Letter Re: Copper Price Galloping

Monday, Apr 17, 2006

Dear Mr. Rawles,
I have wanted to write to you for a week or two with respect to an oddity.  An increasing number of sources are discussing the degree to which the base metal in the US penny is becoming more valuable than the penny itself.  This is odd, and www.coinflation.comis tracking it with alleged numerical precision.  If I get some spare time this week, I hope to write about the death of the penny in more detail. Best Regards, - K.A.D.

JWR Replies: Silver is about 45 times more bulky than gold, (As I'm writing this, gold is $605.10 per ounce, whereas silver is $13.28 per ounce.) Even still, I prefer investing in silver. It is bulky, but stilll marginally portable. However, in general, I cannot recommend investing in physical copper! It is far too bulky. As a base metal, copper is far too heavy and bulky to be practical as a tangible investment. Just $2,000 worth would be too heavy to carry in a car. Perhaps if you are a retiree that lives at your retreat year-round, and if you have no intention of moving for the rest of our retired life. For anyone else, I cannot recommend investing base metals. Since only pre-1982 U.S. pennies are all copper (the later ones are merely copper-flashed zinc tokens) unless copper skyrockets, it is hardly worth your time to sort pennies. (But you might get lucky and find a cache of prte-1982 penny rolls.)


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