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What Bullion Coins are Spendable?
By Patrick A. Heller, Numismatic News
April 14, 2014

This article was originally printed in Numismatic News.
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The U.S. Dollar Index has fallen below 80. Nations such as China, India, Iran, Russia, and others are seeking to eliminate the U.S. dollar in making payment for international oil transactions. It is not a joke to contemplate alternatives should the U.S. dollar continue falling in value so far that it might as well be worthless.

Actually, since the Federal Reserve was established in 1913, the value of the U.S. dollar has fallen more than 98 percent against an ounce of gold. There is no reason why this massive depreciation should stop at today’s level.

When the first Federal Reserve Notes entered circulation in 1914, either a $20 note or a $20 gold piece would purchase a top quality men’s suit. Today, the double eagle still can.

Back when U.S. 90 percent silver coins were circulating in the mid 1960s, you could purchase a gallon of gasoline for a quarter. Today, that same silver quarter will still buy a gallon of gasoline.

As the citizens of Indonesia learned when their nation’s currency plummeted in value during the 1997 Far East Currency Crisis, it wasn’t safe to have all of their wealth in paper assets denominated in the local currency. Those who did were pretty much wiped out. Indonesian citizens who owned gold saw their lifestyle largely unaffected.

The prospect of a failed U.S. dollar scares me. Look at the news reports of the civil unrest in Madrid, Spain, just last week. If the dollar collapses, I fear widespread unrest and chaos all across America.

In such a scenario, most Americans – those who do not own an insurance position of physical gold and silver, will lose most of their wealth and be poverty-stricken. Holding other currencies will not be sufficient as a sinking dollar will tend to drag down all paper money. Only those with the foresight and financial savvy to have physical precious metals in their direct custody will have ready alternatives for making purchases.

If you wanted to own precious metals solely on the basis of what would be most practical as potential spending money, here are some of my thoughts:

• Avoid platinum and palladium. The citizens of the world have no experience spending such metals. They have almost no history of monetary usage.

• Look for the units that represent the smallest value possible. A one-ounce gold coin or bar is easy to store and transport, but it would be difficult to make change if you wanted to buy a loaf of bread or a gallon of gasoline.

• Avoid coins and bars of pure gold (.9999 fine). Pure gold is such a soft metal that it dents and scratches easily. This advice does not necessarily apply in the Far East and Middle East, where pure gold is often the only acceptable form for trade.

• To start with, it would be helpful for each piece to be marked with its purity and net precious metal content. However, people living in most of history where gold and silver were spending money learned the relative metal value quickly. So, metal content of anything that circulated widely in decades past, such as U.S. 90 percent silver coins or British sovereigns, will be easy to spend.

• Although precious metals are traded in troy ounces of weight, I suspect that metric units will ultimately be more practical. Therefore, products containing an even number of grams of precious metal content might spend easier than those denominated in troy weights.

• Smaller European gold coins will tend to become popular even though their precious metal contents are not either in troy weights or metric units. British sovereigns (.2354 oz. gold, about 7.32 grams gold), French, Swiss, Belgian, Italian and other Latin Monetary Union 20 francs, or lire, (.1867 oz. gold, about 5.81 grams gold) circulated in many parts of the world.

• U.S. 90 percent silver coin has a distinct advantage of large available supplies, easy divisibility (where one dime contains almost exactly 1/14th of a troy ounce of silver), and is familiar to all Americans aged 55 and up.

• Initially, government-issued coins and bars are likely to be more trusted than private issues. Among private issues, long-recognized brand names such as Engelhard, Johnson Matthey, Credit Suisse and the like will tend to trade more readily than short-history brand names.

• Each part of the world will likely trade coins and bars fabricated domestically.

Here in the United States, I would establish holdings that include larger gold coins and bars (up to 50 grams in size and silver bars up to 100 troy ounces in weight to take advantage of lower premium levels. But, I would make sure to include smaller size gold coins such at the 1/10th and quarter-ounce American Eagles. I don’t know if the U.S. silver Eagles would continue to trade at a premium above private issue one-ounce rounds, but I would include some just in case. I would also own some well-known brand names (see COMEX-approved refiners and fabricators at widely available in America. Last, I would have a significant quantity of U.S. 90 percent silver coins. Because of their divisibility, I think they could easily end up being the preferred spending money in a post-U.S. dollar America.

What do you think?


Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He owns “Liberty Coin Service” in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at Other commentaries are available at Coin Week ( and He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” ( His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at

More Coin Collecting Resources:

• Kick-start your coin collection with the Fundamentals of Coin Collecting set of essential resources and tools.

• Strike it rich with this U.S. coins value pack.

• Build an impressive collection with Coin Collecting 101.


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On April 15, 2014 verdemg said
I keep three months worth of living expenses in 90% silver. Mostly dimes since it is the smallest demonination and easiest to use for smaller purchases.  Most of this was aquired from auctions at just above spot price.  I like 90% US silver because it is easily identified (Design, Date, and Sound) by the average person on the street.      
On April 15, 2014 almostgem said
Hoping it never comes to that. My wife collects 1/10 ounce Gold US and foreign bullion coins, (25/page, and I think she's got about 2 1/2 pages worth. We also have complete sets of 1 ounce Silver Eagles, Maple Leaves and Mexican Onza's, In addition, I have about 100 ounces of Silver rounds. Don't have too much junk silver, but may have to invest in some. It just annoys me that there is such a premium over spot for all bullion since 2008. When Silver hit 40 I sold several 10 ounce bars, and really haven't looked back on that :)
On April 15, 2014 Chris Kiefer said
This article provides really interesting insight into common items an ounce of gold would by a century ago versus today, but I wonder if the translation is so clean among major, life-critical purchases: the price of a home, the cost of college, and the expense of a major medical emergency--three major elements that can involve financial wipeout even in good times. When thinking about financial disaster, perhaps it is also wise to look at these three historic purchasing metrics as well.

The advice is solid about what coins to hold in case of US dollar collapse. Regarding the history of platinum and palladium, I agree with the article's assessment from a US perspective, but I wonder about Russia, which issued platinum- (and palladium-?) based coinage in historic times. Since these metals are mined in Russia, I wonder if the local population was more accepting of these coins during their numerous periods of calamity.

During financial disaster, I personally would expect much of the numismatic premium on coin values to vaporize (like it did during the 2012 gold frenzy). If people are so desparate to be using gold and silver to buy bread, then it's likely far fewer people will have the luxury to even think about collecting coins. Of course, with fewer numismatic buyers comes lower numismatic prices. In other words, "Can a coin collecting market only exist in rich, stable environments?"
On April 15, 2014 Ian Fenn said
The comments re pure gold being preferred in the middle East is incorrect.  They accept any Gold coins   If any gold coin rules in the middle east it is the Gold Sovereign.  They even make replica Gold Sovereigns ( always hall marked as required by local laws).
On April 16, 2014 Jonathan said
I recommend that everyone who read this article also visit It helps explain why this is happening and what will happen after it does.
On April 16, 2014 Chris Mc said
I always give high marks to Pat Heller's work. I'd add that financial crisis--economic collapse--will require new approaches to commerce and new ways of thinking about money and items of wealth that most folks have not yet faced.   I hear the often used comment that you won't buy a loaf of bread with a gold Eagle. No, you'd buy the bakery, or contract to buy bread for a year. Why worry about buying a new home with gold, when the housing market is in shambles? More likely, you'd contract for needed shelter on a rental basis.  How would you value your FDR 90% dime or your one ounce Gold Eagle if the dollar is destroyed, or hyperinflation is doubling prices monthly, or daily?  Would there even be official or standardized prices for goods and services, or would values depend entirely on immediate personal or community needs?  Why should your smart phone or any utilities still work if there's diminished infrastructure to support them?  Would a case of fine bourbon or a case of butane lighters be as valuable as a share of your neighbor's backyard garden or a water filtration system?  Economic collapse in the USA will extend world-wide, which limits your movements and your options.  Yes, various gold coins might be better recognized in Asia or Europe, but how are you going to get there? Do you plan to just take a cattle boat with the coins in your pocket?  More likely, those who wish to survive will learn very quickly what has value and what does not. My suggestion is to prepare for new definitions of wealth that you have never considered before.  Gold and silver should be part of that new definition,since they've served that purpose for thousands of years, but so should other tools of survival. If you cannot afford a $1300 gold coin today, perhaps you can afford $100 in non-perishable items to sock away for that rainy day.   Prepare to accept restrictions of all kinds and a lowered standard of living, at least for awhile. Economic collapse which Mr. Heller describes means just that--collapse.  Survivors will be those who learn to adapt and who have prepared to adapt.   
On April 17, 2014 Boswell said
(I just bought one ;-)

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