NI vs CU

[pennypinch]

i havent had a chance to look at ni as a commodity or nickels for sorting...

as far as a commodity, besides the fed destroying the dollar, what are some of the fundamentals of the ni market that make it a good commodity play vs copper?

as far as sorting? Time wise, isn't copper sorting a better return? what do you look for in nickel sorting?

Copper vs Nickel... the showdown begins!

[Corsair]

I've been on "the wrong side" of this argument since I joined Realcent. I have absolutely no intention to buy a brick of nickels to hoard any time soon. I know that some people on the forum (and those like Ponce who don't visit anymore) had or have thousands of FRNs tied up in nickels. It's great to think ahead, but I just don't feel it's the smartest bet. Let's look at it this way:

If you are on the forum, and you are dealing with decent amounts of coin, that means you have a pretty stable buy/dump set up with your banks. That means you can easily purchase pennies, sort them, and if you wanted to, sell them and make a little money. There have been plenty of formulas thrown around on the forum about how much profit you actually make selling Cu cents, but I think there is a consensus that you do make some money. So, assuming all of that, why in the world would you tie up $100 in nickels if you could turn that into $100 in copper cents that you could sell for $140?

Moreover, I remember reading a post by a member of the forum that had the foresight to go out and buy a few boxes of pennies in 1981 and 1982 when the Mint announced a composition change for the coins. Two important things to learn from this information:

1. Banks weren't run on, pennies were readily available. One theory here is that if the nickel goes to aluminum, you won't be able to get them. History shows that to be inaccurate. That member was easily able to pick up a few boxes for himself.
2. Even after nearly thirty years, there are still plenty of coins in circulation. Sure, you have to look for them, but I bet the sorting was much, much easier in the five to ten years that followed the composition change. Why tie up the funds now if you can get them readily when the time comes?

My bottom line. Unless you have a large amount of FRNs that are doing you no good in a checking or savings account, and you can't up the ante when it comes to copper sorting, don't buy nickels. Just don't do it. Flip copper. You'll be much better off.

[uthminsta]

To make a long story short, I understand saving the pure nickel Canadians, but not the 75/25 US nickels.

[Lemon Thrower]

apples and oranges.

us nickels are mostly copper. the beauty of them is no sorting needed.

a nickel currently has 6.5 cents of metal in it, and costs more than that to produce. how much longer until they change the composition do you think? I would say 50/50 that 2011 is the last year with the current composition.

there was a law proposed a few months ago that would give the treasury authority to change composition without congressional approval. i didn't monitor what happened but would not be surprised if it passed. of course some lead time is needed but if copper stays up it wouldn't be that difficult to change to zinc.

one thing i am sure of is they will change the composition of the nickel before they discontinue the penny.

[pennypinch]

It did pass. Thanks for the great replies!
One thing that's interesting is that Canadian Nickel trades at spot as opposed to copper penny bullion... Why?

[natsb88]

Copper pennies are still relatively easy to find. In the US, most people get 20% - 25% copper. In Canada, it's even higher.

.999 nickels, on the other hand, are becoming rather scarce. The last few reports I've gotten from some of my suppliers suggested maybe 10% - 12% .999 nickels. Couple that with the lack of ANY .999 nickels in circulation in the US (beyond the occasional pocket change find), and you have a much tighter supply.

[999Ni]

well if the law passed and the nickel content is reduced to nothing or next to it, then it would be a good time to start saving all your US nickels AT THAT TIME. but for now, stick with pure 999 Ni.

copper is the base metal getting all the hype these days, but nickel has outperformed copper before. CU at 4bux? wow. nickel had reached 25bux just a couple of years ago and looks like its headed that direction again...

NI will always be needed for stainless steel and armed force uses, so the demand is there. besides, i just love how nickel looks and feels in my hands.

natsb88:
waiting on those 5lb. 999 Ni bags

[AdamsSamoa]

I buy them 10 bucks at a time..... saving up for the commposition change. I wont have to come out of pocket as much.

[pennypinch]

It is always good to diversify... however, even if nickel went up to its 25 year high, the nickel would have a base metal intrinsic value of 10 cents which is 200%... That still doesn't beat copper now at about 265%...
In the case it goes to its 25$ high, Canadian nickel bullion would be worth a quarter. If it trades at spot, why not just buy silver?
However, i am still not sure what the driving factor was for the 25$ high in 2007... any idea?

[97guns]

My bottom line. Unless you have a large amount of FRNs that are doing you no good in a checking or savings account, and you can't up the ante when it comes to copper sorting, don't buy nickels. Just don't do it. Flip copper. You'll be much better off.

this is why i stack nickels, im a prepper and do not have any cash in the bank. i felt my FRN holdings were still too large for my likeing so ive been looking for tangible items to get them into. nickels fill the bill perfectly for my situation, im not looking to "flip" just preserve the capital that ive worked hard to acheive.

[Roadrunner]

Copper is better for making profit/being able to flip on short notice.

Nickel is better for preserving your money in a smaller area.

(IMHO)

[TwoPenniesEarned]

If you have money that would otherwise go in a savings account or paper cash, buy nickels with it!

It is arguably better to hold both nickels and debt at current interest rates. If the interest rates on the debt skyrocket because of inflation, you can always convert the nickels over directly to service that debt if necessary....but in this eventuality, the nickels will also likely be worth at least 15 cents each.

In the other possible eventuality of a dramatic deflationary event (i.e. a depression), cash is king, and your nickel bricks will have tremendous purchasing power, all the more so because they are real money.

Ben Bernanke is printing money. Every time any government has printed money in the past, it has always resulted in a loss of confidence in the currency and resultant hyperinflation. I don't see our current situation as any different. The nickel is the only current American money worth owning. The rest of the world is dumping the dollar as fast as they can...you should too!

Owning nickels is a hedge against inflation. They will grow at the real rate of inflation, which will easily be 5-10% in the next decade. GICs are paying 2%....a net loss.

The other big downside of inflation is that it makes stocks, etc. appear to be growing in value, when in fact they are only "inflating". This doesn't stop the government from taxing you on that inflated amount of "equity". You get to keep the inflationary growth of a nickel all to yourself.

Remember, the dollar has lost 95% of its purchasing power over the last century. I think it's safe to say that it will lose at least as much again in the next one....if not much much more.

Nickel boxes are a cheap, tax free, no-fee, inflation adjusted savings account.

You Americans are unbelievably lucky to be able to walk into a bank with a $100 promissory note from the worst debtor in world history (your unsalvageably indebted government), and walk out with over $100 in precious metals. Take advantage of this while you can. In Canada, our government did away with Cupronickel nickels only ten years ago, and already there are only 30% of them left in circulation....and you need to work like a dog to pull them out and separate them from the steel sandwiches.

If I lived in the US, I wouldn't even need a Ryedale! I could just walk into a bank with 20% of every paycheque, and convert it into 75% copper & 25% nickel holdings. So easy.

[aristobolus]

To make a long story short, I understand saving the pure nickel Canadians, but not the 75/25 US nickels.

My thoughts exactly! As a matter of fact I was going to write this, but you beat me to the punch.

[coppertone]

If you are going to hold cash, why not US nickels, easy to obtain and no work involved. As an investment, pennies make more sense. 2.5-3.0 cents of value for 1 cent cost but time and expense to sort. Am Canadian and no longer buy nickels to sort for .999. I buy copper instead. With recent discussions about eliminating the penny in Canada it will only be a matter of time before the melt ban will disappear and the extra value in the metal can be realized.

[frugalcanuck]

I have a strange feeling they wont lift the melt ban

[Corsair]

If you are going to hold cash, why not US nickels, easy to obtain and no work involved. As an investment, pennies make more sense. 2.5-3.0 cents of value for 1 cent cost but time and expense to sort. Am Canadian and no longer buy nickels to sort for .999. I buy copper instead. With recent discussions about eliminating the penny in Canada it will only be a matter of time before the melt ban will disappear and the extra value in the metal can be realized.

If that cash is absolutely unnecessary to you in every sense of the word, then US nickels could be considered. But there is so much more that cash could be doing for you than sitting in 25% nickel and waiting and waiting and waiting...

[TXBullion]

I have a strange feeling they wont lift the melt ban

Maybe you could make this a new topic. Any reason behind it, it sounds like a good topic to me at least

[pennypinch]

i am curious to know hot it happened with silver... did they actually lift the melt ban? it seems to me like it would make no difference to them to lift it or not. I dont see them getting any benefit from lifting it.. personally, i like the melt ban. If there was no melt ban then the pennies wouldnt be in circulation anymore.

[whatsnext]

If you pick copper pennies and nickles out of the wild with little time/money investment more power to you. I cant see myself holding nickles, they just do not look like the best/most profitible time/money endeavour that could be accomplished. I just check my change and others when i get a chance.

Buying coppers is the same problem for me. It could pay off one day but you wouldnt even make the total above face b/c you dont get full copper when/if you sold it(when/if it is legal) and you payed above face to begin with if bought from a sorter. Wheres the profit in that

Always look for a better investment do not get tunnel vision on metals your not even sure you can cash out for what you put into it.

[Corsair]

If you pick copper pennies and nickles out of the wild with little time/money investment more power to you. I cant see myself holding nickles, they just do not look like the best/most profitible time/money endeavour that could be accomplished. I just check my change and others when i get a chance.

Buying coppers is the same problem for me. It could pay off one day but you wouldnt even make the total above face b/c you dont get full copper when/if you sold it(when/if it is legal) and you payed above face to begin with if bought from a sorter. Wheres the profit in that

Always look for a better investment do not get tunnel vision on metals your not even sure you can cash out for what you put into it.

In an absolute worst-case scenario, I know for a fact that my investment in pennies will never be worth any less than what I payed for them, since I have been pulling them for face. Already they are selling at almost a 50% premium to face, and they aren't even rare yet! Even if, once the melt ban is lifted, a seller can't get 100% of the price of copper for their pennies, they will already be doubling their money, at least. With copper spot at $4.25, that puts the value of a copper penny at 2.85x face. So if copper continues to go up, which I think it will, by the time the melt ban is lifted, who cares if you don't get the full value for your cents? You'll still make a heck of a lot, as long as you have a lot invested.