The Nickel Hoarder

Before 1965, quarters were made of 90% silver and 10% copper. At the time, the value of the metal that comprised a silver quarter closely correlated with the face value of the coin.

From 1965, quarters were no longer made made with silver. They now contain 91.67% copper and 8.33% nickel.

If you find a quarter minted from 1932-1964 (or earlier) make sure to hang on to it. The value of the metal inside those coins is $3.52 as of this writing and that is with silver in a huge slump from market manipulation. Once inflation catches up with us, the price of silver should soar.

I wasn’t alive in the 1960s and don’t have very many silver quarters. This is also why I hoard nickels.

I have $1000 worth as of this writing and they are heavier than hell.

I hoard nickels for essentially the same reasons it would have been brilliant to hoard quarters in the early 1960s: the value of the metal that composes a nickel is worth the same as the nickel itself, 4.8 cents. The cost to actually produce a nickel is more than 9 cents as of 2013. That means the US government is losing over 4 cents for every nickel they produce!

The US government is stupid, but they aren’t that stupid. They will eventually correct this and when they do nickels will no longer be made of nickel but steel like they are in Canada. When this happens the face value of a nickel will be more than the cost to produce it. This is fine for the government – I’m sure they can waste the money somewhere else instead – but for you and me it means our coins are being devalued.

It is currently illegal to melt US currency but that doesn’t affect the price of selling pre-1965 silver coins or pre-1983 copper pennies.

By saving nickels I am investing in the metal itself while guaranteeing I will never have less than $1000. During deflation I am safe holding cash and during inflation, assuming the price of the nickel metal increases I could always sell my nickels for a profit.

When the US government changes over to a steel nickel you will still be able to find old nickels but at that point you will have to sort through them much like trying to find pre-1965 quarters. This is a huge hassle and won’t be worth your time. Better to stock up now and trade them in down the road when they have doubled or tripled in metal value.

So what do you think? Is this the safest or stupidest investment of all time?

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