News Melt Value of Silver Mexican Coin

Melt Value of Silver Mexican Coin

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The melt value of silver Mexican coins is incomparable. You can’t even imagine that a single coin, with the weight of 12 grams, contains 0.72 or 72 percent of pure silver. However, there was a bill in Mexico’s Lower Congress that would alter their legal currency. The old peso coin will now be replaced with the new Libertad Ounce which only constitutes 31.1 grams of pure silver.

Mexican Peso Coin

It is the world’s 12th most traded currency, usually in Latin America and relatively to other Americas. This was widely recognized as the legal currency in 1920 to 1945 prior to the 1993 currency revaluation. Originally, it was named after the Mexican pesos oro or pesos plata, which means and silver weight respectively. Thereby literally, peso means weight. It is basically divided in to 100 centavos. Mexican peso is also labeled as the Spanish dollar. There was a time in history where Mexican peso equaled the US dollars in 1785. In fact, both of these currencies were basing on the silver weight present in every coin produced.

History of Mexican Peso Coin

It was Emperor Maximilian of the famous Second Mexican Empire, who minted the first peso coin which is legend by the term peso in 1863 with valuation of 1 centavo. Although the 8 reales were still patronized by the New Mexican Republic, there were relatively increasing number of peso coin with centavo denomination. In the 1867 to 1869, the first peso coin which contains silver was first produced. The obverse feature of the coin includes an eagle and the famous Republica Mexicana. The reverse carried the symbol of a scale, for larger coins, and denomination, for the smaller ones. This has long been the great historical heritage of the Maximilian Empire throughout Mexico and even to the world as a whole.

However, in the 20th century, there was hyperinflation in Mexico which resulted into the institution of the Nuevo peso, or the new peso. President Carlos Salinas de Gortari in 1993, who revaluated the peso coin from 1000 centavos to 1 peso coin. There was a period of adjustments, especially to address the issue of old currency removal within 3 years time. Banco de Mexico produced new set of money bills, also under the Nuevo peso, with new graphics in order to appease the meddling confusion between the old peso and the new peso. It was almost identical to the old currency; it’s just that the word peso was replaced with Nuevo. The denominations were 5, 10, 15, 20 and 50 centavos. There was also 1, 2, 5, 10, 20 and 50 Nuevo peso. Specifically, only the 10, 20 and 50 peso were made out of silver and bronze rings.

So you can really see how Mexicans value their currency so much. They don’t take it lightly. Economically speaking, your currency is the most powerful player in your economy. Most likely, your purchasing power is based solely on the power of your currency. It is not just limited within domestic economy because even in the global arena of economics, your currency will define the track of one’s economy, whether it’s fairing high or low depending on your currency valuation. Sometimes, currency devaluation occurs due to poor economic achievements and low economic growth.

Determination of Melt Value

Due to the controversy of silver-packed peso coin, it is therefore imperative for us to be informed about the determination of silver Mexican coin. Basically, when we speak of melt value, we refer to it as the total amount of silver molts present in the coin. It largely depends on the metal composition such as silver content, price of the silver, coin weight and even the conversion rate. Metal composition is the rate of metal content in proportion with other elements present in one coin. The price of silver is expressed in troy ounces. To determine the total melt value of a coin, the silver price is converted into grams using a conversion factor of 0.0321507466. Meaning to say, they use the formula of:

Melt Value = Silver Price x Conversion Factor x Metal Composition (% is converted in decimal)

X Total Coin Weight (in grams).

When dealers sell Mexican peso coin, the economic values is always determined by its melt value. This is basically why it’s always good to raise the melt value of your coin as much as possible.

Recent Development: Libertad Ounce

There was a bill passed in the Lower House of Mexican Congress which states that the monetary value of the coin should always be at least 15% higher than its silver content. This is comparable to that of .720 old peso coins, but it bears the value of 510 peso given the present value of silver in the market. Logically, the citizen would not choose to spend 510 just for the purchasing of coin. They might as well save that silver coin and use it only when they really needed it the most. Given this, the melt value of a certain coin should always be lesser than that of its practical monetary value to avoid any currency dilemma in the future.

Summary

The trend is that there is a shift of investment from capital-based businesses into investments on melt value. Since melt value of Mexican peso coin is increasing, many people are attracted to do business out of this situation. This interest is rooted from the price of silver in the market nowadays. The market value of silver these past few years are sky rocketing its way through the money industry. Since Mexican peso coin is rare with its pure silver content, it makes it worthy for investments. In fact, its American and Canadian counterpart is way below it.

In the long run, the new Libertad Ounce will serve the country for more generations to come, if it will be the country’s permanent coin. Its monetary value will adjust to the increase of silver price provided that it is quoted by the Banco de Mexico.

Melt Value of Silver Mexican Coin
General Contributor
Janice is a writer from Chicago, IL. She created the "simple living as told by me" newsletter with more than 12,000 subscribers about Living Better and is a founder of Seekyt.

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