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.
Robert Wenzel: Back at the commodity level, copper is the latest to hit a record at $8,966 a ton... 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].:') Thanks blam. What we need in the White House is another FDR, who'd call in all the nickels.
Yup. The one we have just accumulates idiots.
To say I'm displeased with this posting is putting it lightly.
I think you've missed the whole point of the article.
They are mostly made of zinc
Is this article saying to buy current-issue nickels or silver nickels from the pre-junk coin era?
silver nickels???
Only problem is it is a federal crime to melt nickles.
Barney Miller — “The Child Stealers” — Season 6, Episode 15 — Thursday January 24, 1980 — “A self-proclaimed time traveler tells Harris to fine tune his stock portfolio”
http://www.tv.com/barney-miller/the-child-stealers/episode/4197/summary.html
The time traveler told Harris that a huge future precious metals strike destroyed their market value, and the entire world switched to a zinc standard, so Harris calls his broker and springs for a couple of tons. :’)
The ones made after 1981 are. The earlier onesa re copper.
ping
Nickels were never silver, always nickel. Hence, larger than the silver dime for half the value (a less valuable metal.)
goldbug ping.
Ok, I’ve worked the math out based on the latest spot prices for copper and nickel and the US Mint’s formulation for nickels at 25% nickel and 75% copper. I cleaned out my change drawer and weighed 35 nickels on a kitchen scale. The results:
35 nickels weighed 6.1 oz or 0.0109 lb
Scrap Copper at $4.5666 per lb
Scrap nickel at $12.7896 per lb
$4.5666 * 0.0109 * 75% = 3.73 cents copper
$12.7896 * 0.0109 * 25% = 3.49 cents nickel
= about 7.2 cents total per coin
Not in Canada, Mexico, Cayman Islands, Bahamas, etc. etc. (?)
BFL
Not totally true. 'Wartime nickles' minted 42-45 are 35% silver.
Ping for the poor man’s investing. :)
During 1942-1945, the US had silver nickles.
From mid-1942 to 1945, so-called Wartime composition nickels were created. These coins are 56% copper, 35% silver and 9% manganese.
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