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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 03/23/2008 : 13:22:51
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CQC McDuck
Registered User Join Date: Feb 2008
Posts: 83
Why holding nickels make sense in hyperinflation AND/OR hyperdeflation
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I've come to the conclusion that holding a decent stash of nickels is a worthwhile (and cheap!) way to prepare ones self for both a hyperinflation or a hyper-deflation scenario. This strategy/opinion was formed after reading this article from survivalblog.com that someone recently posted here on GIM.
Hyperinflation:
As the above article highlights, nickels are currently worth about a cent more than their face value. Thus in a hyper-inflationary situation it is totally reasonable to expect the government reissue clad coins as a cost cutting measure and for the current nickels to raise in value because of their metal content.
Someone holding $1000 in nickels would be better off than someone holding the equivalent in FRNs as the fore would always maintain an intrinsic value (nickel) and could potentially increase in value relative to inflated FRNs. ATM $1000 in FRNs converted to nickels is worth about $1350 in nickel content.
Hyper-deflation:
I've read numerous arguments on GIM about "cash being king" in a hyper-deflationary situation. While there may be some validity to that statement the fact remains that most here (me included) would think twice before stocking a safe with a couple of grand in "cash." That being said, I'm sure that most here would agree that spending silver and gold in the initial stages of such situation would also be suboptimal at best.
The best solution? Hold a couple of grand in nickels instead.
If cash is scarce, most people won't care what form it's in. Need food, but the grocery store only accepts "cash?" Grab several rolls of nickels and buy bread. Need money to make small purchases at the packed, shady, cash-only black market? 40 low profile, easily recognized, USD denominated transactions per roll. Get mugged going to either? Having $2 in nickels stolen is better than having $20 in silver or $200 in gold stolen. Moreover, the thugs would be less likely to follow you home.
Conclusion:
Anyway those are my thoughts about why I believe nickels are basically awesome and badass in a hyperinflationary and/or hyper-deflationary SHTF situation. I'm not saying that someone should ONLY hold nickels, but I believe that nickels certainly have significant "strategic value" in this game of financial musical chairs that we're all playing ATM.
Nickels also seem to be a viable way to 'park' paycheck money in our current pre-SHTF situation as it keeps it out of the banks but in a form that won't go to zero but is still liquid enough to be converted back to FRNs in contemporary crisis fairly quickly. It's also encourages thrift because most people will feel odd spending $2 rolled coin and are too lazy to go to the bank to get it converted back into FRNs for everyday frill purchases.
It should also be mentioned that I'm writing this after staying up late to watch the Formula 1 Malaysian GP and I'm currently suffering from insomnia, so sorry in advance if this post comes across as somewhat crazy! It made perfect sense when I thought of it at 4 a.m.!
Comments, opinions, and criticisms are welcome.
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Think positive. |
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knibloe
1000+ Penny Miser Member
USA
1066 Posts |
Posted - 03/23/2008 : 20:56:42
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| I agree with you 100%. We all should have some cash on hand for emergencies. FRN's will depreciate over time, but nickels won't. They will always be worth their face value, and maybe more. If I had reserve cash in FRN's I might be tempted to spend them. However, I would feel odd spending a large number of nickles on something I don't realy need (and my wife certainly wouldn't). However, if I had no other money and needed to buy groceries, I wouldn't hesitate to break out a box of change and head to the store. |
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wheeler_dealer
Penny Collector Member
USA
402 Posts |
Posted - 03/24/2008 : 00:01:13
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Ardent Listener,
It seems like a good idea. By putting your available weekly savings into nickels you could actually win this way Yes the money is always there and I agree you would probably be more inclined not to spend it frivolously for things if you had to haul nickels every time. If you ever needed to liquidate I'm sure some bank would probably be glad to have you as a source for them. |
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CoinHunter53562
1000+ Penny Miser Member
USA
1805 Posts |
Posted - 03/25/2008 : 21:28:52
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| I was thinking about this today. I think more people do pennies because they look at the percentage gain (1 cent face value, coin has a melt value giving it a value of almost 250% over face) compared to nickels. However, if you look at the gain per coin, pennies yield 1.5 cents per coin, nickels 1.8 cents per coin (this would be if you sold each coin at spot price). Even though the percentage gain is less, the gain per coin is slightly higher with nickels. And hasnt nickel at one point seen prices at $25/lb or more? In the last 5 years, I dont think copper has gone much higher than it is today, while nickel had that explosive peak last year, so it seems to me that the potential upside on nickels is huge. |
My hobby: collecting real money 1 copper cent or nickel at a time.
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fiatboy
Administrator
912 Posts |
 Posted - 03/26/2008 : 00:52:53
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| Yep. I think it's a good idea to have a brick or two of nickels "just in case." The icing on the cake: Sorting is optional. |
"Bart, it's not about how many stocks you have, it's about how much copper wire you can get out of the building." --- Homer Simpson |
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Crash
Penny Pincher Member
USA
155 Posts |
Posted - 03/26/2008 : 09:07:40
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| It doen't sound crazy to me at all. I think it's a great idea. That's why I hoard them. |
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Nickels: for hyperinflation or hypderdeflation
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