Friday, March 11, 2011

Should You Hoard Nickels?

As precious metals like silver, gold, and platinum continue to increase in price as the US Fiat Money Paper Dollar is overprinted into financial oblivion, base metals are attracting some side glances as well. In particular copper pre-1982 pennies and nickel coins (75% copper & 25% nickel). Indeed, due to the rise in the commodity price of both copper and nickel, lists the metallic value of the current US nickel at close to $0.07 cents! If it wasn't for a pesky law passed in December of 2006 forbidding the exportation and / or melting of US nickels, enterprising speculators might be lighting up the cauldrons already for profit!

However, given the assumption that most US citizens who've chosen to start hoarding nickels are lawful people, what could possibly be their motive for stacking the 5-cent pieces in their garages, sheds, basements etc? Well, it can't be for ease of storage and portability (always great in survival situations). For example: $20,000 worth of gold coins could be easily carried by your 85 year old grandmother in her purse. $20,000 worth of American Silver Eagles weighs 40 pounds, and can be carried by an average man some distance. However, $20,000 worth of nickels (face value) weigh 4,410 pounds, and isn't going anywhere without a forklift and a light truck or heavy duty pickup! As far as ease of storage gold and silver win hands down as well. My wife hardly even notices my hiding spots for my gold and silver coins. On the other hand, how is any married man (who presumably wishes to stay that way) going to schmooze his significant other into letting him store a mere 400,000 nickels or $20,000 worth around the house! I suppose you could form the nickel bricks into coffee tables and other furniture, but I just can't see my wife sitting down quietly while a truck is backing up to the house to unload the massive cargo.

I don't want people to get me wrong. I am very sympathetic to any person whose goal is to diversify out of the US(less) Dollar into more valuable commodities. I imagine the typical nickel hoarder may have missed the gold and /or silver trains, and is hoping to catch the more modest nickel and copper rockets before takeoff. However, I just see the logistics mentioned above to be major stumbling blocks to realizing an eventual profit from hoarding nickels, to say nothing of the thorn in the nickel-guys paw that is the US Law also detailed above.

Finally, I'd like to offer my advice. Forgo the nickels with the numerous logistical and legal roadblocks, and buy American Silver Eagles and Junk Silver (pre-1965 dimes, quarters, halves) on every dip in silver prices. Silver is headed to $50 and beyond. You may have missed the first quarter of the game, but there is still another three to go with a nice half-time show in the middle (NO CHRISTINA AGUILERA I PROMISE - I LOVE AMERICA TOO MUCH)!

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies (below):




  1. Exactly. After seeing this about nickle hoarding in several blogs, my friend and I were discussing this point. Why would people hoard nickles when the price of silver is relatively low? As you pointed out nickles would be a major pain to store and transport. Thanks for reaffirming our conclusions.

    1. I should take advice from someone that cannot even spell the word right?

    2. nick·el (nkl)
      1. Symbol Ni A silvery, hard, ductile, ferromagnetic metallic element used in alloys, in corrosion-resistant surfaces and batteries, and for electroplating. Atomic number 28; atomic weight 58.69; melting point 1,453°C; boiling point 2,732°C; specific gravity 8.902; valence 0, 1, 2, 3. See Table at element.
      2. A U.S. coin worth five cents, made of a nickel and copper alloy.
      3. Slang A nickel bag.
      tr.v. nick·eled or nick·elled, nick·el·ing or nick·el·ling, nick·els
      To coat with nickel.

    3. I paid less than $6/oz for my silvery last run. $30 is hardly 'relatively low' for someone like me.

      Nickles are heavy, but if you have the space a $100 in nickles worth more than $100 in the Chase' computer banks or a piece of paper in the wallet.

      I can buy a nickle for 5 cents and next year it'll be worth a nickle.
      Ive never lost money in the metals market but I can say that as a long term investor that right now you couldnt pay me to buy silver or gold.
      Both are at very high prices from a decade ago and as the economy recovers are pretty much guaranteed to go DOWN in price, not up, as the dollar gets stronger and it doesnt take as many to buy gold or silver.

      Once the economy recovers (if it does with this spend happy administration) it could be a very long time before another economical collapse that sends metal prices soaring.

      Frankly, we who invest in metals long term are betting against the economy if we're honest with ourselves.
      In the short term its just a supply and demand thing, but if we're buying up metals and its not to make money here and there then we are probably trying to be prepared for the worst case scenario.

  2. In the case of a currency collapse, I can see the pre-1982 pennies and all nickels becoming the currency that is used to barter lower cost items. More expensive items will require silver and gold. It may be a good idea to switch US dollars for Canadian dollars during the US dollar peaks (if we ever see them being equal or better).

  3. Well if we see hyperinflation, and then the fed starts cutting zeros off the ends of bank accounts, stockpile of coins doesn't sound too bad! And nickels still are the winning choice over say a quarter in that situation, because if we get that deep in shit and then collapse, I highly doubt there will be much enforcement of melting coin laws.

  4. Melting copper nickel alloys (like US nickels) require a very high temperature, much higher than gold or silver. Higher temperatures mean high fuel costs, raising the possibility of a break-even or even net loss melting scenario. Companies that actually melt copper nickel alloys are rare, and high tech electric induction furnances are required.

    Secondly, I never advise anyone to break any US law.


  5. I only meant that if our government collapses, its trivial laws designed to protect itself will no longer be in effect.

    So "If" it becomes legal to melt your nickels, a hand crank forge only requires enough fuel to feed me to keep it going. That would easily reach the 1170-1240 degrees C Cu-Ni alloys melt at.

    Of course gold and silver are the first choice, but roughly $170 in nickels fits into an ammo box and is a nice, 0 risk investment diversification.

  6. Prices have to go way up to be worth while. My dad told me people said the same thing about silver in the 60s. "Silver! Its only worth $3 an ounce!". Hahaha, well now who's laughing at 35 an ounce. The idea is not to carry around 40 lbs of copper, its to carry 2 lbs worth $25 (eventually).

  7. Lots of haters out there. If someone's got the space, and they're going to keep a few thousand dollars on hand, what's the difference between paper money and coins, particularly nickels? Well, the difference is that nickels have a slight possibility of increasing in value. Paper money can only lose value. I don't think anybody "hoarding" nickels is saying it's a better investment than gold, silver, or land. It's just got more potential than the green cotton/linen crap folded in everybody's wallet. And as long as paper money is still around you'll be able to trade in your nickels at the bank for a few bills you can easily spend at Walmart on some Chinese electronics.

  8. The silver-gold-nickel discussion is completely missing the point. RIGHT NOW a nickel (0.05 piece) is worth about 0.06 to 0.07. This means you get a 20-40% immediate return for hoarding nickels. This is the equivilant of being able to buy Gold around $1400 TODAY.

    If we go through a period of hyper inflation (like the 1970s) the nickel coins will be STILL worth a minimum $0.05 currency value, but worth potentially much more in metal content. Meanwhile, Gold's current price is much higher than inflation expected returns.

  9. I'm aware the theoretical value of a nickel is higher than its face value. But what of it? I can sell my silver or gold very easily in a thousand different venues from refineries to eBay. Nickels just don't have any profitable available channels where an easy sale can be made. In addition, due to the weight/value ratio of these heavy coins that extra penny or two will have to be spent on shipping costs alone.

    I just don't see the value here.

    Thanks for your comment!


  10. eh...I bought silver at around $5-7 an oz a few years back...I think I'll wait until its not in the $30 range before i buy anymore.
    I wouldnt touch gold or silver right now for what I have to invest. Buying at some of the highest spot prices in my life time just seems to be risky given that if the economy survives Obama its very likely that gold and silver prices will recede. I bought gold at around $300 an oz. Not even interested at the current prices. A few good years for the economy and im looking at losses that might never be recovered in my lifetime.

    The nickles are bulky and heavy for sure, but if you have a place for them theyre fun to go thru and save.
    Theyre also US coins which means they are worth wat I paid for them even if the spot prices drop significantly.

    If you have a place to store them I dont think you can lose with nickles for smaller investment amounts.

  11. "Nickels just don't have any profitable available channels where an easy sale can be made"

    Actually that wont be true in a very short while if Obama gets his way and we start minting new nickles in stainless steel.
    There will easily be a premium for copper/nickle nickles on sites like ebay just like there have been for pre 82 pennies.