Hi Jim,
Just a friendly reminder that the melt value of U.S. nickel [five cent piece]s are inching up in price again. Their metallic content made them worth 6.5 cents, the last time I checked. The impostor to the presidency recently signed the “Coin Adulteration, Debasement, and Value Theft Act of 2010” also known as “The Coin Modernization, Oversight, and Continuity Act of 2010“. This may be driving up the price of the currently circulating real nickels. Regards, – Randy F.
JWR Replies: SurvivalBlog readers should consider the newly-enacted legislation their “last call” to acquire nickels by the roll or by the banker’s box of rolls, at face value. Once a new debased (presumably stainless steel) “nickel” is issued, you will have to laboriously sort coins. Yes, I’m sure magnetic discrimination sorting machines will quickly become available, but for now, there is no labor required whatsoever. So stock up. Once the value of a genuine nickel hits two times its face value, Gresham’s Law dictates that they will quickly be driven out of circulation. The same thing happened when American 90% silver coins were replaced by silver-flashed copper tokens, in 1965.
I can’t provide you plans to build a time machine to take you back to 1964–to stock up on silver coins at face value–but I can clue you in about nickels. History is about to repeat itself. Take my advice, and stock up. In a few years, you will be very glad that you did.
I predict that ten years from now, or perhaps even sooner, pre-2011 nickels will be traded in $100 face value bags.
At present, it is illegal to melt or export U.S. pennies or nickels, but that is likely to change, once inflation drives them out of circulation.
As I’ve previously noted in SurvivalBlog, inflation of the US dollar has been chronic, cumulative, and insidious. So much so that turns of phrase from old movies like “penny candy” and “its your nickel” (to describe the cost of a call on a pay phone) now seem quaint and outdated. When inflation goes on long enough, the number of digits required to express a price grows too large. (As has been seen with the Italian lira, the Zimbabwean dollar, and countless other currencies. One whitewash solution to chronic inflation that several other nations have chosen is dropping one, two, or even three zeros from their currency, in an overnight revaluation, with a mandatory paper currency exchange. The history of the past century has shown that when doing so, most governments re-issue only new paper currency, but leave the old coinage in circulation, at the same face value. This is because the sheer logistics of a coinage swap would be daunting. Typically, this leaves the holders of coinage as the unexpected beneficiaries of a 10X, 100X or even 1,000X gain of the purchasing power of their coins. Governments just assume that most citizens just have a couple of pocketfuls of coins at any given time. So if a currency swap were to happen while you are sitting on a big pile of nickels, then you would make a handsome profit. To “cash in”, you could merely spend your saved nickels in the new currency regime. Imagine a nickel buying a gallon of gas once again.