Mr. Rawles,
I had a moment of inspiration today and after looking up melt value of Canadian coins on Coinflation and giving thought to your article about storing U.S. nickels. I decided to try an experiment sorting Canadian coins, specifically nickels and pennies.
Note that these melt values are when Copper spot price is listed at $3.246/lbs – a two year low in October 2011. Personally, with the currency printing going around world wide, I think it’s reasonable to assume these prices are going to skyrocket in the near future.
I went to a Canadian bank and bought several roles of nickels and pennies with the intent of using a magnet to filter out fully debased steel coins from the coins with high nickel and copper content.
First off – all Canadian nickels are magnetic and the experiment does not work with them.
However with pennies, I’ve found that using a magnet and several pieces of Tupperware, from one 50 cent roll I can filter out around one third of the full-debased steel Canadian pennies dating after 2000 whose melt value is insignificant.
One third of the pennies that remain are dated after penny debasement occured from 1997 onwards when the mint introduced copper-washed zinc pennies. Mixed in as well are a few 1982 and later American pennies. The approximate melt value of either being $0.004 to $0.005 per penny.
Approximately one third of the remaining pennies are American or Canadian pennies whose melt value fluctuates from $0.0177 to $0.023. These are either pre-1982 American pennies or pre-1997 Canadian pennies.
Given the ability to filter out a substantial amount of the steel pennies with a magnet (that can be rerolled and deposited at a bank), would you please offer your opinion on if you think sorting and storing Canadian pennies is a viable means to store up copper as an inflation hedge, in a similiar way to storing American nickels for thier nickel [and copper] content?
I will also note that there is serious talk in the Canadian government to fully abolish the penny so the opportunity for doing so may not be around for very long.
Thank you, – Ni in Canada
JWR Replies: That does make some sense, although keep in mind that with pennies the weight and bulk per dollar invested will be substantially higher than with nickels. And I can assure you that even nickels are very heavy and bulky! But if you have time on your hands and lots of vault space, then go for it.