Maggie Smith
Over the past months, many people have seen an email land their inbox containing the following phrase:
Five simple words can turn your paper money into real silver…
Since there are a large number of people out in the world who are legitimately concerned about the viability of the US currency, the message lures many people into a screen where a video starts playing automatically. This video runs for an unbelievably long time, and claims that there is a “loophole” in the banking system where you can say “five magic words” to force banks to turn your “paper money” into real silver.
Naturally, this seems like such a great deal that you can’t keep from clicking on the link …
Then you are taken to the membership form that requires you subscribe to the proprietary newsletter service before receiving this crucial bit of information. This is the point where you see that the “Normal” price is $99 per year, but for a “Limited Time” you can receive a subscription for only $39, which includes this valuable special report and many others.
So naturally you’re thinking that you might as well bite … after all, there’s a “Money Back Guarantee” and it’s only $39. What do you have to lose?
What’s the big secret?
Now we get to the nitty gritty … what’s this “Big” secret that lets you turn your paper money into real silver. How can you make the banks give you silver in exchange for your currency that is eroding in value by the minute? What is the hidden insight that will let normal people protect themselves against an imploding national currency?
The “answer” comes from the fact that up until this 1960’s, most US coins had silver content. (No surprise here)
Some of these coins are still in circulation, and carry a “Melt Value” that is well above their face value. (Again, no surprise)
If you find these coins that are still circulating, you have just found some “Real Silver” to help hedge against inflation. (Still looking for a surprise)
So how do you combine three facts that nearly everybody knows to create a “secret” strategy …
How do you use this “loophole?”
Here comes the “Five Magic Words” … you are supposed to walk into your bank and say:
Do you have half dollars?
By looking at the melt values of US coins through a site such as coinflation.com, you will quickly see that nickels stopped being made with silver after 1945, dimes and quarters stopped after 1964, and half dollars contained silver clear through 1970. Since there are fewer half dollars that circulate, and a higher percentage of the coins that contain silver, it stands to reason that you should be able to sift through half dollars you come across to find ones from the years when they contained silver.
So the idea is to purchase rolls of half dollars from the bank at face value and sift through the coins to find the ones that contain silver. This is the “secret” behind the “Five Magic Words” … trading your currencies for half dollars with a higher percentage chance of being made (partly) from silver. (Presumably this works for dimes and quarters as well, but those coins circulate frequently enough that most have been removed from the system already)
Does this work in real life?
So I walked into the bank with an expression of smug pride on my face, fully prepared to “stick it to the man” by trading my paper money for real silver. As I swaggered up to the teller and in my most cool and confident voice asked if they had half dollars, I received the following response:
We don’t carry half dollars anymore … as soon as we get them, they go right out the door.
So it turns out that the “secret strategy” didn’t get me very far, since most banks don’t hold very much (if any) inventory of half dollar coins. It is theoretically possible that you could find banks in more remote areas that still have half dollars in stock, but most banks in populated areas (which by definition are where most of us live) don’t seem to have many half dollars available.
Now add the value of your time into this equation. If you spend 30 minutes driving to / from the bank and talking to teller and your time is worth $30 per hour, you have just spent $15 of time value attempting to find half dollars with approximately $5 to $10 worth of silver in them. (Depending on the current spot price)
This begs the natural question … instead of trying to “stick it to the man” by sifting through hundreds and hundreds of coins to try and find some that were made a half-century ago, why not just produce something of value and buy some silver outright?
What this “Busted” myth teaches us is that there is a hidden cost in trying to capture “easy” money. There is nothing particularly insightful about anything in this “strategy” except for the unrealistic expectation that there will be endless half dollars just waiting for you to sift through them to find the ones that contain silver.
As usual, there are no shortcuts … The “secret strategy” isn’t very secret, and isn’t much of a strategy.
