Last year on this site I posted a series on buying survival silver for beginners. In part three of that series I warned about the onslaught of counterfeit silver dollars flooding America from China. That flood is now reaching near epidemic proportions. Even seasoned professional coin dealers and collectors have reported being fooled by some of the coins they’ve come across.
As recently as a year ago, the most ubiquitous fake coins were Morgan silver dollars, the U.S. dollars that were in circulation in your great grandparent’s day. But now unscrupulous Chinese counterfeiters are flooding us with a larger assortment, including Walking Liberty 50 cent pieces and the popular American Silver Eagle. Most of these coins are created to look well worn, complete with dings, scratches, and grime because often the older and more beat up a coin looks, the harder it is to detect as a fake.
Since the Chinese government has no problem with Chinese factories churning out phony American coins, there has been no limit to the number of these things currently being sold to unwary American investors. Fake American coins are coming over here by the hundreds of thousands, and they are getting ever more difficult to detect. Most people aren’t aware there’s a problem, so they aren’t even on the lookout when they make their purchases.
Since a great majority of Americans now investing in silver are new to the game, many of them are unwittingly buying coins made of lead, copper, or steel, with only a thin veneer of silver coating. Many of these counterfeits are even fooling the experts; coin dealers are reporting actually purchasing some of these coins without realizing they are fakes. Numismatists claim this is the number one threat to their industry right now.
If even coin dealers are having trouble telling the real from the fake, it is more important than ever for you to be careful who you buy from. In part four of my series I warned of the dangers of buying silver on Ebay. I think the time has come to seriously emphasize that danger. Don’t get me wrong; I love Ebay. I’ve found lots of bargains there on lots of items. But I have never, ever seen a good bargain in the hard money category.
Let me make this very clear: If you’re shopping for gold or silver, Ebay is a very, very risky place to be -especially if you’re considering buying Morgan silver dollars.
Why? Because right now there are people selling fake Morgan dollars on ebay who don’t even know that the products they’re selling aren’t genuine. Why would they? A lot of these sellers are no different than you or I. They bought something a while back they thought was a good investment, and now they’re just trying to turn it for a profit. No one ever told them they were holding a fake.
Things can only get worse. Sometime in the future the U.S. paper dollar will surely fail. At that time, those who had the wisdom to tuck away some silver coins will likely begin to use those coins again as money, since they are legal U.S. tender. What happens when those hundreds of thousands of Morgan silver dollars suddenly come into circulation and no one can easily tell the real ones from the fakes?
That’s why my advice is to see that your silver savings is made up mostly of U.S. dimes and quarters, with a smattering of Franklin half dollars and one ounce silver rounds. There is no telling how unpopular a Morgan silver dollar will be when no one is sure whether they should take one or not. Many people aren’t sure about Morgans already.
When you buy a one ounce silver round, be sure it has the words “One Troy Ounce Silver .999″ stamped on it. That doesn’t guarantee it’s genuine, of course, but that should be the first thing you look for on a round before you buy it. It used to be that a coin or a bar from a reputable mint was a pretty good guarantee of authenticity, but now the counterfeiters are even faking perfect replicas of prestigious Johnson Mathey bars. So far, those fakes seem to be mostly in the 100 ounce bars, but when the price of silver takes off again, I wouldn’t be surprised to start seeing perfect replicas of one ounce Johnson Matheys.
China has no laws preventing the counterfeiting of all types of collectibles, as their government officially considers them “replicas.” But those near perfect replicas are showing up in Europe and America by the boatload, and mixing with the supply of real silver coins.
Our own United States government does not seem very concerned about all this. But then, the US government isn’t keen on people preparing themselves against the collapse of the dollar, so I guess government apathy in this regard can be expected. Those who would be our overlords would welcome panic and uncertainty in silver.
As the US economy weakens, growing numbers of Americans who don’t know the first thing about purchasing gold and silver are entering the market every day. Those who are engaged in counterfeiting silver coins are counting on the ignorance of these newcomers. They know there is a lot of money to be made by taking advantage of this growing trend toward gold and silver.
If you are new to buying survival silver, get educated as to what to look for and what to buy -and what not to buy. (My own series on this website is a good place to start.) If you must buy your silver sight unseen, buy it from a reputable online dealer. But remember, even the major investment houses have been burned. So be careful.
I’ve said this before, but it bears saying again: You shouldn’t be spending money on investment silver if you haven’t first put aside a sufficient store of food. If your objective is to survive the coming hard times, remember to put first things first. Then when you do set out to start buying silver, make darn sure the stuff is real.
(Previously by Rock: “Your Job May Be At Risk Because of People Like Me.”)