Nice news story with realcent in story.

[henrysmedford]

From--http://www.investopedia.com/financial-edge/0912/why-are-people-hoarding-coins.aspx?partner=SFGate#axzz27gOBVEO9

Why Are People Hoarding Coins?
September 26, 2012 | Filed Under » Commodities, Currencies
Stocks and bonds are common investment vehicles which are owned, directly or indirectly, by investors and pension holders. Metals also have a market value; silver and gold, for example are traded daily. Other metals also have value and a new breed of investors is emerging: the coin hoarder.

What's in Your Change?
All American coins are made from a variety of base metals. Prior to 1965, dimes and quarters were made primarily of silver, until the soaring cost of silver forced the United States Mint to change the composition of the coins to a cheaper alloy. Prior to 1982, pennies were composed of 95% copper, until lower-cost zinc replaced a substantial amount of it. Nickels are still composed of 25% nickel and 75% copper. As the underlying values of the metals rise, the coins become theoretically more valuable. At today's prices for copper and nickel, a five-cent piece is worth almost seven cents. There's a catch, however. Since 2006, it has been illegal to melt down pennies and nickels.

While they can't melt them down, there's nothing stopping hoarders from stockpiling the coins. Online sales sites, such as eBay, allow for trading coins in bulk. Coin hoarders gather on online discussion forums, such as Realcent.org, to discuss everything from coin sorting methods to building hidden bulk storage in their homes. Small-time hoarders get their coins from their local bank tellers, whereas more serious ones buy online in bulk.

Investor or Hoarder?
There is a fine line between investing and hoarding. Coin investors buy and sell based on the value of the coin itself, taking into account its history and rarity. Hoarders are only interested in the underlying scrap value of the base metals. Their investments won't pay off unless the government lifts the restriction on melting currency.

Pennies and nickels are the most popular with hoarders, based on their high copper content. Nickels are easier to collect, as they still contain the same metal levels as always, so there is no sorting required. Pennies take longer to check dates and sort by hand, although some hoarders have devised systems to automatically sort them. The high silver content in pre-1965 dimes and quarters has resulted in most of them already having been removed from circulation by collectors, and they are rarely seen mixed in with other coins.

Hoarders have many different reasons for tucking coins away. Some are waiting for the day when the U.S. Mint stops producing pennies and lifts the melt ban. Others feel that the coins will be a valuable currency if the U.S. government collapses. Some simply get a rush from what they see as a subversive act.

Is This a Unknown Lucrative Investment?
Does hoarding coins really make sense from an investing perspective? The melt ban makes realizing the value of the investment uncertain at best. Metal prices change daily and they could once again drop, making the coins worth less than their face value. On the other hand, the risk of the investment is zero - the coins will always be worth at least their face values. Finding coins and sorting them takes a substantial amount of time, which could be spent on other investing or income-earning activities. The cost of storage also lessens any potential net profit. Based on all of these factors, coin hoarding is more akin to a hobby than an investment.

Coin hoarding in the United States is not yet affecting the amount of coinage in circulation, but it is having significant impact in other countries. Argentina is facing a coin crisis, especially in Buenos Aires. In the Philippines, laws are being contemplated to criminalize hoarding of more than a nominal number of coins. The U.S. Mint can simply forge more coins if it recognizes a shortage down the road, but it will likely be reluctant to do so with input prices so high.

The Bottom Line
As the value of metals such as copper and nickel rises, investors are increasingly interested in tucking away vast amounts of pennies and nickels, hoping that their investments pay off some day. Based on the amount of time needed to collect the coins and the opportunity cost of the investment, it may be a losing, albeit fun, enterprise.

by Angie Mohr
Angie Mohr is a Chartered Accountant and Certified Management Accountant who has worked with thousands of business and personal finance clients from home-based entrepreneurs to rock bands to celebrity chefs. She is also the author of the Numbers 101 for Small Business series of books which have been translated into several languages and are sold worldwide. Her new book: Money$marts: Teaching Your Kids the Value of a Buck will be released in the fall of 2011.

Angie also freelances for several newspapers and magazines, both in print and online. She is passionate about gardening, cooking and bringing more local foods into our diet. She is Canadian through and through but lives by the ocean in Savannah, Georgia with her husband, two children, six cats and innumerable chickens. Follow Angie on Twitter @angiewritergirl.

[SilverDragon72]

Nice article

[ZenOps]

As a Canadian with a $1.02 dollar, I can say without doubt... I'm coming for your nickels.

It didn't make *too much* sense back in 2007 or earlier, when the Canadian dollar was more like 70 cents - But now that we are rounding everything to the nearest nickel, and copper confiscation in Canada will be finished in a few months, I will need a source of coin.

Canadians are used to using 7 and 8 gram coins as $1 and $2 coins, so there might just be a mad rush for the 5 gram US nickels (even if "just" cupronickel and not pure nickel)

Europeans who are forced to pay $1.23 for a cupronickel coin are also coming for the nickels.

$100 per visit, every visit. Beforewarned

[SilverDragon72]

As a Canadian with a $1.02 dollar, I can say without doubt... I'm coming for your nickels.

It didn't make *too much* sense back in 2007 or earlier, when the Canadian dollar was more like 70 cents - But now that we are rounding everything to the nearest nickel, and copper confiscation in Canada will be finished in a few months, I will need a source of coin.

Canadians are used to using 7 and 8 gram coins as $1 and $2 coins, so there might just be a mad rush for the 5 gram US nickels (even if "just" cupronickel and not pure nickel)

Europeans who are forced to pay $1.23 for a cupronickel coin are also coming for the nickels.

$100 per visit, every visit. Beforewarned

Oh no you don't! You can only take our nickels...for an even exchange of yours!

I do like the Canadian nickels....and I always welcome new additions to my hoard!

I have a large amount of US nickels (though not like Adam Young's numbers)....and plan on getting more in the future

[henrysmedford]

Europeans who are forced to pay $1.23 for a cupronickel coin are also coming for the nickels.

$100 per visit, every visit. Beforewarned

FYI you can only take $5US FV over the border but you can ship $100 FV From Just the last thing we need is jails full of Canadians with nickles in there pockets. --http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm

Under the new rules, it is illegal to melt pennies and nickels. It is also illegal to export the coins for melting. Travelers may legally carry up to $5 in 1- and 5-cent coins out of the USA or ship $100 of the coins abroad "for legitimate coinage and numismatic purposes."

Violators could spend up to five years in prison and pay as much as $10,000 in fines. Plus, the government will confiscate any coins or metal used in melting schemes.

[Kurr]

I thought it to be a very fair article.

I also appreciated not only the fact that we were mentioned as a discussion forum vs an alternative tag and the we were the ONLY one mentioned, lol.

[ZenOps]

Haha, I'm going to bring you people in the US 627 grams of iron coinage (100 iron loonies) and trade it for a 22 pound box $100 of cupronickels (About 2% exchange rate)

Either that or a bill, but I'm still curious to see if a US bank would take foreign iron coinage (I doubt it) In Canada the main five banks are becoming increasingly hesitant about accepting US bills, instead requiring people to go to FOREX to do their conversions.

In my mind, iron is still only $13 per tonne, and nickel is still about $1.60 per ounce.

$100 is legal for "legitimate coinage and numismatic purposes". All one has to do is declare you are are coin collector, and/or you need them for circulation (which is true)

[PolishPunisher]

I find it interesting that every article is fixated on melting. Melting does not have to occur for metal to be of value.

[scyther]

But now that we are rounding everything to the nearest nickel, and copper confiscation in Canada will be finished in a few months, I will need a source of coin.

!? I hope you're just referring to the removal of pennies from circulation...?

[ZenOps]

We didn't make any dimes, quarters, or halves with any copper content at all. Once the pennies are taken out of circulation, we Canadians will only have the nickels from 1982 to 1999 which will have *some* copper content. So it is in effect copper (coinage) confiscation.

Although noone is going to be ripping my plumbing out, that is a different story altogether (One can now get plumbing repairs done for "free" if you sell your copper piping in exchange for PEX)

Every US coin has been or currently is mostly copper - penny, nickel, dime, quarter, half, and the unused presidential dollars.

[scyther]

Yeah, I wouldn't call that "confiscation" unless they're forcing you to turn in all your coppers to the bank/mint.

[ZenOps]

Yeah, I wouldn't call that "confiscation" unless they're forcing you to turn in all your coppers to the bank/mint.

Well... Doing the math just by what I can tell. 42% of pennies withdrawn in Canada are copper (from my personal estimation) Which means about 10% of the copper pennies have been "hoarded" by the populace over the last 90 years or so.

Noone has really hoarded any zincers at any level of significance.

When the banks stop circulating, I figure about 90 percent of the coppers ever made in the last 90 years will make their way to "the crown" and 99 percent of the zincs and steels. The average Canadian will be left with maybe 15 pennies of the 900 pennies that is their "fair share". There will be some hoarders with maybe a $25 box worth inside a large piggy bank, but the vast majority will have less than 4 pennies.

When circulation stops at the banks, it will stop rather abruptly... Whatever most people have laying on their desks and in their couches is what they "own" (and many people will still continue to deposit after that time too)

Its interesting to note: That if you really really want pennies, you can still get four boxes at a time from the US ($100) as long as they don't change the rules. The legal limit of penny exports from the US from 1972 to 1974 was $1 (100 pennies maximum)

Would you believe that its illegal to bring US cheese into Canada?

http://www.cbc.ca/news/canada/story/201 ... tions.html

Copper or any metal could be made illegal at any point in time, and historically has happened many times in the past. I kind of feel sorry for the officers that will probably go to jail for bringing US cheese into Canada, but those are the rules.

[scyther]

Yeah, I wouldn't call that "confiscation" unless they're forcing you to turn in all your coppers to the bank/mint.

Well... Doing the math just by what I can tell. 42% of pennies withdrawn in Canada are copper (from my personal estimation) Which means about 10% of the copper pennies have been "hoarded" by the populace over the last 90 years or so.

Noone has really hoarded any zincers at any level of significance.

When the banks stop circulating, I figure about 90 percent of the coppers ever made in the last 90 years will make their way to "the crown" and 99 percent of the zincs and steels. The average Canadian will be left with maybe 15 pennies of the 900 pennies that is their "fair share". There will be some hoarders with maybe a $25 box worth inside a large piggy bank, but the vast majority will have less than 4 pennies.

When circulation stops at the banks, it will stop rather abruptly... Whatever most people have laying on their desks and in their couches is what they "own" (and many people will still continue to deposit after that time too)

Its interesting to note: That if you really really want pennies, you can still get four boxes at a time from the US ($100) as long as they don't change the rules. The legal limit of penny exports from the US from 1972 to 1974 was $1 (100 pennies maximum)

Would you believe that its illegal to bring US cheese into Canada?

http://www.cbc.ca/news/canada/story/201 ... tions.html

Copper or any metal could be made illegal at any point in time, and historically has happened many times in the past. I kind of feel sorry for the officers that will probably go to jail for bringing US cheese into Canada, but those are the rules.

Yeah, cheese imports being illegal is pretty weird. And making ownership/hoarding of metals illegal certainly could happen; I really hope it doesn't, of course.

But I still don't see this as confiscation. I don't really see the 900 pennies as their "fair share", or anything they're entitled to. Anyone with even a bit of money can get thousands of pennies if they want. The government isn't stealing anyone's pennies, just ending the opportunity to accumulate them(conveniently, for face value).

[ZenOps]

I always saw 900 pennies as every persons fair share. 3 pounds of copper and 3 pounds of zinc in coin form.

I can imagine back in 1933 people used to see $40 in gold coin (two ounces in eagle coins) as their right and fair share. You could have kept more or less depending on how much value you put in metal.

Did Khadafi really need 144 tons of gold. Would it have been better partially spread out to starving citizens? Why do only elites get to have the gold, the silver, the nickel, the copper, the zinc. Why must we be forced to use Iron as money.

[Sheikh_yer_Bu'Tay]

From--http://www.investopedia.com/financial-edge/0912/why-are-people-hoarding-coins.aspx?partner=SFGate#axzz27gOBVEO9

Why Are People Hoarding Coins?

This was a good article to read. Thanks for posting it.