Shire Silver Is A Scam!

In “Business Insider Trolls Against Gold“, I wrote in a comment “APMEX Fractional Silver is a better deal than Shire Silver.”

Shire Silver is an example of “nice idea, lousy execution”.  For Shire Silver, the premium to spot silver is too huge.  It is better to use fractional generic silver rounds from APMEX.

I didn’t realize this was an important subject, until someone left a hostile trolling comment:

“You can get 1/10 or 1/4 or 1/2 oz silver coins from APMEX, which is good if you’re using silver as barter money. APMEX fractional silver is a better deal than Shire Silver.”

If you’re talking about investments, yes using APMEX is a better deal than Shire Silver. But Shire Silver isn’t meant to be used as an investment. Its meant to be used as a currency or barter tool.

No one except hardcore gold/silverbugs are going to use traditional bullion for trade. Its too inconvenient, bulky, heavy, and the smaller coins are difficult for people to use. For example, how many times have you dropped a penny or dime on the floor only to have it roll under the store counter?

The masses moved to paper because for most purposes it is superior to coins. They don’t really care about inflation as long as its low and relatively consistent – even if in the long term it is very harmful. And even if we could temporarily get people back to using coins during a SHTF scenario, as things settle out people will desire a return to the convenience of paper. And of course, the typical “Problem! Reaction! Solution!” solution of the banksters would have everyone returning to a system that gives them control. That is where Shire Silver really shines. It breaks the cycle of control by giving the people a precious metal based currency that is approximately as convenient as paper.

And seriously, ounces are retarded.

Silver rounds are a much cheaper cost per ounce than Shire Silver. I don’t see the point of paying the substantial premium for Shire Silver.

Shire silver still is based on FRNs as money, according to this link. 1 gram = $2, 5 grams = $10. That is wrong thinking. The exchange rate from silver to FRN should be floating and not fixed.

1 troy ounce is 31.1 grams. 1/10 fractional APMEX rounds are $4.67 right now.  (spot = $34.55/oz when I wrote this)  To get 3.11 grams of shire silver, that costs $6.22. Shire silver is 33% more expensive than generic silver rounds.

Also, the 5 gram card has the same huge markup rate as the 1 ounce card.  That is wrong.  If you take into account the labor for making the card, the 5 gram card should be worth less than five 1 gram cards.

It is reasonable to pay a premium to spot for rounds, especially small denomination rounds.  Shire Silver is a ridiculously high premium, compared to what is available elsewhere.

It isn’t that hard to convert from grams, troy ounces, or FRNs. I know how to multiply and divide and use a calculator. Fortunately for the operators of Shire Silver, the people who use Shire Silver are mathematically and economically illiterate. They are idiots for paying such a huge premium to generic silver rounds.

I don’t see the advantage of cards vs. rounds. I could always laminate or protect my rounds. Even if cards are better, it isn’t worth a 33% premium.

1/10 of an ounce is small enough to make change for most transactions.  APMEX fractional silver is intended for use as barter money.  For serious investment, you should get 1 ounce or larger.  Otherwise the markup is too great, due to the cost of manufacturing the coin.

And seriously, Shire Silver is retarded and anyone who uses Shire Silver is retarded. Shame on Shire Silver, for overcharging people for silver. Shame on the people who use Shire Silver, for getting fooled so easily.

I appreciate the hostile trolling comment.  That indicates the importance of the subject.  When I wrote on node.js, the trolls who disagreed with me also called me a retard.  I didn’t realize that Shire Silver was such a big ripoff.  I did a brief comparison once, and concluded APMEX fractional silver was better.

Shire Silver is another scam like the Liberty Dollar, charging people ridiculous premiums compared to generic silver rounds. They are exploiting people who want to use gold and silver as money, and charging ridiculous markups.  If someone wanted to pay me in Shire Silver, I’d only give them credit for the melt value and not the ridiculous premium.

8 Responses to Shire Silver Is A Scam!

  1. Wow, you got a bunch wrong.

    First, the exchange rate does float. Watch the price for a while and it’ll be obvious. Duh. Maybe actually read about it on the MSRP page? http://shiresilver.com/msrp

    The markup on the 5 gram card is the same as on the half gram card because that’s required for it to be a workable currency. I used to make them different, with the 5 gram being at a lower premium than the 1 gram, but people complained. Besides, making the 5 gram cards is way more work – trying to place the strips of silver nicely is a pain. But then you wouldn’t know until you tried it, and that takes work; something you probably don’t understand.

    As far as the premium being too high, how much do you complain when you order a salad? After all, most salads are priced higher than the spot price of lettuce. Even then, if you compare equivalent products Shire Silver does well. Heck, they’re selling a one gram silver bar for $9 ( http://www.apmex.com/Product/60730/1_Gram_Rose_Silver_Bar_999_Fine.aspx ) so how does that not deserve being labeled a scammer?

    And just because you might not see the benefit in laminating the metal into thin cards that fit well into wallets doesn’t mean that other people don’t. Merely not accepting the value does not make something a scam. Is a Ferrari a scam just because I think the price is too high for me?

    Shire Silver is NOT intended to be used for investing. We’ve made that clear. If you want to buy a bunch of metal to sit in a safe then go buy something else. But the kind of silver you’d stick in a safe for eventual redemption is not appropriate for everyday trade, and pretty much no one is going to use that on an ongoing basis. That’s where Shire Silver shines. You can have some with you all the time without it being a pain in the ass. Comparing a half gram card’s markup to that of an ounce bar doesn’t make sense. They’re different markets. Its like comparing a car’s value for travelling to visit the relatives on the other side of the country to that of a bicycle used for a short business commute.

    “1/10 of an ounce is small enough to make change for most transactions. APMEX fractional silver is intended for use as barter money.” – that made me laugh. You pointed out that 1/10th ounce is almost $5, which is no where near small enough to be change for an everyday transaction. Besides, no one is going to haul those around all the time. Seriously, just think about the ramifications of trying to use rounds. Do you think people will return to using pouches or coinpurses tied to their belts?

    And just so your other two readers know, we never would have found out about this backwater on the web if it wasn’t for Google Alerts. It scans the web, doing a search for specified terms, letting watchers know about instances of the term. I thought about not responding since almost no one is going to read your post anyway, but the Internet remembers and people can search. There’s more I could write, but if anyone cares they can check for themselves and I’ve spent enough time on this as it is.

    • Interesting silvershire website is no longer active, needs to renew with godaddy.
      sounds like a shady company, only playing into peoples fears and ignorance. In my opinion… silver will only be used for barter in isolated instances. we will always have a fiat currency, less a mass population decrease. via ww3, famine, or disease. Otherwise it is simply a hedge against the endless money printing going on worldwide.
      Consider this. Today if I went into any retail store and tried to pay in silver they would turn me away. However, today at this very minute I could use my silver to trade for goods with individuals. Neighbors, friends ect… anyone who knows what the current value of silver is.
      Conclusion… Silver is only a hedge against a shrinking dollar. It has real value but lacks liquidity. Recommendation… Trade any dollar you don’t need to spend into silver(as close to spot price as you can find). Also Keep dollars on hand because in the event of an economic collapse, Credit and debit cards will be the first thing to stop working. Retailers won’t accept silver in the early stages cash only! Then they will just close there doors because of the uncertainty and wait untill the new system emerges. During this time ur silver will be worthless, people will only want to trade for tangable goods they are no longer able to get at the market, food, medicine, ect… Dollars will also be worthless. This is where silver has the edge, as the new system emerges silver will have retained its value, along with all other comodities (gas, food, oil, ect…) and you will be able to trade your silver for the new FIAT currecy, as the dollar will no-longer exist. Basically you need to diversify! Most in Silver/Gold, keep some dollars for the transitional period (or natural disasters, where power outages occur) Oh! and don’t forget to stalk up on food and clean water. Guns and Ammo should have been a forgon conclusion.

      • c la:

        The best place for long-term savings is in physical silver/gold/platinum. Platinum is impossible to counterfeit, compared to gold and silver. Another advantage of metal is portability. If you need to leave in a hurry, you can take your savings with you.

        In a potential SHTF scenario, you should keep some small-denomination silver, in case you need it as barter money.

        If you keep your long-term savings in physical metal, you limit your loss to theft via inflation. It’s too inconvenient to live without any State paper money at all.

        Ron Helwig:

        I can tell by your hostile tone that this is an important subject and I am right. Shire Silver is essentially the same scam as the Liberty Dollar, charging ridiculous premiums to spot silver.

        The Liberty Dollar changed its “official price” when the melt value came close to the face amount. When silver reached $8/oz, the Liberty Dollar moved from $10/oz to $20/oz. When silver reached $16/oz, the Liberty Dollar would have moved to $50/oz. Shire Silver does periodically change the “official price”, but always leave a huge premium.

        To be most honest, the exchange rate between silver and State paper money should float daily. With Shire Silver and the Liberty Dollar, the exchange rate does not float daily, because the premium is ridiculously high.

        Let’s review the actual cost of the 1 gram card. I’ll stick with the numbers in the original post, where spot silver is $34.55/oz and the 1 gram “Shire Silver” card costs $2. There are 31.1 grams per troy ounce. The silver content costs $1.11.

        If you buy silver wire in bulk, you pay a premium of only 5%-10% to spot silver. For example, this source seems to sell silver wire for an 11% premium to spot. You can do better if you shop around. If you know someone with the right tools, you can make your own silver wire.

        So, the silver wire costs $1.22 per $2 card.

        You can buy laminating machine blanks for $20 per thousand. So, the laminating machine blank costs $0.02 per $2 card. The paper insert also costs less than $0.02 per card. If you include the depreciation of your lamination machine, printer, and equipment, the total laminating cost is less than $0.08 per card.

        So, the actual cost is $1.30 per $2 1-gram card.

        The remaining cost is labor, $0.70 per $2 card. If you have a good setup, you should be able to make 30+ card per hour. That’s an effective salary of $21 per hour. That’s a pretty nice salary.

        The 5 ounce cards are an even bigger bargain for you. The silver cost is the same percentage, $6.10 per $10 card.

        The cost of lamination is the same, $0.08 per $10 card. The raw materials are $6.18 per 5-gram card.

        Your labor is $3.82 per $10 5-gram card. If you can make 30 per hour, your salary is $114 per hour!

        That’s a pretty sweet deal. If you can trick people into buying your overpriced Shire Silver cards, that’s a really nice salary. My estimate of 30 card per hour is conservative. I bet you can make more than that per hour, unless you’re as stupid as your customers.

        When I estimate the actual costs of your Shire Silver card, you’re obviously ripping off your customers.

        Also, the 5-gram card should not be 5x the price of the 1-gram card, especially when the card has such a huge labor cost. If the “labor cost” of the card is 0.5 grams of silver, then the “5-gram” card should have only 3 grams of silver. Then five 1-gram cards would have the same value as one 5-gram card.

        APEX fractional silver has the same defect. Five 1/10 oz silver rounds are worth more than one 1/2 oz round.

        I considered the possibility of using copper rounds for change. I could not find any reasonably-priced copper rounds.

        Regarding the other points in your trolling comment.

        It is invalid to compare the 1 gram Shire Silver to the 1 gram trinkets on APMEX. Those are intended as collectible/numismatic, and not for use as bullion or barter money.

        The salad analogy is invalid. A better analogy is one store sells a salad for $2 and another store sells the same salad for $3. The salads are identical (portion size, quality, store location, etc.). Obviously, the $2 salad is a better deal. Every business, including APMEX, charges more than the cost of raw materials. My complaint is that Shire Silver is ridiculously overpriced compared to the cost of raw materials and labor.

        If the store owner prices his goods in terms of silver, prices in multiples of 0.1 ounce, then silver as barter money should work. You can always use State money for change.

        The best fractional silver/gold system is E-Gold and E-Silver. That was ruined by State violence, and not because it’s a bad idea. Ideally, you should be able to get a bank account denominated in gold and silver, then use it as easily as writing a check or a debit card.

        When the Internet first became popular, some E-Gold businesses started. The laws were changed to make such a business illegal and unprofitable. The biggest risk of E-Gold is that your metal will be stolen by criminals wearing badges and uniforms. There is the risk of theft by ordinary criminals. There is the risk of theft by the bank, via fraud or fractional reserves.

        I don’t understand why you’re insulting my reader volume. My website has an Alexa rank of 850k (300k in the USA). Shire Silver has an Alexa rank of 2.8M. Freekeene.com has an Alexa Rank of 1.3M (250k in the USA). I have a much better Alexa rank than your website, and a comparable Alexa rank to freekeene.com. The Alexa Rank probably underestimates my true readership, because my regular readers probably won’t install the Alexa spying toolbar.

        According to Piwik, I have ~150 regular readers. According to my raw Apache logs, I have ~500 regular readers, but I don’t filter out bots from the raw Apache log script.

        If laminated silver wire really is the wave of the future, there will be competitors who undercut you on price.

        I stand by my original analysis. Shire Silver is priced at a ridiculous markup compared to the raw materials and labor. You are hostile to my post, because I pointed out your scam. Just like Bernard von Nothaus, you are exploiting people who want to use an alternate currency, but are too stupid to analyze things. Shire Silver is inferior to APMEX fractional silver, for people who want to use silver as barter money. When I buy something, I typically spend $10 or more, so APMEX fractional silver would suffice. If necessary, change can be made with State money.

  2. Here’s another interesting bit on Shire Silver. They will buy back their cards for 75% of the sale price.

    Compare that with APMEX. They will buy back for 89-90% of the sale price (if you buy 1 1oz silver round) or 95%+ (if you buy 500 1oz silver rounds). So, silver rounds have a better bid/ask spread than Shire Silver. Even if you add in shipping costs, APMEX is still a better deal. Plus, you can sell your silver rounds to other people than APMEX, but I don’t know of any other offers to trade Shire Silver cards for State money.

    • Hello FSK,

      I enjoy your website, and agree with you almost 100% philosophically.

      I’ve researched Shire Silver and other alternative currencies, and I don’t think you should accuse Shire of being a scam. At least not without at least talking to them on the phone or email.

      “Scam” indicates “fraud”, and Shire is not misrepresenting anything. At worst, they can be accused of being over-priced, but they’re not hiding that. Their website explains all the costs in detail, and they even list their providers so you can see how much their raw materials cost. He has a specific reason for charging such a high premium. They are not using silver as an investment, but rather to cater to the growing number of people who what to replace FRNs with another currency now.

      I know you are busy, but since you have accused someone else in the liberty movement of being a fraud, I think you should at least take some time to look at the following web page which deals with face values of currency: http://opencurrency.com/the-standard/face-value/

      The value of 1 Ounce of silver is not the spot price. Spot is a manipulated market price. When the spot fell from almost 50 to 20, it’s not because silver became inherently less valuable in a month. And it’s not because a bunch of new silver was mined. It’s because buyers stopped paying more that 20 for it. One of the main determiners of the value of 1oz is whatever people agree to pay for it. If a majority of buyers start paying $100 per ounce, then silver is worth $100 per ounce.

      In order for silver rounds to work as a currency, the community of merchants and consumers have to agree on a face value that is MUCH higher than the spot price in order to overcome Gresham’s Law.

      Merchants who accept silver payments based on spot are not really using silver as an alternative currency…. they’re just exchanging them for FRNs.

      I belive we need a currency “backed by silver”, which is *not* the same as using silver as a currency.

      Complicated stuff, which I don’t understand entirely.

      Anyway, thanks for all the great articles.

      Best wishes,

      Michael

  3. I know this site is dead, but I thought I would add my two cents.

    If the goal of Shire Silver is for it to be used as a local currency then it is very different than silver bullion. Sliver bullion can be taken to any coin dealer anywhere in the country and redeemed for the price of silver, minus a fee. This is not true of a local currency. If the goal is to keep the currency circulated in the area it doesn’t matter if there is sliver in it or if it’s paper. As long as it’s difficult to counterfeit and is usable, the markup is irrelevant. Putting silver in it just makes sure there is SOME internal value to the currency and makes it expensive to counterfeit.

    You are right, if someone is buying it for the silver they are idiots. But if they are buying it to spend it locally so the money stays local then it’s not overpriced at all.

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