Saturday, May 14, 2011

Latest from Doug Casey and Discussion of small coins

You may find this article from Doug Casey on The Daily Reckoning interesting:

Here is an excerpt:

"In the days when gold and silver were money, “saving” was actually identical with “hoarding.” The only difference was the connotation of the words. Today you can’t even hoard nickel and copper coins anymore because (unbeknownst to Boobus americanus) there’s very little of those metals left in either nickels or pennies – both of which will soon disappear from circulation anyway."

        The only problem with this statement is that it is incorrect when it comes to nickels. US five-cent coins are the same composition of 75% copper and 25% Nickel that they have always been, other than the "war nickels" made during World War 2 which contained 35% silver.  US nickels are perhaps the best form of fiat cash to hoard, since they are presently worth about 7 cents in metal value.  
          As for one cent coins - "pennies"- (technically the US Mint has never called a coin a "penny" - it is left-over language from the British coins), ones minted prior to 1982 are 95% copper and worth almosty 3 times their face value.  Some 1982s are copper as well, but some are zinc, it was the cross-over year.  If you search currently circulating pennies, you will generally find that about 20-25% of them are pre-82 coppers.  It is very prudent to set these aside and save them.  Even though it is currently illegal to melt them, nothing lasts forever.  And even with the melt ban, pre-82 pennies sell on E-bay and at a multiple of roughly 1.5x of their face value.  More to come on tips regarding base metal coinage.

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