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n/a
deleted
478 Posts |
 Posted - 12/14/2006 : 20:55:17
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It's just a matter of time before they change the metal composition of US coins. Below is the link to Gibraltar Steel. They are a USA based company that makes all the steel used for the Canadian Mint. Stock Symbol is ROCK . Check the 5 year chart and decide for yourself if this is right for you. Canadian mint is one thing....if they get the US Mint contract that's a whole new ballgame. You decide. I don't own stock in this compnay but I live near where they operate and they are in the news often. For what it's worth.
You must be logged in to see this link.
Gibraltar was also recently selected as the primary supplier of processed steel by the Royal Canadian Mint, used in Canada’s
1- , 5- , 10- , 25- , and 50-cent pieces.
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Metalophile
Penny Collector Member
USA
320 Posts |
Posted - 12/14/2006 : 21:17:51
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I looked them up. Their past 12 months revenue(sales) were about $1.4 billion. Suppose, for the sake of arguement, that they win the contract for both US pennies and US nickels. Other denominations the Mint still makes a healthy seingorage, so they'll probably leave those alone. Now, the Mint would have to make perhaps 10 billion pennies and 3 billion nickels the first year of the change. Assume each penny is around 3 grams and each nickel is around 5 grams. That's 45 billion grams of steel. 1000 grams per kilogram, and that's 45 million kilos of steel, or around 100 million lbs of steel or 50,000 tons of steel. I'm not up on my steel prices, but assume *very* generously $1 per pound. That means a revenue boost for gibraltar of $0.1 billion, or about 7% growth, respectable, but not earth shaking.
Historically the US mint has been loathe to make steel coins (other than the 1943 penny) because of the havoc they could wreak on the vending machine industry. I'm not sure they would even go that route, but I don't know what other materials they could use which would approach the density of cupro-nickel and would be cheaper.
Personally I would like to see them retire the penny and nickel and introduce a cupro-nickel clad half dime. Most Americans would hate that, though because they would be so small, and would not be accepted by vending machines (at least not at first).
Metalophile |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 12/14/2006 : 21:39:22
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Most of the snacks and sodas I see in vending machines cost nearly a dollar anyway. All the vending machine operators would need to do is raise their prices to the nearest dime or quarter and there goes the last real demand for the nickel.
In Europe the one and five cent coins are copper plated steel, and I would guess they have vending machines in Europe. Maybe they have configured their machines to tell the difference from a Euro coin from a slug and such technology could be installed in vending machines in this country. |
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478 Posts |
Posted - 12/14/2006 : 21:44:17
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| The weight of the steel is secondary. We're talking government here. Grams of Steel are only a portion of the cost. Any Gov contract is a cash cow. Check the ROCK chart and compare it to the return you've gotten from your copper penny hoard. |
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n/a
deleted
478 Posts |
Posted - 12/14/2006 : 21:49:37
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| VENDING MACHINES: Do you know how a vending machine seperates Canadian (STEEL) coins from US (CuproNickle) coins? They use a MAGNET that pulls the STEEL coin out of the slot and sends it out as a reject. How do I know this?? I asked the vending machine guy at work when he was stocking the machine and he showed me. Technology will adapt to any US coin metal compostion change with ease. |
Edited by - n/a on 12/14/2006 21:50:59 |
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Metalophile
Penny Collector Member
USA
320 Posts |
Posted - 12/14/2006 : 22:38:36
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For some reason vending machine operators in the US seem unwilling to change. Many of the vending machines where I work still don't take the SBA's or the Sackies, and the SBA was introduced in 1979! I've tried talking to the guy who stocks the machines and writing to his parent company, but they just won't do it, and in many cases all they have to do is throw a switch in the machine if it was made after 1979!. I think the vending machine industry has a powerful lobby.
Actually, in my thinking, Pencilvanian is right, the vending machines don't necessarily have to be retooled to deal with half dimes. The only times a 5 cent piece is necessary to accept is in purchases of 5 cents or 15 cents, and I don't know of one machine which has items nearly as low as 15 cents. Even a pack of gum is 40 cents!
Metalophile |
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Canadian_Nickle
Penny Hoarding Member
Canada
938 Posts |
Posted - 12/14/2006 : 23:07:38
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On the plus side: the Royal Canadian Mint is awesome in magnitude and coins money for a good third of the civilized world, so there are a lot of other national coin markets this company could court easily with an RCM contract.
On the minus side: it's corporate paper, and what's more, it's corporate paper enumerated in FRN inflationPlus+ (tm) notes, and I swore off both those gambles in '99. |
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n/a
deleted
478 Posts |
Posted - 12/14/2006 : 23:22:48
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quote:
Originally posted by Metalophile
For some reason vending machine operators in the US seem unwilling to change. Many of the vending machines where I work still don't take the SBA's or the Sackies, and the SBA was introduced in 1979! I've tried talking to the guy who stocks the machines and writing to his parent company, but they just won't do it, and in many cases all they have to do is throw a switch in the machine if it was made after 1979!. I think the vending machine industry has a powerful lobby.
Actually, in my thinking, Pencilvanian is right, the vending machines don't necessarily have to be retooled to deal with half dimes. The only times a 5 cent piece is necessary to accept is in purchases of 5 cents or 15 cents, and I don't know of one machine which has items nearly as low as 15 cents. Even a pack of gum is 40 cents!
Metalophile
Where I live, almost all the vending macnines take the Golden Dollar ( the Saq D) and the change machine only gives these and SBA's in change.
Steel coins coming soon. Find a way to profit from them. Hoarding the penny is not the way. Take your "paper" profits and buy real metals like gold, platinum or maybe palladium. Silver is junk also but way better than the copper penny whcih is now illegal to export or smelt. |
Edited by - n/a on 12/14/2006 23:27:22 |
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Canadian_Nickle
Penny Hoarding Member
Canada
938 Posts |
Posted - 12/14/2006 : 23:48:23
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What are you, insane? How does the fact that it's "illegal" to melt these coins take away from their value?
This isn't about PROFIT, mate. It's about CONTROL. Control over one's share of the nation's dwindling mineral resources, as all the manufacturing industry is gone and so as soon as primary industry drys up (especially farming, when the next seven year drought hits), that's it, game over, you can't have an economy made entirely of tertiary industry, because eventually everyone will just be a telemarketer and a fast food employee and unable to make ends meet. |
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Metalophile
Penny Collector Member
USA
320 Posts |
Posted - 12/14/2006 : 23:53:02
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Besides, from what I read about ROCK, a good portion of their business is supplying steel parts to the automotive industry. Quite a bit of risk there should we enter a deep recession or depression!
Metalophile |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 12/15/2006 : 16:12:19
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Footnote:
While melting or export of pennies and nickels may be illegal, that doesn't mean you can't own them for their numismatic value.
At one time the government wanted to outlaw the hoarding of silver coins and tried to stop the melting of said silver, both actions failed.
While melting/exporting is illegal Now, will that be the case 5-10 years from now?
Obsolete coins tend to increase in value, collector wise if not metals wise. |
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just carl
Penny Hoarding Member
USA
601 Posts |
Posted - 12/15/2006 : 18:35:16
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It is only a matter of time when coinage all over the world will be a thing of the past. Even now credit/debit cards are taking over. AS intercountry monitary systems become more equalized, the Euro, present coinage will be omitted gradually. Even now here in the US gas stations, crocery stores, department stores would rather take credit cards than cash. There is even a credit card commercial running on how using cash holds things up. With an electronic system for currency you could go anywhere on Earth and never worry about the interchanging of the monitary system. It is only gum ball machines that is holding up the process.
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 12/15/2006 : 20:24:19
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Even with electronic money many holdouts, including myself, would prefer real cash over digital cash.
Reasons:
Privacy, Digital cash is the ultimate paper trail.
What happens if the computer systems crash or go down from a power failure? Have to live without buying food?
Don't have to worry if there is enough money or credits in my account to make a purchase.
Hidden fees for convenience of digital cash. I remember when an ATM DIDN'T charge you to take out your own money and credit cards DIDN'T nickel and dime you to death with hidden fees.
I am not so nieve as to believe that digital cash won't replace real cash, but that is one of the reasons I collect coins and silver, to use as an untraceable and undetectable means of exchange. |
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Canadian_Nickle
Penny Hoarding Member
Canada
938 Posts |
Posted - 12/15/2006 : 22:35:12
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| Credit/Debit cards ARE NOT faster than cash. Anyone who's been in line behind a person who is too dumb to really deserve a card but has one anyway already knows this. |
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 12/16/2006 : 10:15:33
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To any one who believes in the supremacy of digital currency...
I offer you an all-expense-paid round trip time machine ride to New Orleans, late September 2005, or New York City, August 2003, your choice. That should adjust your faithful dependancy in power grids.
And even when the system is working correctly, it's all fueled by plastic cards and electronic machines, which means electricity (and thus fossil fuels) is the bottom line. Do we really want our currency tied to the price of oil!?!
Maybe in 2046 there will be a website Byteflation.com that tracks the face value of digital money to the cost of fuel it takes to keep it in existence.
And on the front of privacy...
"Cash tells no tales and leaves no trails." ~ Pablo Escobar |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 12/16/2006 : 10:41:47
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quote:
Originally posted by Canadian_Nickle
What are you, insane? How does the fact that it's "illegal" to melt these coins take away from their value?
This isn't about PROFIT, mate. It's about CONTROL. Control over one's share of the nation's dwindling mineral resources, as all the manufacturing industry is gone and so as soon as primary industry drys up (especially farming, when the next seven year drought hits), that's it, game over, you can't have an economy made entirely of tertiary industry, because eventually everyone will just be a telemarketer and a fast food employee and unable to make ends meet.
Let's try to refrain form questioning each other's sanity. By society's standards we are all nuts.
As an old timer  I just want to remind everyone that all of this occured when the Mint went from 90% silver to clad coins in the 1960s. Next a coin shortage will take place unless the Mint pumps out steel pennies and nickels real quick. When they have enough of the new coins in circulation they will lift the melting ban on the others. This ban was just the first step in seeing the end of simi-precious metals in our coinage.
History repeats itself.
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If you can conceive it and believe it, you can achieve it. -Napoleon Hill |
Edited by - Ardent Listener on 12/16/2006 12:09:15 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 12/16/2006 : 14:24:05
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quote:
Originally posted by Ardent Listener
Let's try to refrain form questioning each other's sanity. By society's standards we are all nuts.
I'm fist to admit I'm an eeeediot!
But isn't it odd how the "nuts" end up well off financially while the average guy and the so called "genius" end up working for the nuts of the world?
Everybody thought
Edison
Jobs
Ford
Gates
was, well you know 
But who laughed all the way to the bank in the end? |
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 02/03/2007 : 19:08:46
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Is there any good reason why we can't use stainless steel for coins?
I got thinking about this, how some countries have turned to nickel plated steel. Steelcore coins are okay, but I have reservations about corrosion. If the outer layer gets damaged, the coin starts to rust and deteriorate like our zinc cents. This was why the Mint removed steel 1943 cents as fast as they could. (Canadians... is this a problem with your coinage? Do they rust if damaged?) If the coin were solidly made of a corrosion-resistant metal, it will last much longer. This is why silver and nickel have been historically popular for coinage. But stainless steel is corrosion resistant too.
Let's target the current US 5 cent piece, currently 75% copper and 25% nickel. If the Mint switched to 18/10 stainless steel, the coin would then be 18% chromium and 10% nickel. This is less than half the nickel currently. And the remaining 72% would be steel, far cheaper than copper.
If 18/10 stainless were adopted for all non-penny coins, gone would be the bimetallic layering. We'd have handsome durable homogenous metal coins that would last for decades, like the silver and bronze ones did. With no layering to damage, there's much less risk of corrosion eating away the coin rapidly. This would also help foster the US steel industry.
So, coinsmiths, have you worked with stainless before? Is there any good reason why 18/8 or 18/10 isn't used for coins yet?
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Penny Search Totals:
806 zincs (1982-2006) 77.6%
227 coppers (1959-1982) 21.8%
4 wheats (1940-1950) 0.4%
1 dime (2004) 0.1%
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tmaring
Penny Collector Member
USA
302 Posts |
Posted - 02/03/2007 : 20:09:07
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My initial reaction is "stainless is hard on dies!" but.... on second thought.... think about stainless flatware. Sure some of it is really cheap, just crimped sheet metal... but the good stuff is real die-struck 18-8 stainless, and very intricate with high-relief detail. Coins are far less relief and an easier shape to deal with. If you can do that with flatware, coins would be simple. Die life might be reduced relative to the softer metals, but not terribly. I have not tried stainless myself... I've been playing with titanium, niobium, hafnium, and tantalum... didn't really want to bother with stainless... but it might be worth playing with just to check it out.
Tom Maringer
Shire Post Mint
Springdale, Arkansas |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 02/03/2007 : 20:48:51
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Just the odd footnote:
The reason the US Mint ended the steel penny in 1943 was beacuse a newly minted 1943 penny looked like a shiny dime, giving Americans the opportunity to pay one cent for a ten cent item or subway ride. (Some Americans have always looked for a way to game the system)
The subway companies had to install magnets to keep riders from cheating them.
Steel coins have been minted for countries in South America, Africa and parts of Europe for many years, so the technology or quality dies needed to mint coins exists.
All that is needed now is the political will to switch over from copper or cupronickel to steel.
However, considering that the congress does not seem to care that the mint is losing money minting nickels and pennies, I doubt the switchover will take place any time soon, unless the melt value of a zinc penny is worth five cents and a nickel is worth a dime.
When that happens, expect a coin shortage (and expect to see lots of nickel and penny sellers on ebay.) |
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n/a
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479 Posts |
Posted - 02/03/2007 : 23:09:14
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If a nation retools and adjusts to the rising price of metal every 20 years or so, no problem, right?
What if that nation has to retool every 10 years? Probably okay, right?
Every 5 years?
Every year?
Every six months?
I wonder if the govMint is aware of something that we are not aware of?
Perhaps they know that this time around, things are accelerating.
Perhaps, they know that all of the fractional coins are soon to go into negative seigniorage?
You must be logged in to see this link.
Perhaps, the dime and qwarter are only months, and not decades behind the penny and nickel?
Perhaps the govMint has more perspective on this than we do.
I know I'm speculating, but hey, if inflation can get the penny and the nickel in rapid succession, cannot the dime and qwarter fall into the same trap?
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"Financially, the US economy has degenerated into a sort of cargo cult, where people feel that they can continue to attract recycled petrodollars by dancing around piles of internet servers with their cell phones and their laptops."
-Dmitry Orlov |
Edited by - n/a on 02/03/2007 23:15:29 |
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tmaring
Penny Collector Member
USA
302 Posts |
Posted - 02/04/2007 : 12:12:46
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If seignorage on the quarter and dime is about to go negative... then we should all go into high gear hoarding metal! I've been buying a $100 box of nickels at the bank about once every couple of weeks for a while now... and they're starting to look at me funny. I'm that wacky "nickel guy". Thing is... there's lots of banks in town, and I've stopped at all of them. Most don't even stock $100 worth of nickels in the whole place! Only one bank here actually has them. Does that say something?
Tom Maringer
Shire Post Mint
Springdale, Arkansas |
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n/a
deleted
479 Posts |
Posted - 02/04/2007 : 12:42:04
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I do not mean to imply that I know what the future brings.
Please do not make any decisions based on what I say.
I speculated above by saying, "Perhaps ..."
That caveat now stated, I do indeed think that the whole notion of seignoirage is at play within the mint.
They are not dummies, so they must be debating their next move(s) internally.
I can imagine two camps, I'll call one the plastic men, and the other the metal men.
Plastic man: We could just get rid of all coins and make people use plastic for all "legal tender" transactions.
Metal man: Or we could rebase, debase, freebase, and / or waste more money on negative seigniorage.
Plastic man: But people already accept plastic, except for a few kooks on the fringe.
Metal man: Hey, I have real metal in my basement , and so do you.
Plastic man: Well, the general public accepts plastic, even though you and I hold real money.
Metal man: I propose that we issue stainless steel coins across the board for everything that is a fraction of a dollar.
Plastic man: Why bother, the Amero is just around the corner, we can just lose on pennies and nickels while we gain on dimes and qwarters, and just hold on until the Amero without upsetting Joe-sixpack more than necessary. We don't want him listening to the kooks, do we?
...................
Well, obviously, I don't know if such a conversation ever takes place within the govMint, but some kind of conversation most definitely is taking place internally about how to handle the issue of seigniorage.
at coinflation.com
the melt value of the dime and qwarter are currently worth 18.72 % of face.
the melt value of the nickle is currently worth 140.64 % of face, and
the melt value of the penny is currently worth 78.37 % of face (the ones they are making NOW)
Since these numbers are very different, it seems like a stupid thing for me to say that they would think in terms of treating these different things as the same thing. I am not at all sure about my speculation, but here it is.
I speculate that the melt value of the dime and qwarter will NOT have to go negative before the mint changes them.
I further speculate that the melt value of all the fractional coins in aggregate or average doesn't have to go into negative seigniorage for the Mint to act. All that is necessary for the mint to act is for the price of metals to continue on an uptrend for a significant (ahistorical) period of time.
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"Financially, the US economy has degenerated into a sort of cargo cult, where people feel that they can continue to attract recycled petrodollars by dancing around piles of internet servers with their cell phones and their laptops."
-Dmitry Orlov |
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just carl
Penny Hoarding Member
USA
601 Posts |
Posted - 02/05/2007 : 16:56:54
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quote:
Originally posted by tmaring
If seignorage on the quarter and dime is about to go negative... then we should all go into high gear hoarding metal! I've been buying a $100 box of nickels at the bank about once every couple of weeks for a while now... and they're starting to look at me funny. I'm that wacky "nickel guy". Thing is... there's lots of banks in town, and I've stopped at all of them. Most don't even stock $100 worth of nickels in the whole place! Only one bank here actually has them. Does that say something?
Tom Maringer
Shire Post Mint
Springdale, Arkansas
Strange town. Here in the Chicago area you can get bags of anything you want. Usually you ahve to open an account though. I have accounts in about 20 different banks so I can get bags, boxes, rolls of anything in coins. I play a game with coins. Get a bag from one bank, look though them, take them back to a different bank. Good exercise.
As to using steel for coins. The 43 Steel Cent had to be Zinc coated to prevent rust. Not that they didn't have stainless steel back then, however, it was very expensive. Nowadays there are virtually hundreds of grades of Stainless Steel. Look it up. Some are not even magnetic. Some can NOT be magnetic due to where they are being used. For example in Nuclear Power stations. Bridges around here have been constantly upgraded using high quality Stainless Steel that can not be magnetic. Many people are fooled today with so many items stating Stainless Steel. This steel can be as low as about 1% Stainless and still be called stainless. So many items from China and Pakistan are termed Stainless Steel and begin to tarnish and stain rapidly and everyone goes nuts wondering why. If you want good grades of stainless, carry a magnet with you. If it doesn't stick, it is probably at leat 440 or higher. Look it up. Nowadays coins could be made of that but counterfeiting would run rampet due to the availability of the materials.
Carl |
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n/a
deleted
479 Posts |
Posted - 02/05/2007 : 20:49:06
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Good Info Carl, Thanks.
I should educate myself more about stainless, it is indeed interesting stuff.
I don't think it necessarily follows that if materials are available that then counterfeiting will run rampant.
There are several other branches on the decision tree.
1. Is the material for counterfeiting available? If yes, then proceed.
2. Are you willing to risk a Very Long Prison Sentence? If yes, then proceed.
3. Can you accurately reproduce the die, stamp, plate, etc.? If yes, then proceed.
4. Can you keep a secret? Can you Trust your co-conspirators?, etc. etc etc
If ALL of these come up yes, then decide if it is morally okay.
Just having the raw material is not enough to make people into counterfeitors, is it?
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"Financially, the US economy has degenerated into a sort of cargo cult, where people feel that they can continue to attract recycled petrodollars by dancing around piles of internet servers with their cell phones and their laptops."
-Dmitry Orlov |
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 02/06/2007 : 12:32:56
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quote:
Originally posted by pencilvanian
The reason the US Mint ended the steel penny in 1943 was beacuse a newly minted 1943 penny looked like a shiny dime, giving Americans the opportunity to pay one cent for a ten cent item or subway ride. (Some Americans have always looked for a way to game the system)
The subway companies had to install magnets to keep riders from cheating them.
You must be logged in to see this link.
I checked Wikipedia about the 1943 steel penny, notably, "Because the galvanization process didn't cover the edges of the coins, oils from the body would quickly rust the metal, turning the coins into a rusty mess." This matches my own observations about circulated steel cents I've found.
And why they were zinc-coated in the first place is beyond me. We all know how long zinc lasts when exposed to the elements, judging from all those grubby driven-over parking lot zincers. In shipbuilding, zinc is used in brick-sized sacrificial anodes, to prevent the steel hull from rusting in saltwater. These anodes have to be replaced frequently. Shouldn't the Mint have used a less reactive metal for the exterior? Steel, zinc, and nature... a losing combination: You must be logged in to see this link.
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Penny Search Totals:
806 zincs (1982-2006) 77.6%
227 coppers (1959-1982) 21.8%
4 wheats (1940-1950) 0.4%
1 dime (2004) 0.1%
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Investing in STEEL COINS
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