In the 1960s, America faced increased anti-communist military expenditures and expanded welfare funding, financed largely through printing dollars rather than raising taxes. The dilution of the dollar caused price inflation across the board, including the value of silver. Until 1964, United States currency featured dimes, quarters and half-dollars made from 90% silver, with lasting intrinsic value. However, starting in 1965, the government ended production of 90% silver coinage and began issuing copper-clad dimes and quarters with near-zero metal value along with half-dollars composed of 40% silver-clad material for a brief period. This period marked the beginning of silver’s demonetization.
In the mid-60s, few Americans recognized the slow dilution of their wealth held in dollars. Though hard to imagine today, there was no precious metals investing to speak of in the United States because gold bullion was illegal to own and silver was omnipresent in our day-to-day circulating coinage.
However, amidst these changes, Louis Carabini emerged as a pivotal figure. In the early 1960s, retired U.S. Navy Lieutenant Louis Carabini was introduced to the laws of economics and free enterprise. Through the understanding of classical monetary economics and the principles of Gresham’s Law, he correctly anticipated the further devaluation of the dollar and eventual appreciation of U.S. 90% silver coinage beyond its face value. Lord Gresham is credited with memorializing the understanding that an equivalent currency with greater intrinsic value will be retained while that of lesser or no intrinsic value will be exchanged.
In short, Louis Carabini accumulated five $1000 face value bags of 90% silver quarters during 1966 to just stack away in the attic for a rainy day. That day arose the next year when Carabini lent them to a friend and coin collector Dr. Neil Chamberlain, who wanted to buy a coin shop to source his collecting. This small coin shop, the ingenuity of Carabini, and the exceptional investor benefits of bags of 90% silver coins fostered a silver coin investment marketplace for America and the rapid growth of Monex.
Of course, the bullish story for silver itself was exceptional, but the investment advantages of bags of pre-1965 silver coinage prior to 1970 were extraordinary. These bags of 90% silver coins represented spendable currency with an investment floor face value of $1000 and a melt value that exceeded their acquisition cost—arguably the best investment of the 1960s. Furthermore, Carabini established a program for financing these silver bags through banks, offering fantastic investment leverage without the risk of a margin call.
Because of investor demand and a shortage of U.S. “on-shore” alternatives, the bank financing program quickly outgrew its capacity. The investment market had thought Swiss banks were the only game in town, even though they were precluded from direct solicitation in America. As word got out, Louis and his small coin shop established the contractual principles leading to the Congressionally created precious metals “Leverage Contract,” which was federally inaugurated in 1974.
Over the years, Monex and Louis Carabini contributed to the formation of the physical precious metals marketplace in America. Besides being an early adopter of an attractive two-way buy-and-sell market for 90% silver bags for investors, Monex worked with governmental agencies to establish taxation, regulatory, and administrative guidelines.
The legacy 90% silver coin bags continue to resonate with investors. Consider the timeless appeal of these historically significant bags and contact a Monex account representative today.
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The Predecessors to the American Silver Eagle The Mexican Libertad, introduced in 1982 and minted every year since its inception, holds the title of the first contemporary .999 fine silver bullion coin. Adorned with national symbols and the Angel of Independence, this coin features a rich and meaningful design. In contrast, the earlier Onza, which more…
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