During the 1970’s and early 80’s the U.S. had an abundance of silver held in reserve. The US also had an abundance of debt.
There were various plans to sell this silver for use in various programs. Occasionally sales of some of the silver did occur. Invariably this would drive down the value of silver on the market and the results were never as successful as hoped.
In 1981, looking to balance the budget, President Reagan got legislation approved for 75% of the silver in the stockpile to be sold over three years. A few months later, upon anticipation of the sale of the silver stockpile, the price of silver dropped dramatically.
Due to the terrible effect of the upcoming sale of silver from the government reserve, the bill was stopped by further legislation late in 1981.
In 1983, Senator Jim McClure of Idaho had a bright idea. His proposal was to sell stockpiled silver, but to do so in a way that wouldn’t adversely affect the silver market. This was the birth of the American Silver Eagle Bullion Coin. It took some time, but in 1986 the first American Eagle Silver Bullion Coin was produced.
Specifically, what is a bullion coin?
‘Bullion’ is a form of a precious metal such as gold, silver, or platinum, from which coin metal alloys are made. In its pure form it is usually sold and traded in the form of bars and ingots.
American Silver Eagle Bullion Coins are 99.9% pure silver and have a weight of one troy ounce (31.103 grams). These coins are valued chiefly on their bullion content. Of course, they can have a numismatic value greater than their silver content.
American Silver Eagles have a value of one dollar stamped on them. Regardless of the value of silver which comprises it, the coin will always be worth at least one dollar in the U.S.. However, the coin has never been worth that little.
How does one place a value a bullion coin? One should consider the weight and amount of precious metal included in the coin. Then, one can check the current price of the precious metal the coin is composed of at such websites as kitco.com. For specific instructions, see the article below, in the REFERENCES section, The Spruce Crafts- A Definition of Bullion Value. Of course, don’t forget to check the numismatic value of the coin as well. It may be worth more to a coin collector than it does for its bullion value.
The American Silver Eagle has been a success since its inception. However, there is a major problem with them which has not fully been solved by the U.S. Mint. They get milky spots on them. These spots don’t often show up for quite some time after they are minted and at times show up after they have been slabbed and graded. Special care can be taken to clean them by professionals, but this will adversely affect the numismatic value of the coins.
Although the mint is concerned about this, it has not fully found a solution to the problem. As they are minted chiefly for their bullion value, it does not garnish as much attention from the mint as would other coins.
Bullion coins can be included in some IRA programs. The term for this is ‘Bullion IRA’. I included one article on this in the REFERENCES section below.
Wikipedia – American Silver Eagle
The Spruce Crafts – What is Bullion?
Quora – What’s the difference between bar, bullion and ingot?
My Coin Guides – Silver Eagle Mintages
The Spruce Crafts- A Definition of Bullion Value. How to calculate ‘bullion value’
CoinWeek – The Coin Analyst: Collectors Crying Over Milk-Spotted American Silver Eagles
Gold IRA Guide, American Silver Eagle Coins