Silver face values

[ady]

Hi Silveries,

I do not want to sound like a broken record, having asked about the face value ratios inbetween gold and silver in different nations.

Having been a junk and one ounce round buyer I have recently bought some beasts and see the 2oz face value £5 and the 10oz is £10 (not £25) or an equivalent per weight. Is this discrepancy common when buying sets of coins that are released in different weights of the same metal. I appreciate I am investing in the weight but these ratios are annoying me.

Ady

[knighthawk]

I'm not sure what the real reason for the face values being what they are is but I think they just put face values on them to make them CGT free.

Could be wrong but that's the reason the local coin shop guy gave me when I asked.

[STONE]

Pretty much any newer silver coin with a denomination on it is just symbolic at best. The face values are nowhere close to what they can actually buy...

[Flobberchops]

It's a weird one, isn't it? I read once that the face value is there as a kind of guaranteed floor value if for example the value of the metal plummeted. But the enormous difference between the face value and the actual bullion worth makes that seem unlikely to ever come into play.

Most of the sites I checked mention a face value as being important to classify the coin as legal tender and therefore CGT exempt - all fine and dandy until you notice the Sovereign doesn't have a face value, so there goes that theory! As a base metal coin collector I'll also point out that pre-1990 Crowns were (and are) legal tender but also missing a face value.

I'd love to hear the definitive answer if anybody knows it, at least for the situation here in the UK ?

[Lowlow]

I think it's as simple as having to put a value on it in order for it to be currency.

[SILVERFINGER]

So what happens say in 20 years when £2 will probably buy you the equivelant of a packet of crisps, will the face value of these coins still be the same or will it be upped inline with inflation ? will the face value of the coins become worthless and out of date ? 

[sixgun]

21 minutes ago, SILVERFINGER said:

So what happens say in 20 years when £2 will probably buy you the equivelant of a packet of crisps.

i think you will find a better quality packet of crisps is already £2 - no need to wait 20 years.

http://www.mysupermarket.co.uk/tesco-price-comparison/Crisps/Kettle_Chips_Lightly_Salted_150g.html?TrackingCode=AQEDAAE.hfPamvKN9kulqEeIZ5q6eA

[sixgun]

A face value is put on the silver pieces to make them coins - coins are legal tender. There was a discussion sometime ago about a Republic of Ghana African Leopard coin where there had been a mistake in the face value and too high a value had been put on the coin - it was more than the value of the silver.

A value is put on the coins to make them coins - it doesn't reflect the value of the silver or gold. It is just a value for legal reasons. The 1oz Britannia is £2. The QB coin should be £4 and the 10oz should be £20 - but we know these amounts aren't applied using the £2/oz guide of the Britannia. So there is no logic even if the £2 value on an ounce started out logically.

[Lowlow]

2 hours ago, sixgun said:

A face value is put on the silver pieces to make them coins - coins are legal tender.

Sixgun is right here, it's the difference between a coin and a round.

Think of it like a mark of purity, except instead of informing about the purity it informs about its legal status as currency.

[SILVERFINGER]

6 hours ago, sixgun said:

i think you will find a better quality packet of crisps is already £2 - no need to wait 20 years.

http://www.mysupermarket.co.uk/tesco-price-comparison/Crisps/Kettle_Chips_Lightly_Salted_150g.html?TrackingCode=AQEDAAE.hfPamvKN9kulqEeIZ5q6eA

I wouldnt pay that for them, they are only £1 a huge bag at my local super, I was on about the small 28g bags.

[immmelting]

My theory is that when governments come looking for your precious metals, they will only have to give you face value as exchange.

[RoughDog]

What if you hammer the coin so that is looses it's details.

[danmc82]

6 hours ago, RoughDog said:

What if you hammer the coin so that is looses it's details.

Then its scrap metal.

[Lowlow]

Oh, and to add something to my post above, I assume you were asking about why coin values are put on bullion coins, and not junk, since junk coin values are obvious.

With U.S. junk, the weight of the coins is directly related to its face value for most 90% silver.  So, for example, a 50 cent piece weighs 5x as much as a 10 cent piece.  And you can add the face value up to arrive at troy ounce weight - 1.40$us face value is approx 1 troy ounce in 90% silver.

[StackemHigh]

Sovereign for a long time were used as legal tender and with no face value. Nothing was perceived unusual a about this and worked out just fine. 

People just knew what it was worth and used then. Today we know what they are worth but don't use them and have a  nominal value of £1 i believe. 

[Coolsmp]

On 24/09/2018 at 02:16, Flobberchops said:

It's a weird one, isn't it? I read once that the face value is there as a kind of guaranteed floor value if for example the value of the metal plummeted. But the enormous difference between the face value and the actual bullion worth makes that seem unlikely to ever come into play.

Most of the sites I checked mention a face value as being important to classify the coin as legal tender and therefore CGT exempt - all fine and dandy until you notice the Sovereign doesn't have a face value, so there goes that theory! As a base metal coin collector I'll also point out that pre-1990 Crowns were (and are) legal tender but also missing a face value.

I'd love to hear the definitive answer if anybody knows it, at least for the situation here in the UK ?

Sovereign's have a face value of £1 and commemorative crowns have a face value of 25pence

[Pete]

A forum member was selling fairly recently the WWII silver series of commemorative coins with a face value of £20 for £16 I think.
Cannot spend them in the shops though despite showing Lizzie and legit coin stuff making them look like real money.
I believe when the RM first issued them they were deemed legal tender but then backfired so the RM instructed the banks not to accept.

[sixgun]

35 minutes ago, Pete said:

A forum member was selling fairly recently the WWII silver series of commemorative coins with a face value of £20 for £16 I think.
Cannot spend them in the shops though despite showing Lizzie and legit coin stuff making them look like real money.
I believe when the RM first issued them they were deemed legal tender but then backfired so the RM instructed the banks not to accept.

But i seem to remember the RM would buy them back for £20.

[Pete]

56 minutes ago, sixgun said:

But i seem to remember the RM would buy them back for £20.

Maybe when they were first issued after their mis-description and only with an original receipt purchased from them.
Probably only get 90% of scrap value if they bought them back today which would be less than £6 each.

[sixgun]

Then you need to keep it in case you have a bill you need legal tender for.