The Franco Pakillo: 15.2g of Silver Worth More Than the Coin
A Franco 100 peseta coin contains 15.2g of silver worth 6.26 euros, yet dealers pay only 4. Why the Spanish market undervalues this metal.
English · Original discussion in Spanish · Published
The pakillo contains 15.2 grams of silver and sells far below its intrinsic value
A 100-peseta Franco coin weighs 19 grams with a purity of 800 parts per thousand, containing 15.2 grams of fine silver. At current international prices, this metal is worth 6.26 euros, yet professional dealers in Spain pay no more than 4 euros. The contradiction is stark: silver is cheaper than silver, yet few want it.
This phenomenon stems from a captive market with disproportionate margins and poor liquidity.
Why the pakillo is worth less than its silver
The calculation is straightforward. The pakillo, bearing the effigy of the former head of state, contains 15.2 grams of fine silver. Internationally, this amount is worth 6.26 euros. However, numismatic dealers buy at a maximum of 4 euros and sell for 5 or 6. This spread, exceeding 30%, is the toll for operating in a segment with little real competition.
The underlying reason is illiquidity. Selling pakillos at metal prices requires taking them to a refinery, which only accepts large lots: at least 1,000 coins. For an individual with a few dozen in a drawer, this door is closed. The alternative is the local dealer, who sets the terms. The result is a market where the seller always loses, and the buyer only wins if they hold the metal for years.
Some argue the issue is the effigy. The coin antiestéticatures Franco’s face, which is an emotional burden for many. Others say the rejection is practical: no one wants an asset they cannot convert to cash without being ripped off. In both cases, the result is the same: the coin stays in the drawer.
The market controlled by four dealers
The structure of the Spanish numismatic business explains much of this phenomenon. There is no deep wholesale market, no international platforms quoting these coins, and no arbitrageurs buying cheap here to sell abroad. Four dealers control the market and set a spread unthinkable in other countries. In the international bullion market, however, coins are often bought above metal value. The difference is not the silver: it is the ecosystem.
Comparisons with other investment products are revealing. A legal tender silver coin like the American Eagle or Chinese Panda has global buyers and easy liquidity. The pakillo, by contrast, is only interesting within Spain, and within Spain only to a small network of non-competing dealers. The result is an asset with the metal of a coin but the liquidity of a stamp.
The complete calculation, broken down line by line, reveals a difference that surprises first-time viewers. It is not just the buy-sell spread: it is the opportunity cost of having money stuck in an asset that does not appreciate at the rate of metal.
The patient buyer’s strategy
Despite all this, some buy pakillos. The logic is simple: if the metal is worth 6.26 euros and the coin is available for 5, there is a theoretical 25% margin. The problem is that this margin only materializes if you find a buyer willing to pay the metal price, which currently does not happen. Regular buyers accumulate coins hoping the market changes, or as a hedge against an extreme scenario where barter returns.
This last motivation appears repeatedly in conversations. The idea of a soft collapse, a prolonged crisis, or a return to primitive payment forms turns the pakillo into a cheap form of insurance. It is not a conventional investment thesis, but a bet on survival. Those who buy at 5 euros do not expect to sell at 7: they expect that one day these coins will be worth more as metal than as money.
The advice repeated by the most experienced is always the same: before buying, ask who you will sell it to. If the answer is a local dealer, the price will be low. If the answer is a refinery, the volume must be huge. And if the answer is no one, then it is not an investment: it is a collection.
The alternative that actually works
In contrast to the pakillo, the market offers silver coins with international liquidity. Morgan and Peace dollars, Chinese Pandas, or Alfonso XII duros with 900 purity have buyers worldwide and trade with reasonable spreads. The difference is not the metal—all contain silver—but the ease of converting them to cash without losing a third of their value.
The conclusion drawn from all this is uncomfortable for the Spanish enthusiast. The pakillo is likely the cheapest silver on the market. But cheap does not miccionan profitable. An asset that can only be sold at a loss is not an investment: it is a trap in the shape of a coin. And as long as the market remains in the hands of a few, the trap will continue to work.
Key Data
A 100-peseta Franco coin weighs 19 grams with a purity of 800 parts per thousand, containing 15.2 grams of fine silver. At current international prices, this metal is worth 6.26 euros, yet professional dealers in Spain pay no more than 4 euros. The contradiction is stark: silver is cheaper than silver, yet few want it.
This phenomenon stems from a captive market with disproportionate margins and poor liquidity.
Why the pakillo is worth less than its silver
The calculation is straightforward. The pakillo, bearing the effigy of the former head of state, contains 15.2 grams of fine silver. Internationally, this amount is worth 6.26 euros. However, numismatic dealers buy at a maximum of 4 euros and sell for 5 or 6. This spread, exceeding 30%, is the toll for operating in a segment with little real competition.
The underlying reason is illiquidity. Selling pakillos at metal prices requires taking them to a refinery, which only accepts large lots: at least 1,000 coins. For an individual with a few dozen in a drawer, this door is closed. The alternative is the local dealer, who sets the terms. The result is a market where the seller always loses, and the buyer only wins if they hold the metal for years.
Some argue the issue is the effigy. The coin antiestéticatures Franco’s face, which is an emotional burden for many. Others say the rejection is practical: no one wants an asset they cannot convert to cash without being ripped off. In both cases, the result is the same: the coin stays in the drawer.
The market controlled by four dealers
The structure of the Spanish numismatic business explains much of this phenomenon. There is no deep wholesale market, no international platforms quoting these coins, and no arbitrageurs buying cheap here to sell abroad. Four dealers control the market and set a spread unthinkable in other countries. In the international bullion market, however, coins are often bought above metal value. The difference is not the silver: it is the ecosystem.
Comparisons with other investment products are revealing. A legal tender silver coin like the American Eagle or Chinese Panda has global buyers and easy liquidity. The pakillo, by contrast, is only interesting within Spain, and within Spain only to a small network of non-competing dealers. The result is an asset with the metal of a coin but the liquidity of a stamp.
The complete calculation, broken down line by line, reveals a difference that surprises first-time viewers. It is not just the buy-sell spread: it is the opportunity cost of having money stuck in an asset that does not appreciate at the rate of metal.
The patient buyer’s strategy
Despite all this, some buy pakillos. The logic is simple: if the metal is worth 6.26 euros and the coin is available for 5, there is a theoretical 25% margin. The problem is that this margin only materializes if you find a buyer willing to pay the metal price, which currently does not happen. Regular buyers accumulate coins hoping the market changes, or as a hedge against an extreme scenario where barter returns.
This last motivation appears repeatedly in conversations. The idea of a soft collapse, a prolonged crisis, or a return to primitive payment forms turns the pakillo into a cheap form of insurance. It is not a conventional investment thesis, but a bet on survival. Those who buy at 5 euros do not expect to sell at 7: they expect that one day these coins will be worth more as metal than as money.
The advice repeated by the most experienced is always the same: before buying, ask who you will sell it to. If the answer is a local dealer, the price will be low. If the answer is a refinery, the volume must be huge. And if the answer is no one, then it is not an investment: it is a collection.
The alternative that actually works
In contrast to the pakillo, the market offers silver coins with international liquidity. Morgan and Peace dollars, Chinese Pandas, or Alfonso XII duros with 900 purity have buyers worldwide and trade with reasonable spreads. The difference is not the metal—all contain silver—but the ease of converting them to cash without losing a third of their value.
The conclusion drawn from all this is uncomfortable for the Spanish enthusiast. The pakillo is likely the cheapest silver on the market. But cheap does not miccionan profitable. An asset that can only be sold at a loss is not an investment: it is a trap in the shape of a coin. And as long as the market remains in the hands of a few, the trap will continue to work.
Key Data
- Pakillo weight: 19 grams
- Purity: 800 parts per thousand
- Fine silver: 15.2 grams
- Ounce price: 12.82 euros
- Kilo price: 412 euros
- Metal value in one pakillo: 6.26 euros
- Dealer buy price: max 4 euros
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (132 replies).
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