Jim:
We’ve previously discussed in SurvivalBlog that coins are usually untouched by a nation during remonetization, meaning a significant recovery in purchase value after such event.
What is the likelihood the US would keep the dollar coins in circulation, given their low regard by most consumers? This would mean the coins would avoid remonetization, be worth a “new” dollar each, offering a significant advantage.
The Fed’s only real options would seem to be to attempt to collect them all, or issue notices of their reduction in value/expiration as legal tender. Neither sounds like something they’d want to do. – Michael Z. Williamson (SurvivalBlog Editor at Large)
JWR Replies: Typically nations leave old coinage in circulation at face value, when they issue new paper currency. (Typically, coincident with knocking off one or more zeroes.) It is too expensive and a logistic nightmare to pull coinage from circulation, and immediately mint new coins. In 10/ or 100/1 swaps, anyone then holding lots coinage wins.
As an aside, I’m sure you recall in the late 1960s when the British coinage was converted to a decimal system, four decades ago (doing away with the “sixpence”). They left the old coins in circulation for a few years, and they asked everyone to play “let’s pretend.” (Where a sixpence coin was treated as a “2 ½ pence piece”. Those still circulated legally until around 1980, as I recall.)
I like nickels best, because they are a hedge for both creeping inflation (they presently have a base metal value of $0.0696) and they will be worth the equivalent of 50 cents each if there is a 10/1 currency swap, or $5 each if there is a 100/1 currency swap. The Sacagawea (and similar) dollar coins are only good for the latter. (Since their base metal value is presently only $0.0754.)
So, logically, if you have the vault space, nickels (with a metallic value of 139% of their face value) makes more sense to stockpile than debased dollar coins (with a metallic value of only 7.5% of their face value.)
I suppose that the ultimate pessimist would store pre-1982 pennies (95% copper), since they could be used to make bullet jackets. 😉