A COLLECTORS MUST HAVE SILVER ONE OUNCE

MINTED FROM THE STRATEGIC SILVER STOCKPILE IN 1981

THE OBSERVE SAYSONE TROY OUNCE

SILVER TRADE UNIT

WHICH STANDS FOR CONTINENTAL COIN

THE RESERVE SHOWS A BEAUTIFUL EAGLE STANDING ON IN GOD WE TRUST.

IT IS STAMPED .999 FINE SILVER ,ONE TROY OUNCE,31.1 GRAMS

SILVER TRADE UNIT

SO MUCH HISTORY BEHIND THIS COIN

ONE COIN IN THIS AUCTION

Issue: Silver Exchange Fund Transfer (ETF)

Silver Market

Between 1966 and 1970, U.S. Treasury sales of silver were a major secondary source of supply. Because silver had been a U.S. monetary standard along with gold, the U.S. government held the world's largest source of secondary supply in an effort to meet a growing production/consumption deficit. In 1965, it appeared that in less than two years the Treasury would effectively lose control of the price of silver. If silver had been allowed to rise above $1.40 per ounce, the silver content of U.S. coins would have been worth more than their face value, causing them to disappear from circulation. Under the Coinage Act of 1965, Congress eliminated the use of silver in coins and authorized the mining of cupro-nickel substitutes and the sale of silver to the public. The right of holders of U.S. silver certificates to redeem them for silver was suspended in 1968. The following year, a federal ban on the melting of U.S. coins was lifted, freeing anywhere from 400 to 700 million ounces for secondary recovery.

In late 1970, the General Services Administration was authorized by Congress to release the national strategic stockpile of silver to the Treasury Department, primarily for coinage of new commemorative silver dollars (40 percent silver content). The same act provided for the auction of approximately 3 million old uncirculated silver dollars (90 percent silver). In 1973, the Cost of Living council freed commercial-grade silver from price ceilings imposed the year before to allow domestic silver to advance to current international price levels. Silver has reacted erratically to world political and economic news in recent years. The New York spot settlement price for silver has ranged from a low of $3.92 in 1975 to a high of $48.70 in 1980.

In the early 80's, the U.S. government's strategic stockpile of silver was locked in by law at 139.5 Moz. Congress has since authorized legislation to dispose of these stockpiles. In late 2000 the U.S. Defense National Stockpile Center delivered its remaining stockpile of nearly 15 Moz to the U.S. Mint for coinage programs. Since 2001, the U.S. has had to purchase silver for its coinage programs from the open market. This has boosted silver consumption by 1% annually.

Background on ETF

An ETF is an Exchange Traded Fund, created under the Investment Company Act of 1940. They are index-based products, which hold a portfolio of securities that is intended to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the underlying benchmark index. In the case of a Silver ETF, the index would track the silver price and be backed by physically vaulted silver. Gold ETF's gained popularity in the recent commodity bull markets as investors were attracted to an alternate form of gold investment other than mining shares, options, futures and physical. Many are interested in gold from a 'buy and hold' perspective. Each unit that is bought on the gold ETF has resulted in physical gold metal being purchased on the open market and stored in a vault. In total, these gold ETF's have contributed to 250 tons of gold being purchased in the open market, approximately $3.4 billion dollars.

Impact of Silver ETF

Fortunately we do not have to look back very far to see the impact a significant amount of allocated silver would have on the market. It was 1998 when Warren Buffet purchased over 100 million ounces of physical silver and the spot price rallied over $3 dollars and one month lease rates soared over 30%.

Commodity markets such as Palladium have proven that consumers will search for alternative sources to substitute their need for metal if the market becomes too pricey or illiquid. As it is, silver can be an illiquid market because there are few central banks which own silver. Silver is inexpensive in terms of commodities, and its volatility is typically 2-3 times that of gold.

These are both reasons investors are drawn to the market. A silver ETF would only exaggerate silver's illiquidity given the sheer volume of physical silver needed to be shipped and stored. While a silver ETF might initially provide price benefits for producers, we believe it would disrupt the market in the short term and may harm the market in the long term.