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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 02/09/2007 : 20:33:52
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I didn't really know how to title this thread. What I'm asking is when do you think they will come out with a 'nickel' that is no longer made out of 75% copper and 25% nickel?
If it happens this year (07) then we would need to start sorting nickels like we are doing with pennies now.
I would like to hoard as many nickels as I can now before the change is made.
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Burn paper dollars before you melt coins.
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Edited by - Ardent Listener on 02/09/2007 20:37:37 |
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479 Posts |
Posted - 02/09/2007 : 20:48:27
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Good Qwestion!
Since no one on the outside knows, all of our guesses are anecdotal data points.
But if we graphed or averaged our guesses, we might in aggregate know more than the sum of our parts.
I agree that buying nickels to the degree that you can afford them right now is a good inverstment, but as Ardent and others have pointed out, no investment is perfect.
Should we have a poll as well as a discussion?
This is a very important qwestion for all of us.
Ever heard of the Delphi Method for guesstimating future prices?
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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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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 02/09/2007 : 21:25:56
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If I were to guess as to when the copper and or nickel will be removed form the US five cent coin, I would wait and watch to see what congress was doing.
The Mint might like to pretend that it has final say as far as what can and can't be done with our coins, coin production and such, but it is congress that tells the Mint what to do, what coins to produce, what comemmorative coins to make, etc.
Congress decides what the coins should consist of and the mint makes the coins by congressional law, they quote the public law title on their website when it comes time to make a new coin or change the face of a coin.
If I am not mistaken, the anti melt law enforced today originated with congress to prevent the melting of silver coins in the 60's. After the silver price stabilized, the law remained on the books but no one bothered to enforce it. Only now with nickel and copper going up in price and the government fearing a coin shortage, the powers that be dusted off this relic of legislation and put it back in force, though it never went away.
Much like the 'law' the prohibited the hoarding of gold or dealing with the 'enemy', this relic is pulled out of the dustbin of legislative history and once again is fully enforceable for the government's own ends.
I wonder how many other outdated laws still on the books the government might try to use to control the government 'of the people, by the people, for the people'?
Watch congress and see when the coins get changed.
Murphy's law
No one's life, liberty or pursuit of happiness is safe when the legislature is in session. |
Edited by - pencilvanian on 02/09/2007 21:29:22 |
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Frugi
Administrator
USA
627 Posts |
Posted - 02/10/2007 : 00:47:46
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CuproNickel nickels will probably be made of alum. or steel or a mix of the two. This will probably happen in 2009 when the new penny design is released, and it's composition will also change to alum. or steel or a mix of the two.
Do keep in mind that cupronickel is of itself a great metal and the cost to make the nickel including labor and materials exceeds the value of the nickel itself. Also the metal value of the nickel is worth more than the nickel, but the problem is the cost to seperate the nickel from the copper is to costly to make "our" nickels worth saving for investment purpose. Refiners do not want copper that has more than 15% nickel in it -it is considered contaminated copper; not good nickel and not good copper just "bad" copper. Even though the melt value is stated on a very trustworthy site You must be logged in to see this link. as being close to $0.07 per nickel, it really isn't accurate because you will never find a willing educated buyer to buy the scrap cupronickel. It is unlike 90% silver coin, which could be easily melted or even a 95% copper coin which can be easily melted. This coin takes an additional process to seperate the lesser dominate metal and is costlier. It would actually be more cost efficient to make new rather than recycle this particular metal. So there is your problem, it would be finding a buyer easily. It would not be as liquid as some other investments, such as Canadian nickel nickels (in my opinion these are the best buy on the coin market right now) I can't help but buy as much as I can as often as it is available to me. I would probably spend my last dime on a Canadian nickel. I buy about 25 rolls a month pre sorted pre1982 nickels, most are usually proofs or BU's from the 1960's left over from when Americans used to collect Canadian coinage. Most coin dealers despise Canadian coins and will sell them at equal value to US coinage to me. I also get usually about 20 rolls of pre1996 Canadian cents most often from about the 1960's most often in BU condition. The only reason I have even saved a few jefferson nickels would be in case SHTF they would be accepted by merchants along with quarters and half dollars. In the early days of worldwide SHTF don't be quick to spend your copper hoard, it will take most folks awhile to realize most coins are worthless too. I have about $100.00 USD in US nickels and that s all I care to have, I don't believe they will ever be traded for their metal content but our pennies will be and Canadian pennies AND nickels will be. The only other reason to save a jefferson cupronickel nickel would be for numismatic purposes, but definitely not for the metal "value".
My brother came back from China tonight for a two week visit, we talked a bit about the Chinese economy and he says if we melted all the pennies ever made in the USA and sent it to China it would be used up in two days. Also he said construction work in China goes on 24/7 year round it never stops, not at night not ever, except on the Chinese new year (Feb. 17 in China). I wondered if it was more rampant in the summer than winter he said no, same all year non stop. He seems to think this should keep up for the next 20 years, mainly due to poverty level people working for about 100 yuan a day or about $10.00 USD and thankful for it. He says you can go out to the suburbs of Beijing and find 10,000 people any given day that will work 20 hour days for 100 yuan. Also interesting is that China can build a magnificent building in 1/3 the amount of time it would take the US to build the same building. This is mainly due to the never ending cheap labor. My brother also forsees within 20 years the extremely poor become lesser poor and actually moving into structures that may require copper wiring, as mentioned in another topic. Either way I am forecasting a 20 year bull run on metals especially steel. And apparently China does not have the natural resources it needs to keep building at it's current rate so it will be a buyer of metal for some time to come.
Upon realizing my error pointed out by a fellow hoarder, I changed the conversion rate I had listed for yuan from 100 = 1 to 100 = 10
The actual rate is 1 yuan = $0.13 USD.
Real Eyes Realize Real Lies
Buy Less. Work Less. Live More.
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Edited by - Frugi on 02/12/2007 12:49:46 |
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Ryedale
Administrator
USA
523 Posts |
 Posted - 02/10/2007 : 08:13:48
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"My brother came back from China tonight for a two week visit, we talked a bit about the Chinese economy and he says if we melted all the pennies ever made in the USA and sent it to China it would be used up in two days. Also he said construction work in China goes on 24/7 year round it never stops, not at night not ever, except on the Chinese new year (Feb. 17 in China). I wondered if it was more rampant in the summer than winter he said no, same all year non stop. He seems to think this should keep up for the next 20 years, mainly due to poverty level people working for about 100 yuan a day or about $1.00 USD and thankful for it. He says you can go out to the suburbs of Beijing and find 10,000 people any given day that will work 20 hour days for 100 yuan. Also interesting is that China can build a magnificent building in 1/3 the amount of time it would take the US to build the same building. This is mainly due to the never ending cheap labor. My brother also forsees within 20 years the extremely poor become lesser poor and actually moving into structures that may require copper wiring, as mentioned in another topic. Either way I am forecasting a 20 year bull run on metals especially steel. And apparently China does not have the natural resources it needs to keep building at it's current rate so it will be a buyer of metal for some time to come."
Frugi,
It is facinating to hear this information first hand. It's hard to even understand or comprehend that the people are so pelentiful and willing to labor for so little. I work at a major pharmaceutical company (Pfizer) and they cannot seem to get the buildings at my site torn down and made into "green space" fast enough.
My question is with respect to the wages. I have to believe that they are being provided for in some other way by the government (communism) otherwise how can they eat, stay warm, get clothing etc etc for 1.00 per day? I think this would be a very interesting subject to study. I think it may even be a good docomeentary. However the truth is probably clasified by the Chinese government. In special cases, with overtime, holiday etc, I have had many days where I have made more in one day than these people make all year. (skilled trades work). It's no wonder there is a race to the bottom for our greedy corporations to get off shore as fast as possible, but there has to be a "real" expense somewhere, perhaps at the government level. There must be at a minimum "food" being subsidised. I'm sure the living conditions are interesting too. Another issue is the sanitation, and environmental polution, this is driving companies out of the US, because it is cheaper in other countries, but the tide will turn some day, and perhaps these people will turn on thier government someday too. It seems they are all brainwashed slaves for the master.
Great post Frugi, keep the good stuff coming. Ryedale
Ryedale
Hoard Copper Pennies,
The market will develop |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 02/10/2007 : 11:05:58
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Thank you Frugi for the heads up as far as China's construction is concerned.
It is one thing to hear from some analyst or expert describe how China is growing via charts, consumption levels, forecasts and the like, but to hear about the non-stop 24 hour building that is going on from an eyewitness, That really hammers it home.
As far as how can they manage to do so much so cheaply,
my theory is, and this is just a theory, we must ask what are the staples available to the Chinese workers? Rice, noodles, vegetables, cheap but healthy foods. Consider the meals served in a Chinese restaraunt, Except for the meat in the dishes, the basic ingredients (rice, vegetables, noodles, etc)are relatively cheap if you decided to buy them yourself and prepare a Chinese meal at home.
No insult to anyone is intended by this, I don't want anyone to think I am putting anyone down, I simply wanted to point out that when you prepare meals from home form the least expensive and freshest ingredients, instead of buying prepared meals, the prices are much cheaper. It is a cost savings to prepare food yourself (A topic for WTSHTF area maybe?) so that is one way the Chinese workers can afford to survive.
There may be subsidised housing and medical care, maybe meals offered for the workers too.
Consider this, though,
a Chinese farmer, living on what he or she grows and a little profit from selling their food, possibly earning 25¢ a day (just a guess) who decides to work as construction worker, now works just as hard as they did on the farm, but earns more and doesn't have to worry about how the crop will do this year, it makes sense to the farmers to work in the city. I believe this is how the industrial revolution played out in europe and america in the 1800's.
Just a thought on Jefferson nickels, While they may be less desirable than canadian nickels due to their copper content, perhps the best thing to do is to sell off the Jefferson nickels to speculators when the value of a US nickel is 10¢ or 15¢ melt value, or percieved melt value.
If someone wanted to melt US and Canadain nickels together to make their own monel (2 us and 3 Canadian, 70% nickel 30% copper) and then sell said monel, I would think their would be a buyer for that.
Just a guess, of course. |
Edited by - pencilvanian on 02/10/2007 11:28:59 |
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479 Posts |
Posted - 02/10/2007 : 11:14:05
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Great post FRUGI
You bring two interesting topics to the table.
1. Cupronickel's true melt value is determined by both the theory and the practice of melting.
In theory, coinflation is right, the melt value is high.
In practice, well, we'll just have to wait and see won't we.
2. Chinese consumption. Although this topic is brought up often, your first hand knowledge is important to us.
Of course, as Ryedale points out, Chinese labor is subsidized, but so is Japanese labor, and even American labor. As a percentage perhaps Chinese labor is highly subsidized, but in absolute terms I'm sure that first world labor is more subsidized than that.
What matters to this "price of copper conversation" is, Can China continue to grow fast for 20 years like Frugi's brother predicts?
I have not been to China and Frugi's brother has, but I think it is unlikely that the pace of construction can continue like this.
Several factors besides plentiful cheap labor must all line up simultaneously to sustain this growth, namely;
Plentiful energy supplies, social "rest" as oppossed to unrest, raw materials other than energy, and some level of breathable air, drinkable water, etc. If their environment becomes too toxic, at some point the work can't go on.
As far as using up all the US Pennies in two days of Chinese consumption, it sounds like the Grinch taking the time and effort to come back down the fireplace and take that very last crumb that was even too small for a mouse. There are real world examples of this kind of thing. I'm sure that many a third world country has seen many a first world country Grinch away their crumbs in similar manner.
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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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beercritic
Penny Pincher Member
USA
112 Posts |
Posted - 02/11/2007 : 19:11:13
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OTOH, I understand the cupro-nickel composition of the 5 cent coin to be nearly ideal when it comes to maritime applications. The metal composition is much more resistant to the ravages of the sea, than most other alternatives. Certainly the cheaper alternatives.
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 02/11/2007 : 19:29:26
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quote:
Originally posted by beercritic
OTOH, I understand the cupro-nickel composition of the 5 cent coin to be nearly ideal when it comes to maritime applications. The metal composition is much more resistant to the ravages of the sea, than most other alternatives. Certainly the cheaper alternatives.
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But how can I glue my nickels to the bottom of my boat?
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Burn paper dollars before you melt coins. |
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DadaOrwell
Penny Sorter Member
99 Posts |
Posted - 02/11/2007 : 19:56:12
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So...can cupronickel be melted down and used as cupronickel to make other things? is that efficient? what kinds of things are made of it besides nickels?
Want freedom?
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Edited by - DadaOrwell on 02/11/2007 19:57:15 |
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beercritic
Penny Pincher Member
USA
112 Posts |
Posted - 02/11/2007 : 20:18:24
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ArdentList : A moderator picking on a member.... It's about time :-)
DadaO: I could be way off. I sometimes am. I interpreted what I read as to mean the cu-ni in nickels to be perfect for maritime uses. I dunno if melting/casting would be more effective than, say, hammering the coins to shape, to get what you needed.
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 02/11/2007 : 20:31:14
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Quote:
Copper Nickel
One additional material which should be considered along with steel, stainless, and aluminum is Copper Nickel.
One can ignore paint altogether with Copper Nickel (CuNi). It is very easy to fabricate and is both easy to cut and to weld using the MIG process.
There are two alloys which are most common:
70/30 Cu Ni,.........(The content of a US Nickel)
and 90/10 Cu Ni.
These numbers represent the relative amounts of Copper and Nickel in the alloy.
With its higher Nickel content, 70/30 is the strongest and most expensive of the two.
(!)
In the US, 90/10 Cu Ni is currently priced a little over $4.20 (USD) per pound
and 70/30 Cu Ni at around $5.60 (USD) per pound-
(!!!)
-both based on a minimum order of 2,000 pounds.
Of course, the cost would go down quite a bit for a larger quantity order and a vessel built of Cu Ni would make use of a greater quantity than 2,000 pounds.
.........How many nickels equal one pound again? |
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Metalophile
Penny Collector Member
USA
320 Posts |
Posted - 02/12/2007 : 01:06:37
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I think 100 yuan is closer to about 13 FRN.
Metalophile |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 02/12/2007 : 11:29:01
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quote:
Originally posted by beercritic
ArdentList : A moderator picking on a member.... It's about time :-)
DadaO: I could be way off. I sometimes am. I interpreted what I read as to mean the cu-ni in nickels to be perfect for maritime uses. I dunno if melting/casting would be more effective than, say, hammering the coins to shape, to get what you needed.
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Of course I'm only kidding. Those who have been around know I have posted about maritine uses of cupronickel. The History Channel has a program about copper and cupronickel was showned being used in ship building. Maybe my nickels will be used in a ship some day. I just hope it's not one for the Peoples Republic.
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Burn paper dollars before you melt coins. |
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DadaOrwell
Penny Sorter Member
99 Posts |
Posted - 02/16/2007 : 08:45:22
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I think another relevant question might be
"when will people become willing to pay more than five cents for a garden-varieety, pre-2008 nickel?"
And what conditions will have to come into play first?
Want freedom?
Move to New Hampshire!
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DadaOrwell
Penny Sorter Member
99 Posts |
Posted - 02/16/2007 : 09:29:26
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Here are some other questions we're probably all asking ourselves:
How many nickels should we buy?
When should we buy them?
What will we do with them after purchase?
Who, if anyone, will we be able to sell them to at a profit and when?
Under what circomestances would it be profitable to simply return them to the bank at face value?
I have an answer to the last question: For me, taking them back to the bank at face value would be appropriate in the event of deflation or even what I call "microdeflation."
Microdeflation Example: Say you had bought 100 ounces of silver for $1000
A year later you think silver has gone up too high too fast. So you sell them a little under the new spot price, for $1400. You made a 40% annual rate of return.
You take the $1400 check to the banks and turn it into $1400 worth of cupronickels.
You hang onto the nickels. Over the following two months the ever-unstable price at which you can buy silver dips back down to $10 an ounce. In effect, the face value of your nickels has risen in value against silver during that time - Microdeflation. So you go to the bank and simply deposit your $1400 worth of nickels and use that money write a check for 1400 worth of silver. Now you have 140 ounces of silver even though your original investment was only worth 100 ounces. Woo hoo! This above is a pretty reasonable if optimistic scenario and the one I would be shooting for.
On the other hand, if you sell the silver and buy the nickels and then the price of silver shoots way up, the dollar dives dramatically...you're protected somewhat by the intrinsic metal value of the nickels. I think it's less likely you'd make a profit in this scenario because it's relatively such uncharted territory. But who knows.
The scenario this approach least prepares you for is probably modest stable inflation coupled with recession. But you don't lose much even then.
So my thinking is you just hold on to the nickels planning to spend them if an irresistible bargain presents itself and you don't have any other extra money on hand. Your alternate plan is to hang onto them longer and maybe use or sell them if they openly decouple from a freefalling dollar.
With cash FRN's or a run on your bank account there is no alternate plan for the money!
Want freedom?
Move to New Hampshire!
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Edited by - DadaOrwell on 02/16/2007 09:35:13 |
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479 Posts |
Posted - 02/16/2007 : 10:01:40
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Good Qwestion Dada.
"When will people become willing to pay more than five cents for a garden-variety pre-2008 nickel?"
I'm saving these for my children and I have no idea whether I will ever use them.
I seems to me that Nickel and Silver both are in actual deficit, meaning that more nickel and silver are used each year than is mined out of the ground.
It looks like the stockpiles of these metals are decreasing steadily. The steady direction of the trend is more important than the speed.
If I lived near the Canadian border, I'd get as many Canadian Nickels as possible, then hide them from my children so they don't get spent at face value. I fully expect these to be very valuable someday, but not any time soon.
A few collectors, however, may pay a small premium over face value soon. Right now garden variety nickels are easily available at face value, so I can't see anyone paying a premium until they are not easily available. How soon could a real shortage occur? That's anyone guess, but I guess, relatively soon.
What conditions will have to come into play first is a more difficult qwestion to answer.
Some possibilites are;
1. Severe deflation.
In this scenario, the nickles could of course be spent at face value.
2. A really huge speculative bubble in the value of Nickel.
In this case, the govMint might "call in" the coins and basically demand that people turn them in at face value.
If you hoarded after the confiscation / call-in, then your nickels would be rare and therefore valuable, also illegal, I might add.
3. After the Amero replaces the dollar and 99% of all dollars and fractional coins go out of circulation, the melt ban would likely be lifted because at that point it would be in the govMint's interest to see the remaining reminders of the past destroyed.
I like thinking about the future but, I certainly do not have any special insights into the future.
I'm fairly sure about one thing though, this is a long term gambit. I do not believe that the nickels that I save today are going to return a profit to me within 5 years. I'm fairly certain that the horizon is farther out than that. I'm also confident that the return will be handsome eventually. I think that in 20 years my family and I will be very happy to have those old nickels.
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just carl
Penny Hoarding Member
USA
601 Posts |
Posted - 02/21/2007 : 11:26:40
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As to China wages just wait until they become more like us and the Unions come in. Then you'll see a stop to all that construction during overtime, double time, triple time, etc.
Now don't forget one of the reasons Copper is so expensive is it's usefullness in electrical work. However, as moderazation comes into play and more and more of industry leans towards fiber optics and people everywhere go to cell phones, wireless computers, etc., the necessity for copper will deminish everywhere, including China. Copper and Nickel both are used heavily in munitions but that too is changing. As most people that utilize guns will tell you even plastics are being used for shell casings, less Copper Jacketing is being used also. Guns that used to be all stell, Nickel, Chrome are now being made of plastics. Where TVs, radios, phones, recording devices such as the old tape recorders now have less and less usage of Copper, there too the necessity of precious metals will eventually deminish. I would think in the near future, should thers present wars stop, the necessity for metals as we know it today will drop sharply and the hoarders of such coins will be at the banks adding to their savings accounts by depositing mountains of coins.
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beercritic
Penny Pincher Member
USA
112 Posts |
Posted - 02/22/2007 : 13:44:46
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I'm guessing soon.
Will they eliminate the 5 cent coin and revalue the cent to 5 cents, *OR* will they replace the metal with something cheaper? If they do the latter, I'd hope it would be steel, so they could be sorted with a magnet.
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When will the cupronickel nickel be replaced?
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