Mark McHugh

The Nickel – Change We Can Believe In

In Open Thread on Tuesday, September 14, 2010 at 2:18 pm

Recycle everything you can, I always say.  Obviously, he’s not using it anymore.

Yeah I know, gold is hitting new record highs today, but everybody’s talking about that.  Besides, after a rather impressive string of correct calls on gold, I got a huge move wrong and have been living in a self-imposed exile from all discussions related to short-term movements of the yellow metal since.  My macro view was clearly stated here, and that remains unchanged.  I’ve got other news – cooler news.

Nickels are worth 5.7 cents today according to Coinflation.comShhh….that’s 115% of face value.

That’s right, for a limited time only, you can take a Federal Reserve note and get 20 stylish coins depicting Thomas Jefferson, truly one of the greatest Americans (that’s a $1.15 melt value!).  And when I say this is a limited time offer, I mean it.  The Nickel is sure to be reformulated with cheaper metals (like every other coin in use today) or eliminated altogether in the very near future,  I guarantee it.  It’s the last sliver of hard money in a fiat world.  Get ‘em while you can.

Fun facts -  One dollar’s worth of the 90% Silver US coins, discontinued in 1965, are currently worth $14.76 (that’s a 1376% gain!).  The S & P 500 has returned 1204% since January 1, 1965 (excluding dividends).

The other reason I mention this today is this whole inflation vs. deflation debate.  It doesn’t matter when you’re talking nickels,  because nickels are both currency and commodity (75% copper, 25% nickel).  So if the inflationists (or hyperinflationists) are right the melt value will go up.  If the deflationists win, just lug them back to the bank and get paper dollars.  This is truly win-win.

Caveats and warnings – Nickels are heavy as hell, so it’s not really practical to hold large amounts of money in the Jeffersonian form.  And don’t get any ideals about melting them down and selling them as scrap – that’s illegal.  I should also point out that nickels are not at an all-time high, they’ve been over 7 cents before.  Be warned: Everyone at the bank treats you like a total crackpot when you demand nickels (God I love that feeling!).

It is poetic that the coin bearing Jefferson’s likeness is the last surviving US coin with a significant melt value.  The primary author of the Declaration of Independence is a timeless spokesman.  These words, written in 1815, could just have easily been written last week:

The treasury, lacking confidence in the country, delivered itself bound hand and foot to bold and bankrupt adventurers and bankers pretending to have money, whom it could have crushed at any moment…These jugglers were at the feet of government. For it was not, any confidence in their frothy bubbles, but the lack of all other money, which induced…people to take their paper

~ Thomas Jefferson, October 1815 letter to (former) Treasury Secretary, Albert Gallatin

That quote and many other thought-proving things were brought to my attention in this video recommended by my blogosphere friend who goes by the name S. Gompers.  It runs two hours but I think just about anyone would get some fresh persective from it.

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  1. Great post mark, as a lifelong coin collector I have enjoyed the “nuances” of the metal markets for many years. Don’t forget pre 1982 pennies either, they are the real metal to face value deal of modern currencies, LOL.

    http://www.coinflation.com/

    Glad you enjoyed the Oz video, and here is another thought provoking tidbit.

  2. Hey Mark, nice place to hang my Stetson Stage Hat. Great site. Do lifers get free pop-corn with that beer….?

    Did you get that answer yeat…..? Tex “OuT” !

  3. No answers yet, thanks for stopping by!

  4. Well EW got the job so I dought they will have time for you now. They will be very busy hidding all the info she’ll be looking for.

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