIDING COUNTERFEIT COINS

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Gold Bullion Coin Counterfeiting Materials

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Specific gravities (Densities)

Fisch Precious Metal Buyers Guide

THE SAFEST COINS TO BUY

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Value for Money

F12* MS60 F12 MS60 F12 MS60 F12 MS60

*Denotes grade of coin

Prices quoted February, 1985

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Fisch Precious Metal Buyers Guide

Gold Coin Confiscation

Fisch Precious Metal Buyers Guide

GOLD COIN AND BAR RATING CHART

Fisch Precious Metal Buyers Guide

FISCH GOLD BUYERS GUIDE

Fisch Precious Metal Buyers Guide

CHAPTER TWO SILVER

WHAT SILVER TO BUY?

Fisch Precious Metal Buyers Guide

Silver Dollar (circulated):

Silver Dollar Roll (circulated 20 coins):

Fisch Precious Metal Buyers Guide

Counterfeit Silver Risk Factor

Fisch Precious Metal Buyers Guide

Silver Product Price Comparison

X1 X1 X1 X1 X 0.7734 X 10 X 10 X 15.47 X 100 X 723.4

Fisch Precious Metal Buyers Guide

SPECIFICATIONS OF COMMON UNITED STATES SILVER COINS

0.18084 troy oz.

0.36169 troy oz.

0.77344 troy oz.