THE NEW RCM $20 SILVER COIN. WHEN IS A TWENTY A TWENTY?

The Royal Canadian Mint has begun issuing $20 silver coins that are exchangeable for bills or coin money at face value...It's a small reversal of a decades old trend that has seen all currencies world wide become tokens with no intrinsic value...All our money is now made of polymer and steel for example whereas our coins were sterling silver and 80% silver along with copper and nickel at different points in Canadian history. The silver $20 coins can be ordered online where mailing costs are incurred but one can also walk into the RCM retail store at 752 Granville, and other RCM shops around Canada, hand over a $20 bill  (or steel coins) and receive a solid, 9999 silver, $20 coin! The limited issue coin won't be sufficient to transfer wealth from the fed to the trouser pockets of the nation en masse but this is a rare and valuable chance to take silver out of government coffers with no premium....I don't know of anywhere else in the world where this is currently possible. http://www.mint.ca/store/product/coin_exchange.jsp?itemId=prod1660011&sp_rid=MjgxNDM1MTM1NgS2&sp_mid=5827421&spMailingID=5827421&spUserID=MjgxNDM1MTM1NgS2&spJobID=69260611&spReportId=NjkyNjA2MTES1

The silver coin thing is a strange thing when one is trying to attach value for the holder. 

The $20 silver coin that the mint is issuing weighs about 1/4 of an ounce.  On the spot market (that is the wholesale price of silver via the commodities market today) that's about  $7 bucks worth of silver...So why would anyone pay $20 bucks for that much silver?..Well because you aren't buying silver, you are buying Canadian money.  The second reason is because the retail price of silver which is the price that you and I can pay for  a small amount at a store is much higher.......But still not not $20 bucks for a 1/4 ounce ...So why would anyone...?...Well because the mint says it's worth $20 bucks that's why and the mint has the hammer.   When we are talking about money, the mint calls the shots....The mint says that a piece of paper or polymer is worth $20 bucks and there's no silver in those bills at all.   But wait you say, if I can buy more silver for less money at a coin dealer's retail store such as J&M  then why would I pay $20 bucks for a coin with only a 1/4 ounce silver.   Which amounts to $80 bucks an ounce, when I can buy full ounce of silver for $35 bucks at a retail store?   Well because the 1 ounce silver maple leaf coin has a face value of only $5 bucks.  Even though it's legal tender, it's not designed for circulation as money because no one would spend a full ounce of silver to get $5 bucks worth of stuff at a store.   But we would be much more likely to spend a 1/4 silver coin that has a legal tender value of $20 bucks because we are only giving up a little silver.  But the seller would still be happy because he'd rather have silver than paper or polymer.

So it's still clear as mud right?..Yep....There's more.  A big reason why folks hold silver is because it's international currency...It's transportable wealth....The problem with holding debased currency ,especially coins that are made of little or no silver or gold, is that the world runs on paper money.  Coins generally can't be used at an international money exchange, can't be used at an ATM and if they have  intrinsic silver or gold value then one will likely have to go to a precious metals/coin dealer to get full value.  What does this all mean?  Well what it means is that we still need paper and polymer $20's.  But when the mint offers a silver $20 coin for paper $20....We should jump on that chance.  The coin will always have purchasing power of $20 in Canada plus we are getting a 1/4 ounce of silver in the bargain.  These coins have the backing of the Canadian Fed as legal tender AND the backing of the silver market for as far into the future as anyone can look.  If the price of silver goes down to a $1 an ounce one can always spend the coin and receive $20 bucks worth of gas or bread and anyone will exchange it for a paper $20.   If the price of silver goes to $80 bucks an ounce then the coin can be sold for 4 paper or polymer $20's!  That said, if you want to invest in silver because you believe the price will rise or because you want to create a doomsday fund then you should buy 1 ounce silver maple leaf coins because you get more silver for your money. You could still spend them if you had to and if the price of silver went to $1 an ounce they'd still be worth $5 bucks each.  The bottom line is.....Trade some of that paper cheque or that direct deposit or some of those paper $20's for silver and gold coins.  The future is uncertain but I'm not being apocalyptic.....Just look at what has occurred in Cypress these last few days.  The jury is still out on who will have his/her money seized by the state and how much.....The banks have been closed to prevent people from withdrawing their money.  This situation is a perfect example of why people should hold their own money in precious metals outside the bank or any other institution....Because when we need our money most of all, the bank will likely be closed TO STOP US FROM GETTING AT OUR MONEY!  And Cyprus is a Euro-zone country!  There are no guarantees in life as we all know.  We all like to think that this kind of thing won't happen in Canada but even if it doesn't there are good reasons for diversifying some of our wealth into precious metal coins.The coincidental occurrences of the Cyprus banking crisis and issuance by the RCM of the $20 silver coins can serve as a reminder.
  There are those who lament the move away from the gold standard that governments around the world have made in the 20th century.   Perhaps using cash that's made of gold and silver doesn't make sense in the modern economy. But for those of us who simply want our money to be made of traditional gold and silver instead of some sort of polyester resin like Mylar, Canadians are living in one of the very few countries in the world where this still is done.