Forget Gold and Silver: Collect Nickles?

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earthwise's picture
earthwise
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Forget Gold and Silver: Collect Nickles?

 

I've heard/read other places that nickles are now worth more for their base metal content  than what is reflected in their face value. James Wesley Rawles writes here that inflation will exagerate this disparity and therefore hoarding nickles might be financially worhtwhile. 

Anybody thought of or considering this?

 

 

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JuanGalt
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Yes, it's been discussed here before...

Search under nickels, copper, copper or nickel investing, etc... It does make a good deal of sense.

Hedge Fund Manager Kyle Bass also talks about this allot. He bought $1M worth himself and tells the story in Michael Lewis' book  BOOMERANG.

Just as has happened to the rest of the coinage, it is highly probable the US gov't will change the metallic content in nickels (less copper)sooner rather than later as copper becomes more expensive. Dr. Stephen Leeb also makes a great case for copper's growing scarcity. I recommend Dr. Leeb's book RED ALERT for more on that subject as well.

Both of these gentleman have several podcast and You Tube interviews you can check out for free or simply visit your local library or bookstore and peruse stheir thoughts.

Hope that helps.

JG

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earthwise
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Sorry for the rerun

 

 Ooops! My mistake.

I thought that this topic was most likely previously discussed, but when I searched 'nickles' on this site I got nuthin'. It woulda helped if I had spelled it correctly: 'nickels'. Doh!!!

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AWR
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Stranded value

 The problem with hoarding nickels and pennies due to their metal content value exceeding their face value is that it is now illegal to melt them down:

http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm

This is what I find so baffling about Kyle Bass's big nickel purchases.  Jim Rogers was recently asked about this in an interview (can't remember which one off the top of my head) and he couldn't figure out why someone would hoard nickels either since it's not legal to melt them down.

In other words, the difference between the metal content and the face value of the coin is "stranded value".

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JuanGalt
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Good point, I was unaware of that...

I'm assuming someone like Kyle Bass has some contingency for that (which he may not state in public). There is also the power of trade and barter based on people's perception or acceptance of value for the coinage. In the future one may accept payment for something and ascribe more value to a real nickel than it's nominal 5 cent value (which will be further eaten away by inflation over time). It's very likely that the metallic value of coinage will exceed that of paper or "fiat value" for certain US bills sometime in the not too distant future. Look at what happened to      pre-1964 US silver dimes, quarters, half dollars and dollars. They are now worth multiples of the face value.

There's also the fair question, at what point after the gov't continues to enact hundress or thousands of laws that much of the public disagrees with (for example the Patriot Act, NDAA, SOPA, PIPA, mandatory vaccinations, natural food and supplement bans and restrictions, gun restriction, etc...) do people just begin to just say "FU" to the gov't and ignore certain laws.

IMO, the laws of the land must have the clear consent of the majority of the people. Just because a corrupt and criminal congress enacts a law it does not make it right, just or representing the will of the people.

As the gov't tyranny and corruption grows more people will fight back once pushed to the edge. Only the uneducated, naive, indifferent and easily corrupted will blindly follow the gov't mandates down the rabbit hole. Unfortunately, that still is ALLOT of people, likely a slight majority for now. I do think more and more people are waking up though.

Turn off the news and don't rely too much on mainstream press for your info. Do your own homework and thinking. Question things more, apply outside-the-box thinking and ask the question "WHY?" more often. Apply "Lateral Thinking" to your situation and problems. Prepare and learn to defend yourself in more ways than one. Good luck!

JG

RON PAUL 2012

DEFEND THE CONSTITUTION & LIBERTY

 

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Who is John Galt?

Very good post, particularly the last 4 paragraphs.  Hmmmm what actions should we take?  I think that a deliberate and systematic focus on locavore (local production of food and energy) as a committed group is something we  can do now to get away from the banksters and government mobsters....

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JuanGalt
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Thanks Mirv, right on brother...

I agree, developing independence and sustainbility as far as food and energy is a critical part of the solution. I know it can be a difficult but forming phyles or "like-minded commmunities" helps. It's very difficult to do all of this on your own.

Also, I highly encourage building home-based businesses that can operate worldwide via the web and as a back-up be able to provide products and services locally without over reliance on the web in case the web goes down or is censored.

Creating relationships with people that participate on boards like this, building consensus around mutually beneficial solutions and then creating exciting plans that inspires action and strategic execution is key.

Best of luck Mirv,

JG

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oh brother
JuanGalt wrote:

Hedge Fund Manager Kyle Bass also talks about this allot. He bought $1M worth himself and tells the story in Michael Lewis' book  BOOMERANG.

He bought a million dollars worth of nickels?  That's 114.8 tons!  Pray tell, where does he store this?

BTW, a friend of mine has a bridge in Brooklyn that he's willing to sell cheap for the scrap iron.

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Romans12.2
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AO I agree that nickels are a tad weighty...

However we buy $100 boxes of rolled nickels from our bank almost every week.
We have them on the floor of every closet in the house!
Most people would not even notice that they are there....
As to the question of whether we would ever be able to melt them down, i have to admit, that part bothered me when we first read James Wesley Rawles blog about buying nickels.

But just today, We bought another bag of 90% silver dimes and paid $2.00 each.....and you can't melt those either.
Just sayin.

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He stores it in some type of special vault of course...

Check out the first chapter of BOOMERANG for more on that story and the parts of RED ALERT for info about future copper scarcity.

By the way, Kyle Bass is one of the sharpest financial minds on the planet and has made hundreds of millions of dollars on bets and investments over the past few years. I would not discard him so easily. His track record speaks for itself.

He is about to make an obscene amount of money once Greece officially defaults on its debt. Something like 500-600 to 1 or better based on well-established bets going back a few years ago.

I think most astute investors would agree with most of his investment plays over the past few years and projections going forward.

He definitely qualifies as prepper (read about his ranch, PM holdings, guns & ammo purchases, etc...) and falls much more in line with Ron Paul's stances on the economy as oppsed to the rest of the phony Rep & DEM establishment clowns. 

I'd check it out before jumping to conclusions.

JG

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Sold!..........
ao wrote:

 

BTW, a friend of mine has a bridge in Brooklyn that he's willing to sell cheap for the scrap iron.

How much is he askin' for it? I like bridges!

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let's get real
JuanGalt wrote:

Check out the first chapter of BOOMERANG for more on that story and the parts of RED ALERT for info about future copper scarcity.

By the way, Kyle Bass is one of the sharpest financial minds on the planet and has made hundreds of millions of dollars on bets and investments over the past few years. I would not discard him so easily. His track record speaks for itself.

He is about to make an obscene amount of money once Greece officially defaults on its debt. Something like 500-600 to 1 or better based on well-established bets going back a few years ago.

I think most astute investors would agree with most of his investment plays over the past few years and projections going forward.

He definitely qualifies as prepper (read about his ranch, PM holdings, guns & ammo purchases, etc...) and falls much more in line with Ron Paul's stances on the economy as oppsed to the rest of the phony Rep & DEM establishment clowns. 

I'd check it out before jumping to conclusions.

JG

You've got to be kidding.  What do you think vault storage costs are for 114.8 TONS of nickel?

Don't believe everything you read.  What I'm saying is that someone is probably pulling your leg.  Both writers and Wall Street types are not averse to doing this.  I've seen other cases along this line.  They laugh at watching the suckers scurry to do what they mention in some article or book and they're doing nothing of the sort.  Or they want the masses to do something that will benefit them.  Read elsewhere on CM for a clue as to an example of that.  Hint: I've mentioned it previously a few times. 

Perhaps we should start warehousing cow manure because fertilizer will become rare and expensive and it's definitely practical.

Frankly, if you have the property, I think you'd be better off storing coal.  It will go up in price and you can always use it yourself and give some to family, friends, and neighbors.  Nickel?  Are you going to use it personally?  And if not, how are you going to move any sizeable quantity to market?  Rent a fleet of trucks?

And FWIW, we've got a massive nickel mine coming on line in our area.  The production will be astonishing.  There's not going to be any big nickel shortage in the near future.

 

 

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Start warehousing manure?

I store it all the time, about one year before i spread it around. the only piece of equipment i own i won't stand behind is my manure spreader.

robie,husband,father,farmer,optometrist

There must be alot of it stored in DC

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Nickels and Inflation/Deflation
robie robinson wrote:

There must be alot of it stored in DC

Thanks for that chuckle Robie, I always enjoy reading your posts...

Regarding the Nickels, I always thought this would be a great inflation/deflation trade because:

  • if inflation becomes a concern, the market should pay more for them than face value (like it does with silver dimes, etc), if it becomes too expensive for the government to use nickel in producing new coins.
  • but if deflation becomes a concern, then their face value has more purchasing power than when you bought them.

It's a win-win trade, if you can safely store all those nickels for free. Personally though, I haven't done it because it sounds like a pain in the gluteus maximus.

Best....Jeff

 

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robie robinson wrote: I
robie robinson wrote:

I store it all the time, about one year before i spread it around. the only piece of equipment i own i won't stand behind is my manure spreader.

robie,husband,father,farmer,optometrist

There must be alot of it stored in DC

There you go.  How about if we emptied out the Whitehouse and Capital and stored the stuff there.  Surely, it'd be of more value to the populace than the present occupants.

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Holy S..t!

These days I am looking for hot horse manure, to use as hot-bedding material in my cold frames. Never thought of driving my pickup truck down to DC and just shoveling the stuff they keep piling up in the Capitol. Not a bad idea at all, guys -- they do seem to have an endless supply there. 

Ipek

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Save your nickels

 This is a timely article for this thread.  Some good thoughts and worth a read:

http://lewrockwell.com/orig10/rawles10.1.html

 

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Well, not exactly AO...

The nickels are stored on pallets. Bass owns a property that is quite secure and well over a thousand acres in size. Additionally, his firm stores tons of precious metalsfor clients as well as own personal holdings. Not too hard to add some space for nickels. The guy is worth hundreds of millions of dollars at least and has managed billions of dollars the past few years. 

You may be partially right about your 2nd point. That does happen.

Coal can cetainly be a good suggestion for storing.

US nickels are being collected not for their "nickel" content, it's the COPPER that is valuable. Your point there is way off.

Do some research on future copper availability and industrial uses and demands.

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ao
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Juan Galt, I'm a bit familiar with the subject
JuanGalt wrote:

The nickels are stored on pallets. Bass owns a property that is quite secure and well over a thousand acres in size. Additionally, his firm stores tons of precious metalsfor clients as well as own personal holdings. Not too hard to add some space for nickels. The guy is worth hundreds of millions of dollars at least and has managed billions of dollars the past few years. 

You may be partially right about your 2nd point. That does happen.

Coal can cetainly be a good suggestion for storing.

US nickels are being collected not for their "nickel" content, it's the COPPER that is valuable. Your point there is way off.

Do some research on future copper availability and industrial uses and demands.

Yes, I'm familiar with Bass and quite familiar with copper.  In addition to having been an investor in and out of copper and copper producers for decades, I was also an employee of Phelps Dodge for a short time (and if you know anything about copper, you know about Phelps Dodge) and live in one of the richest copper mining areas of the country.  In fact, the largest piece of float copper ever found was found here ... essentially a 40 TON nugget of essentially pure (more than 99% fine) copper.  I was mistaken about the nickel hoarding for nickel but the same mine I mentioned will also be producing copper.  In addition, there are a multitude of copper mines that have been shuttered as well as potential mining sites, all of which will be brought online again when the price rises sufficiently.  And the situation here isn't much different from the multiple other copper mining regions of the world either.  Regarding research, have you ever toured or worked in a copper mine, whether underground or open pit?  Or visited a refinery or a production facility.  It's a little different doing on-the-ground onsite research versus getting second hand information reading about something on the Internet or a few books.  And personal contacts are second hand information as well.  I've done quite a bit of reading and research on copper and most other base and precious metals and I promise you, you'll learn things from first hand experience that you'll never acquire with book learning.  I'd suggest getting out in the field and doing some additional research.

Regarding the whole nickel investment thing, I just think it's a bit of foolishness and self-deception but if it gives folks solace as to their security, who am I to argue.  It seems like neither Erik T nor myself have been particularly successful in talking people out of such things as PSLV and I doubt if I'll be successful in talking people out of hoarding nickels either.  Plus, I have a hard time imagining that Bass would bother with such small time silliness but YMMV.  He's got better things to do with his time and money.

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AO, not saying nickels (copper investing) is the end all be all

but it can be a legitimate part (small portion) of someone's investment portfolio. It's only a small part of Bass' investment portfolio. $1M is really not allot of money for him.

I would prioritize quite a few things ahead of copper and so does Bass. Productive land, access to fresh water, gold, silver, alternative energy, food stores, guns & ammo, general security, reliable utilitarian equipment and vehicles and likely quite a few other things would come before nickels and copper.

Your points on your last point are well taken. I agree with that.

JG

ao's picture
ao
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no, it's a hoax
JuanGalt wrote:

but it can be a legitimate part (small portion) of someone's investment portfolio. It's only a small part of Bass' investment portfolio. $1M is really not allot of money for him.

I would prioritize quite a few things ahead of copper and so does Bass. Productive land, access to fresh water, gold, silver, alternative energy, food stores, guns & ammo, general security, reliable utilitarian equipment and vehicles and likely quite a few other things would come before nickels and copper.

Your points on your last point are well taken. I agree with that.

JG

You're not getting my point.  If he wanted to invest in copper, I can't envision him buying nickels which have to be melted down and then refined (costing time, effort, money, energy, transportation and handling costs, and equipment) to get pure copper.  If he wanted copper, he'd just buy copper.  And if I wanted to hoard copper, I'd buy 220 lb. billets and stack them and paint them like fake lolly columns in my basement.  Do folks here just think they're going to melt nickel in a pot in the backyard and have it conveyed by magic carpet to a refiner who's going to buy it at spot price?  I have all the things you mention above and significantly more and still, still, I wouldn't for a second consider investing in nickels.  Someone's funning with folks and having a laugh at their expense.  IT'S A HOAX!

For Pete's sake, next they'll be having people buy navel lint for fire starter because it's rare, natural, and highly combustible. 

 

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robie robinson
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its too

early,just finished milking the cow whose manure i was convinced to warehouse, to consider the hoarding of dingleberries. AO, you're too much getting folks fired up about foolishness.   robie :-)

TD's picture
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coins in a hyperinflation environment

This stie says it better than I can... the advantages of having a few coins stacked...

http://valuesystem.livejournal.com/50672.html

Our currency, here in the US.. used to be backed by gold. The change we carried in our pockets were made of silver, copper, and nickel. Our paper money is now just paper, and all our coins are worth just a fraction of their stated value due to being made out of clad materials. Only the nickel survives and it is will likely be replaced with steel in the next year or two.

I saved silver coins from the days when I could get them at face value. They are now worth multiples of that. Copper pennies sell on eBay for 2 cents a  piece. Three years from now nickels will do the same, that is, if we don't have hyperinflation.

Nickels are a bullion form of nickel and copper Just like Eagles are to gold and silver. Unquestionable authenticity, priced less than spot, accepted as currency anywhere, and in a worst case hyperinflationary event a potential windfall. So why not stack a few?

TD

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