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Junk Silver, Market Anomalies & Precious Metals: An Analysis of Kaiser Johnson’s Liberty & Finance Broadcast (February 23, 2024)

Key Concepts:

• Junk Silver: US dimes, quarters, and half dollars minted before 1965, containing 90% silver. Priced by face value, calculated to approximate silver content.
• Bullion: Precious metals in bar or coin form, valued primarily for their metallic content.
• Numismatic Coins: Coins valued for their collectibility as well as their metal content (e.g., pre-1933 US gold coins).
• Premium: The amount paid above the spot price of the metal.
• Spot Price: The current market price for immediate delivery of a precious metal.
• Price Anomaly: A deviation from typical market behavior, presenting a potential buying opportunity.
• Refiners: Companies that process scrap metal to extract pure metals.
• PSLV/PGLD: Sprott Physical Silver Trust & Sprott Physical Gold Trust – ETFs backed by physical metal holdings.
• Battlebank: A platform facilitating loans collateralized by precious metals.

I. Introduction & Broker Role (0:00 – 1:30)

Kaiser Johnson of Liberty and Finance, a broker for Miles Franklin Precious Metals (a family-owned dealer operating for approximately 40 years), hosted a live Q&A session on February 23, 2024. The session focused on addressing broker-related questions, market conditions (specifically the physical precious metals market), calculating junk silver value, evaluating IRA companies, and identifying misinformation within the precious metals online space. Johnson emphasized his expertise lies in the day-to-day operations of retail precious metal dealing, contrasting with market analysts and geopolitical experts frequently featured on the platform. He addressed initial technical difficulties with time zone announcements. Subscribers were instructed to ensure they could comment by subscribing and enabling notifications.

II. Junk Silver Market Analysis (1:30 – 6:30)

The primary focus of the broadcast was the current state of the junk silver market. Johnson noted a recent and unusual trend: junk silver premiums are lower than those for bullion. Historically, junk silver premiums have been higher than bullion premiums (e.g., 5-6 years ago, bullion traded at $1-3 over spot, while junk silver was higher).

• Recent Pricing: As of the broadcast, 10oz and 100oz bars traded at $4-6 over spot, 1oz rounds at $2-4 over spot. Junk silver was available at spot price, a significant deviation.
• Historical Pricing: In 2022-2024, Miles Franklin was buying junk silver at $9 over spot and selling at $12-13 over spot.
• Calculation of Junk Silver Value: Junk silver is priced by the ounce, but sold by dollar face value. Pre-1965 US dimes, quarters, and half dollars are 90% silver. The industry standard assumes approximately 0.715 troy ounces of silver per $1 face value (accounting for wear and tear). 10 ounces of face value equates to $14, while $10 face value equates to 7.15 ounces.
• Reason for Anomaly: This low premium is considered a “price anomaly” as highlighted by Andy Schectman (CEO of Miles Franklin). Factors contributing to this include a recent surge in silver prices (reaching $105-120/oz) prompting some to sell junk silver, coupled with limited buyer demand.
• Strategic Implications: Johnson advised taking advantage of this anomaly, as junk silver currently represents the best value in the silver market.

III. Refining Backlogs & Silver Market Dynamics (6:30 – 10:00)

The surge in silver sales, particularly junk silver, has created a backlog at refineries.

• Refining Delays: Refineries are experiencing 6-12 week delays in processing silver, including silverware and sterling silver. This is due to the labor-intensive process of separating metals and preparing materials for refining.
• Retail vs. Refining: Dealers typically sell junk silver retail, but when faced with a glut, they may sell to refiners.
• Impact on Premiums: The increased supply of junk silver contributed to the further reduction in premiums.
• Importance of Transactability: While stacking for preparedness is valid, Johnson emphasized the importance of holding silver in forms that are easily transactable (e.g., American Eagles) for potential future trading or bartering.

IV. Gold Market Anomalies & Numismatic Coins (10:00 – 14:30)

Johnson identified a similar price anomaly in the gold market: numismatic (collectible) gold coins, particularly pre-1933 US gold coins, are trading at unusually low premiums, sometimes even below spot price.

• Pre-1933 Gold Coin Details: These coins (e.g., $20 Liberty, $10 Liberty, $5 Liberty, $2.5 Liberty) contain varying amounts of gold (e.g., $20 Liberty = 0.9675 oz, $10 Liberty = 0.4838 oz).
• Premium Comparison: Historically, numismatic coins trade at higher premiums than bullion coins like American Eagles. Currently, ungraded MS-62/MS-63 numismatic coins are trading at or below Eagle prices.
• Strategic Opportunity: Johnson recounted a previous instance where he and his brother traded all their gold holdings into numismatic coins due to a similar price discrepancy.
• Fractional Gold Options: Pre-1933 gold coins offer fractional gold ownership options.

V. Investment Vehicles & Resources (14:30 – 18:30)

Johnson addressed questions regarding investment vehicles and resources for precious metals investors.

• ETFs: He recommended the Sprott Physical Silver Trust (PSLV) and Sprott Physical Gold Trust (PGLD) as relatively reliable ETFs backed by physical metal holdings, contrasting them with derivative-based ETFs. Disclaimer: This is not financial advice, merely his personal investment.
• Battlebank: He highlighted Battlebank (battlebank.com) as a platform allowing loans collateralized by precious metals.
• David Morgan’s Article: He directed viewers to an article by David Morgan (a precious metals expert) on identifying misinformation and AI-generated content in the precious metals space. The article can be requested via email at libertyandfinanceprotonmail.com.

VI. Addressing Misinformation & Concluding Remarks (18:30 – 21:00)

Johnson cautioned against alarmist claims circulating online, particularly regarding government confiscation or artificial price floors for silver. He reiterated the importance of critical thinking and verifying information from reliable sources. He encouraged viewers to contact Liberty and Finance with further questions and promoted the upcoming “Market Update” with Andy Schectman. He emphasized the core reasons for owning physical precious metals: tangible asset ownership, inflation hedging, and financial independence.

VII. Notable Quotes:

• “Junk silver is at this very depressed price, but that’s not where it normally is. So, it’s a great time to be able to move into it.” – Kaiser Johnson
• “The reason you have [physical precious metals] is not for immediate speculation… it’s to have a tangible asset, something that you have in your possession.” – Kaiser Johnson
• “If you want to be able to use your silver, use your gold, if you want to be able to trade or swap, you’re better off being out of 100 ounce bars and in something that’s more transactable.” – Kaiser Johnson

This summary provides a detailed and specific account of the broadcast, preserving the technical language and nuances of the original transcript. It aims to be a comprehensive resource for those seeking to understand the current state of the precious metals market as presented by Kaiser Johnson.