Stake Your Claim

My son has a friend, Corey, whose grandfather in the 1960s regularly tossed things into a suitcase for all his grandkids, knowing that someday the knicky-knacks would be all that was left to water the garden of their memories of him and his influence.

My dad encouraged me to collect coins when I was a kid, and when I heard this story about Andy’s friend, my ears perked up when it got to the part about silver quarters and half dollars.

Hmm, I thought, that’s pretty cool. When I was a kid I used to collect pennies and dimes and jam them into “Blue Books”, those thin, slotted, fold-out cardboard coin-collector books with blue covers. Mine were all slobbered-up with thumbprints from chocolate bars I’d stuff down my piehole during hobbytime. When I started collecting coins, silver was still in circulation, and I thought about the samsonite silver-mine that Corey and his sister and cousins were dealing with now. That suitcase must weigh a ton. I’d heard about “prospectors” sorting through rolls of coins and occasionally finding something shiny made before 1965.

So what the heck, I’ll try it. A box of half-dollars (50 rolls) was $500 and if I'd find nothing interesting, it’s still money and I'd take it back to the bank or spend it on nachos at Taco Bell.

I bought two boxes, unwrapped 100 rolls and whoa whoa whoa found a couple of 40%-silver kennedy half dollars! With the price of silver at that time at $13/oz, I thought it was pretty slick since a 50-cent piece was worth three bucks - for each coin that I cash in, I can buy two friends refill cups of huehuetenango light roast at Zanzibar’s Coffee. The more I find, the more friends I make ... AND the more opportunities I have to say the word 'huehuetenango' !! (go ahead, say it 10x fast)

And the THRILL after such braincell-burning drudgery looking for that one, odd coin! I would unwrap each roll and hold the whole stack sideways before dumping it onto the table so I could see each coin edge. The silver ones looked white or light grey and if you dropped it on a solid surface they’d ring like a bell. When wifey and I would sort together (oh my gawd it was so romantic!!) I could hear the silver ones as she dropped hers on the stack.

I became a ‘regular’ at the bank and started looking at other people in line like they were claim-jumpers. I would ask at the teller-window if anyone else was sorting, you know, to kind of run inquiries on who the competition was. They were muscling in on my territory and I wanted to find the strike before they did. And those boxes of 1000-coins each were so freakin’ heavy, I think I pulled my back humping them from the car to the kitchen. I started ordering and reserving boxes ahead of time.

The way the cash pipeline works at most banks is they have contracts with armored car companies like Rochester Armored Car Systems, or Brinks, who take bags of banded currency and counted coins from the bank branch and deliver fresh boxes of rolled coins and bills in return. When a bank runs all their loose change from the day through their coin-counter, they’ll fill a thick-plastic coin bag the size of a gunny sack, seal it shut and mark it with a dollar amount. Rochester Systems then “buys” it from the bank during their weekly deliveries. Bags of coins picked up from the prior week are sorted at Rochester’s, rolled, then boxed and “sold” back to the bank.

Armored car companies act as the middle-men between cash on the street and the Fed. They are the couriers who deliver to their customer banks the freshly printed cash and newly minted coin from the regional Federal Reserve banks (our closest is in Kansas City). These companies also return worn-out bills back to the Fed to be destroyed. Millions of dollars in old currency are burned in the furnaces of Reserve banks every year. When I lived in Boston I worked across the street from the Federal Reserve and watched the black smoke regularly pluming from the stacks of the burners which they stoked every week on Wednesdays.

Anyway, I started ordering two boxes of half dollars twice a week just to make sure the bank had the coins on hand – I might have been too careful -- who uses half dollars anymore except grammy and grampy when they give junior a novelty roll for his birthday, or maybe the mafia when they stuff a bunch into a pillow case to beat some tough guy because he ratted on somebody? While I sorted, anything discarded was thrown into my plastic return bag. This would go back to the bank and the banker would dump the sixty-pounds of sorted half dollars into their counting machine and exchange it as cash for a couple of new boxes filled with 50-rolls each.

Over a 10-month period we sorted through $75,000 face-value worth of half dollars -- all of this while floating only $1000 cash (2x$500 boxes) at a time. The economy had collapsed 4-months earlier and we were beginning to see more silver pieces wind up in the rolls -- probably because people who didn’t know anything about coins would dump the occasional piece over the counter in their spare change.

Then we hit the mother lode ...

We brought a couple of boxes home one evening and started tearing the paper from the rolls and noticed that all the edges were white. Whoa whoa whoa we were going into shock ...

Some rolls were entirely silver, and all-in-all, we sorted out $350 face-value (700 coins!) of silver half dollars. Somebody had obviously dumped a coin collection for cash and we were gawking at it on our breakfast table.

That was when silver was 13 bucks an ounce. A couple of weeks ago it peaked at 50 and we cashed a little in before the price fell back down. We paid some bills, went to dinner, (NOT taco bell) and converted into some other serious investments like beer and comic books.

Silver is a commodity whose price is determined by the speculative swings of futures contracts traded in the metals exchanges in NY, London, and other financial centers. Oil prices change in the same way through speculative price swings of futures contracts by traders. Gold, too. They’re traded in a moshpit of buyers screaming for sellers at commodity exchanges, all the while looking for profit. This activity travels around the clock around the world from London, to New York, to Sydney, to Hong Kong, to Frankfurt, to London ending only on Friday afternoon 4:30pm for a quick break before starting up again Sunday at 5pm.

World Gold and Silver Prices

And there’s still opportunity in the mines. Silver has not fully peaked in price and is slowly moving higher again. There is a reputed shortage of the metal which is volatile juice for the traders’ bonfires to jack the prices even higher. And silver is not just an investment-grade commodity -- its reflective, conductive, and antibacterial characteristics reserve its place for use as a viable, commercial product. I hope that Corey will know this when he opens the suitcase and thinks of his grandfather and the simple foresight he had as a casual coin collector.