Hi, Jim,.
I don't remember this topic being brought up, so I'll ask
about it. According to www.coinflation.com, the current melt value
of a pre-1982 [U.S.] penny (95% copper) is $.02, twice its face value.
The melt value of a [U.S.] nickel (75% copper, 25% nickel) is $.09,
nearly twice
its face value.
Melt value is, of course, dependent upon the metals markets, which
fluctuate daily. While most metal prices have increased dramatically
over the last few years, there's no guarantee they'll continue to rise
(and prices might even fall), but at this point the long-term trend
seems upward. With this in mind, do you see any point in stashing away
the nickels and pre-1982 pennies that find their way into our pockets/purses
from day to day? Several cans or jars of them wouldn't take up much
storage space. Let me throw out a few (hopefully cogent) thoughts,
then perhaps you can address them.
Copper is obviously a useful industrial metal, as might be the copper-nickel
alloy found in nickels
(http://en.wikipedia.org/wiki/Cupronickel). I'm not suggesting melting
these coins down, since it wouldn't be worth the effort unless you
had a lot of them--and it's illegal besides! But in a post-SHTF or
TEOTWAWKI economy, do you think they might retain enough value to be
useful for very small transactions instead of (or as a complement to),
say, junk
silver coins? They're small, nicely packaged, instantly recognizable,
difficult to counterfeit, and contain (small) amounts of useful metals.
Perhaps most important, right now they are very easy to obtain in fairly
large quantities and are inexpensive relative to their metal value.
What
are your thoughts? Great blog, by the way.
Thanks, - RB
JWR Replies: You are correct that pre-1982 pennies are 95% copper. (The later ones are zinc tokens that are just flashed with copper.) It has been said that "silver is the poor man's gold." So I suppose that by the same token (pardon the pun) copper is the starving man's silver. However, per dollar value, pennies are extremely heavy and bulky. I guess that it wouldn't hurt to have a few rolls of pre-1982 pennies on hand to make "change" for junk silver barter transactions. But from a practical standpoint, at current copper prices it is hardly worth your time to sort out the pre-1982 pennies. But it is not much trouble to save all of the nickels from you pocket change, or to ask the bank teller for a couple of rolls of nickels each time that you do a banking transaction. I've previously mentioned that there is apocryphal story about a church minister living in Germany in the 1920s--during the Weimar Republic hyperinflation. During the mass inflation, he saved all of the copper pfennigs from the donation plate. He eventually filled a disused bathtub with them. When the D-Mark paper money was finally totally repudiated (used for kindling), he and his family were able to eat and had extra for charity, due to his foresight. I think that it would take similarly traumatic times before pre-1982 pennies ever become an "investment."
OBTW, in the interim since I first wrote about this topic in SurvivalBlog (back in late 2005), the U.S. government has made it illegal to melt pennies, nickels, and dimes for scrap. But there is no law against saving them. And I suppose nickels could be beaten into hunting broadheads in a multi-generational TEOTWAWKI collapse. Isn't that a cheery thought?
