Posted on 02/06/2011 4:25:44 PM PST by blam
Why You Need to Own Nickels, Right Now
Robert Wenzel
Saturday, February 5, 2011
On November 11, 2010, I wrote in the EPJ Daily Alert:
Back at the commodity level, copper is the latest to hit a record at $8,966 a ton. Copper is certainly not a "goldbug" play and is simply an indicator of economic (inflationary) demand. At some point, nickels, which are mostly made of copper, will start to disappear from circulation.
There's right now 6.2 cents worth of metal in a nickel [Note the value is now up to 7.2 cents.-RW]. When I run into someone that does not have a strong background in investing, I now tell them to buy nickels. You need storage space and a strong back to move them around, but a $100 box of nickels (roughly the size of a very large brick) can be lifted without a problem. You can stack plenty of "bricks" on a hand truck.
What's great about this investment is that there is no downside. In the unlikely event that there is no inflation, you can just spend your nickels... again, this is a great conservative investment...I fully expect the coins will eventually climb in value to at least double their 5 cent price.
The government has made it illegal to melt them down, but you will never have to do anything close to that. When you need to liquidate, just sell them to a numismatic dealer.
Gresham's law (bad money drives good money out of circulation) will take over at some price point and the coins will simply disappear from circulation, just like the pre-1965 silver content dimes and quarters have, and trade at much higher prices.
Those silver dimes now have over $2.00 worth of silver in them, the quarters have roughly $5.27 worth of silver, and you will never find one in circulation. The current nickel has 7.28 cents worth of metal content (mostly copper) in it. At some point they will disappear from circulation.
Indeed, that may not be far off into the future, if the story starts to get around about nickels the way it seems to be.
Financial author Michael Lewis told a story about a huge nickel investor, this week on the television show, The Colbert Report. The must see video is here.
Note: You can track the metal value of nickels and other coins at Coinflation.com.
ping
Whenever I see one of FortNikitaBullion's videos, I just think to myself that maybe the future generation is not so bad after all.
At least there's one kid out there with a brain.
pennies?
BTTT.
I remembered reading this when talking with a friend.
How much are nickels worth now, with silver over 40 an oz?
TY!
.
Worthy Bump!
Sight can be tricky--I have seen a number of pre-82 pennies with good mint luster intact (piggy bank dumpings), and a lot of the newer cents which are downright ugly.
I have found, however, that when a copper cent bounces off the hardwood table it rings, and the zinc ones sound flat. Compare, and I think you'll find it works very well.
I can spot ‘em pretty quick...at least for the first 20 or so rolls..LOL. Then my eyes go glurky.
Yes, I agree, there are large numbers of 1980 pennies and some from the 70’s in unbelievable condition, for some reason. Mainly that one year, 1980. And yes, there are recent ones that look like corroded turds, just rotten.
I also notice that the 82’s and earlier have a significantly better strike. I usually pick out the clearly brown (good) ones that you can pick out almost immediately, then go back and just work off the depth of the strike on the date, without actually reading the date.
I just gather all the 1982s and weigh them later.
Nobody gonna get rich off this exercise, that’s a certainty.
The only blessing (for me) is that I have a super good coin counting machine, a Cummins Jetsort which I bought for no good reason except it was cheap, and it counts out the good and bad rolls pretty quickly.
It’s nice to live in an area where I can still take in a sack of pennies and they’ll count them for me. I weighed them first and the count was about right.
I believe I have heard that Allianz Bank or some other Euro-sounding bank has self-serve coin counters in their lobbies. CommerceBank?
I did a hell of a lot better, for a while, getting $1K worth of half dollars at the bank and searching them for silver. I would still recommened doing that at least a time or two if you are in a small town, if I am hearing you correctly. You may have to have the bank order them for you, which they will typically do at n/c & call you when they come in.
They can be searched VERY fast. First batch: 2 x 90%, 10 x 40%. Second batch: nada. Third batch: Nada!
Still. Even if you get only one stupid 40% half in 2000 coins:
In a $25 box of pennies you have 50 rolls * 50 coins = 2500 coins. If 10% are goodies, and that is right around my yield, you have (in crude terms) doubled the value of 250 pennies, meaning you made $5.
In 2000 halves, $1K worth, if you find one 40% half (really cruddy yield but sometimes you will get NONE) worth about $4.75 = $4.25 over face. Adjust that for 2500 coins and you’d have $5.31!
So IMHO, halves are a better bet. And if you get a pre-1964 one (abt $11.60 value) or even 2 measly 40% ones, the advantage devastates what you can expect from pennies. I don’t consider the “amount invested” to harvest your metals premium in the equation since it is theoretically never at risk (unless you get into a car crash on the way home or herniate yourself lifting stupid coins, LOL)
Make sure you are wearing your weight-belt when you go to lift $1K worth of halves. Or only do $500 at a time. Heavy!
I said,
“In a $25 box of pennies you have 50 rolls * 50 coins = 2500 coins. If 10% are goodies, and that is right around my yield, you have (in crude terms) doubled the value of 250 pennies, meaning you made $5.”
No, you made $2.50. Halves = much better.
The grandkids get a kick out of helping sort the "coppers" from the "zinkers", and their Lincoln Cent collections are coming along pretty well.
How would they know?
It is one of my students favorite chemistry experiments.
Old coins will still turn up in circulation, just by chance. My dad was a coin collector in his younger days, and had a huge collection of Indian-head pennies (1800s vintage) when he was a young adult. Some kid got into his house, took the coins and spent them at a candy store. Those coins would be worth a fortune now.
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