Will a copper penny ever go below 2x face?

[scyther]

With commodities getting weaker, do you think a copper penny will go below 2x face value? It's precariously close, but it never goes under. Also, do you think it will ever go below 1x face value at any time in the future?

I think it will go under 2x, probably not 1 though.

[henrysmedford]

Copper is up now. http://www.coinflation.com/

[HoardCopperByTheTon]

I remember when it actually did go below 1x. It was one of the few times you could get above melt for copper pennies. It was a great time to pick up a few spare Ryedales too.. as some folks just couldn't keep the faith.

[cap]

I remember when it actually did go below 1x. It was one of the few times you could get above melt for copper pennies. It was a great time to pick up a few spare Ryedales too.. as some folks just couldn't keep the faith.

Just curious, when did this happen?

[jmaii]

With commodities getting weaker, do you think a copper penny will go below 2x face value? It's precariously close, but it never goes under. Also, do you think it will ever go below 1x face value at any time in the future?

I think it will go under 2x, probably not 1 though.

Interesting question; should have researched it before I started hand-sorting pennies.

Using the data I put together for an older post, here's the copper spot price adjusted for 2013 dollars:



I added lines to show at what spot levels a penny is worth 1x, 2x, and 3x face value. Will pennies go below 2x melt at some time? Probably. Below 1x? It has before (when CPI-adjusted) any may again (the long dip from 1997-2004 is interesting), but as inflation continues it is less likely in the future. Periods when melt value was less than CPI-adjusted face: Aug 1930 - Sep 1935, May 1984 - Jun 1987, Apr 1993 - Apr 1994, Aug 1997 - Jan 2004.

I remember when it actually did go below 1x. It was one of the few times you could get above melt for copper pennies. It was a great time to pick up a few spare Ryedales too.. as some folks just couldn't keep the faith.

Just curious, when did this happen?

Looks like last time a 95% Copper penny was worth less than face in Copper melt was Dec 2008 - Jan 2009.

[cap]

Dang that was pretty recent.

[scyther]

That's an interesting chart. thanks. Is that using official or shadow stats?

[jmaii]

Data is from https://www.globalfinancialdata.com/ which is a premium service to which my library subscribes. The source notes:

Copper prices from 1800 through 1896 are taken from Anne Bezanson, Wholesale prices in Philadelphia, 1800-1861 (published 1936-1937) and 1852-1896 (published 1954): a series of relative monthly prices. Philadelphia: University of Pennsylvania Press, 1936-1937 and 1954, and represent the cents per pound for copper sheathing. Daily prices from 1898 to 1914 are for Lake Copper prices and for Electrolytic copper in NY from 1914 to 1920, and are taken from Metal Statistics for 1898 to 1913 and The Financial Review from 1914 to 1920. Monthly Data from 1890 through 1951 are taken from the NBER and represent cents per pound of copper, electrolyte wire in New York. Data are quarterly for 1890 through 1900 and monthly thereafter. Data from 1948 on use data from American Metal Market and represent the price of electrolytic (wirebar), New York refinery equivalent. Data after 1993 are from the New York Mercantile Exchange.

[scyther]

I meant how is inflation calculated?

[jmaii]

I meant how is inflation calculated?

I used official CPI, which was available monthly from Jan 1876 onward in that same premium database. I was tempted to use PPI (producer pricing index) but that's a governmental figure as well. Couldn't find an alternative monthly inflation figure that went far enough back, but I'm looking for suggestions if you know other methods.

[scyther]

I meant how is inflation calculated?

I used official CPI, which was available monthly from Jan 1876 onward in that same premium database. I was tempted to use PPI (producer pricing index) but that's a governmental figure as well. Couldn't find an alternative monthly inflation figure that went far enough back, but I'm looking for suggestions if you know other methods.

I don't, just wondering. The official stats understate inflation at least in some areas, but I think shadowstats overstates.

[zKott]

scyther,

What is your approach towards copper investing? ...or better yet, what is your intent?

I've followed a lot of your posts and I get mixed vibes from you.

You obviously know a great deal about what you are talking about, but I've seen you say that you're done sorting and you seem to feel an aggregation of volatility towards copper in general.

I'm sure you don't wish for copper to plummet, so are you just pessimistic on this subject or are you just apprehensive of your investments, as most people are? (...or do you even consider this an investment? ..or a hobby?)

More interestingly though, I am fascinated by your stance on copper pennies. Do you still sort? If not, are you stacking Nickels? What is your stance on Nickels? What is your goal to accomplish? (meaning how much copper etc?) If your not into either, what are you into these days? (Au/Ag?)

I hope it is acceptable to post this in this thread and I hope not to offend you so please don't interpret my inquisition as abrupt, insulting or intrusive.

[Mutation]

I think if the penny goes below 2X face it'll be one thing, GETTING them will be another. It could be your typical paper/physical disconnect, just my two cents!

[scyther]

scyther,

What is your approach towards copper investing? ...or better yet, what is your intent?

I've followed a lot of your posts and I get mixed vibes from you.

You obviously know a great deal about what you are talking about, but I've seen you say that you're done sorting and you seem to feel an aggregation of volatility towards copper in general.

I'm sure you don't wish for copper to plummet, so are you just pessimistic on this subject or are you just apprehensive of your investments, as most people are? (...or do you even consider this an investment? ..or a hobby?)

More interestingly though, I am fascinated by your stance on copper pennies. Do you still sort? If not, are you stacking Nickels? What is your stance on Nickels? What is your goal to accomplish? (meaning how much copper etc?) If your not into either, what are you into these days? (Au/Ag?)

I hope it is acceptable to post this in this thread and I hope not to offend you so please don't interpret my inquisition as abrupt, insulting or intrusive.

I'm not insulted, and I can understand how you would get mixed vibes. Yeah, I've grown a rather pessimistic and a bit jaded about copper, and silver even more so. When I first got into this (maybe 14 months ago), it seemed like an easy, fun, common sense way to make money. I didn't realize at the time how low copper had been less than 10 years earlier. I thought it was just inflation making pennies worth 2x face value, but now I realize that while inflation is a factor, it's mostly just that copper has gotten more expensive in the last decade. I thought the melt ban would be repealed soon (like the ban on melting silver was after just a few years), or that they might stop making pennies (which, again, I assumed would lead to legal coin melting), but now I don't think that anymore. I heard about all the money printing, and assumed inflation would follow quickly, but I didn't understand much about the fed back then (I still don't understand very much, but a little more). I didn't realize they would actually reduce the money supply; I thought money printing only went one way. I didn't realize that inflation had actually been rather low in the past decade, and had little if anything to due with rising metal prices.

I've watched the value of my silver fall a lot, and I've learned that the fundamentals for silver aren't really any better now than they were when silver was $5 an ounce. I've thought more about the very long term fundamentals of metals, and realized that as technology improves, less metal will be needed for industry as more substitutes are found, and more supply will be available as asteroid mining and other new sources are utilized. I've learned (recently) that there nearly 25 billion ounces of silver in the world, which is a lot higher than some people believe. I've also thought about the future of numismatics and realized that the trend is (probably) going to be down, at least for US coins.

I haven't spent that much money on this (in fact, almost nothing compared to a lot of people here, although a decent amount relative to how much money I have) but I have spent a lot of time hand sorting coins, and while it's been fun, the main reason it was fun was because I thought I was making easy money. So, I'm a little annoyed when I hear about how the commodities bull is ending, how we should short copper because China changed some policy (luckily that doesn't seem to have resulted in anything), or anything like that. I still sort pennies occasionally, because I'm bored and it's fun to find wheat pennies, but not as much as I used to. If you look at my signature every once in a while, you'll notice that the nickel total goes up every week, but the penny total only occasionally.

My position on nickels: if you believe there's a significant possibly that severe inflation is coming, you may as well stack bricks of them. They obviously have the best metal-to-face value ratio of any coin still being minted, and it doesn't cost you anything- not even time to search. That said, I don't see much profit there. I don't personally stack bricks since I have no income and a limited amount of cash to work with, and I already have enough tied up in copper pennies (I'd guess around $700, which is significant for me). I sort nickels mostly just because I like collecting them (only 6 left until I have all the Jeffersons!).

I don't particularly have a goal for stacking, and I'm not buying silver at the moment. I'm waiting for a bottom, and then I might buy, although I probably shouldn't since I think the long term trend is down.

[scyther]

Under 205% now .

[reddirtcoins]

Might happen Friday

[JobIII]

I'm thinking it could be tomorrow.

[Zincanator]

And so it was...

[scyther]

Next stop, 1.5x face...

[rsk1963]

Dr. Copper's getting beat up in this royal rumble

[cupronickel]

What a great thread !
Scyther,
Eventually inflation will take hold, and once the velocity of money shoots up (or even returns to normal), commodity prices will rise.
I agree that with technology and substitutes prices should decrease, but I think printing will overwhelm that.
It is better to invest your money five years too early, than five minutes too late.
My investment choices are :
1) a total stock market ETF, ticker symbol "VT" (you'll need a brokerage account)
2) one ounce rounds of Ag & Au
3) nickels & Copper pennies
I avoid bonds

[John_doe]

Dr. Copper's getting beat up in this royal rumble

By who might I ask?

[stlouiscoin]

dropped to 1.99 earlier this week

[henrysmedford]

Just found the Coinflation App. for iPhone https://itunes.apple.com/us/app/coinflation/id535653219?mt=8. Makes you feel good today.

Untitled by henrysmedford, on Flickr

Untitled by henrysmedford, on Flickr