So I bought a few silver eagles. That's right...I bought some legal tender. To be specific - I paid $19.66 per one dollar coin consisting of one troy ounce of 999 fine silver with a spot price at the time of $16.00. They are very handsome coins considering where they come from. My first thought was that this is one of the few things our government does really well...until I did some research. Yes, their quality control is above par by almost all standards - but I began to think about why they go to such trouble to mint these. Turns out they began back in 1986 as a means to try to balance the yearly federal budgets by minting their defense stockpile of silver which at the time was over 105 million troy ounces. They have been pumping them out every year since then. By 2002 the reserve was gone and from then on their profit margin has taken a serious hit as they now have to purchase silver on the open market to keep up with demand. They are on schedule to produce a record 45 million silver eagles this year. So why do they go to such trouble to make these? Because the buck doesn't stop there. Although they are legal tender, they do not go into circulation - rather they are collected, horded, and resold in the secondary market. The twist to their scheme is that they tax the capital gain profit up to 28% when sold or exchanged. Even with that, I don't believe we will ever see a balanced yearly budget again...not to mention a national debt of over 18 trillion with an additional 200 trillion in unfunded liabilities. 75,81,57,0,C
