Friday, 13 March 2015

An article by Gary Lazeo on Canadian silver coin investing




An article by Gary Lazeo on Canadian silver coin investing.
Dated August 15th 1977



    Personally, I find the subject of Canadian silver coins very intriguing particularly the dimes, quarters and half dollars dated from 1937 to 1966.

Numismatically speaking, I have considerable greater appreciation for Canadian coins of the Victorian and Edwardian eras because of their superior designs and greater historical significance.

However, after scanning the entire spectrum of the Canadian coin market, I have concluded that, of the currently most common coins, the ones with the greatest potential for price appreciation are the silver coins dated 1937 to 1952.

The total face value of Canadian silver coins minted is approximately $192 Million. That's alot of coins, unless you have an understanding of Gresham's Law. To quote Sir Thomas Gresham, "When two coins or money's circulate side by side, with one have a greater intrinsic value that the other, the one with the greatest intrinsic value will quickly be withdrawn from circulation. The bad money drives out the "good."

Our first example of Gresham's Law was in early 1968 when world silver prices hovered around $2 per ounce. As a result a Canadian quarter was the worth about 30 cents, or a 20 per cent premium over face value. Needless to say, the Canadian silver coins soon disappeared from circulation, until late 1968 when silver prices again went below $1.50 per ounce.

During 1968, it is estimated that Canadian silver coins with a face value of $16 million hit the melting pot. When the price of silver in 1968, until early 1973, there was not a move in silver prices significant enough to warrant another run on coins. From this period to date, 1973 to 1977, world silver prices averaged approximately $4.25 per ounce, with the result that 99.9 percent of silver coins disappeared from circulation once again confirming Gresham's Law.

From figures established by the major Canadian silver coins dealers, it is estimated that from 1973 to date, another $65 million was removed from circulation, all of which was destined for the melting pot. It is estimated that 95 percent of this figure actually reached its final destination.

Recent figures from the Royal Canadian Mint indicate that approximately $58 million face value of Canadian silver coins have been smelted by their refining department to date.

From the figures arrived at so far, we find that approximately $145 million face value of Canadian silver coins have been melted to date, or approximately 75 per cent of the total mintage of Canadian dimes, quarters and half dollars between 1937 and 1966.

Now, if my conclusion is correct, according to the official mintage figures, of the remaining 25 percent Canadian silver coins, 15 percent of these coins are dated between 1953 and 1966 and the remaining 10 percent between 1937 and 1952.

However, the interesting factor is that if we calculate the yearly rate of disappearance or consumption, theoretically by 1982 there will be less than 10 percent of the total mintage of Canadian dimes, quarters and half dollars dated between 1937 and 1966 remaining.

Of this 10 percent, approximately 6.5 percent will be coins dated between 1953 and 1966 and 3.5 percent will be coins dated between 1937 and 1952. This will represent a total of approximately $19.2 million face value will be dated 1953 to 1966 and the balance of $6.7 million dated 1937 to 1952.

A face value of $6.7 million represents less than 30 cents per person in Canada of coinage dated 1937 - 1966.

From this point on we could get very technical and figure out grades, denominations and the future percentage availability of the same, however I feel that we can reach a logical and, possibly very profitable conclusion - Canadian silver coins from 1937 - 1952 offer the profitability of above average numismatic appreciation potential over the immediate years ahead. - Gary Lazeo 

























Gary Lazeo


Gary Lazeo