John T Reed on Nickels & Kyle Bass $1 Million Purchase

[camtender]

It's hard to follow his thoughts on nickels, but good short read,

http://www.johntreed.com/U.S.-nickel-co ... -gold.html

[Slaphot]

Thanks for posting, saving nickels is a win win!

[mtalbot_ca]

+1 and true on all coins with a current base metal content over its face value. The only difference is that the US nickel is the last (Canadian and Mexico) coin that is still produced and meet this criteria.

[68Camaro]

Primary utility of gold is its relative portability, combined with scarcity and desirability. If portability isn't a criterion, nor storage space, then any non-perishable commodity will do.

[TXBullion]

I read that book and made a post referencing it about around 9 months ago. John reed does a lot of writing about real estate

[angel2004]

Nickels are our last 'real' money that is currently minted. They are worth keeping.

[angel2004]

There are other good articles on nickels, one is on survivalblog and Lew Rockwell as well.

[Lemon Thrower]

i am very familiar with Reed. He has some interesting, non-mainstream ideas in a number of fields. However, the guy is very defensive and egotistical and not willing to defend his ideas.

in the essay above, he ignores the fact that gold and silver are monetary metals. this is why most commodities have increased at around the price of inflation, while gold and silver have increased by about 6X since 2000. unlike other commodities, they are uniquely suited for use as money, and have a long 5000 year history of use as money by humans.

if you need further evidence of his flawed reasoning, just look at how another commodity - copper - has performed.

[angel2004]

While he may ignore silver and gold I think the main point is that nickels etc are purchased at face. No loss factor unless you go into if you put the $$ someplace else.

[Lemon Thrower]

choosing one opportunity usually means you forego a different opportunity.

he suggests nickels are better than gold and silver. in most regards, that is not accurate. just look at the last 13 years for your proof.

[angel2004]

Maybe his suggestion but we know that they are real $$ gold and silver there can be a down side. I'm not saying no gold silver but nickels are worth keeping. If you have cash. Have some in nickels or at least hold them. That's all. 13 yrs ago who knew for sure about gold and silver but a nickel is a nickel.

[Lemon Thrower]

well his view is gold and silver are just commodities, like nickel. that is false. they are money, nickel isn't nor is wheat, pork bellies, etc.

[angel2004]

Nickel is because we made it money. And it really, aside from older pennies and of course silver coins, the only real money now in circulation. I understand the concept because as a very young child we saved all the wheat pennies as well as the silver coins as the 1960s progressed. Nickels are true content / worth money currently. That's all. No negative on PM, just a fact. They may or may not ever be used like the silver dimes/quarters/ halves but might be. In my opinion, if you're keeping some cash they might well be nickels. Can be either spent as cash or traded like silver coins are if inflations spirals. Just a safety net for some cash kept on hand anyway. Can make a collector book if you go through them. Nickels really on the only coin that hasn't been searched through as much as pennies, dimes, quarters or halves. There are stray silver nickels as well, usually 1 or 2 per $100 box.

[scyther]

Kind of an interesting article, but he takes a long time to make some really obvious points. Face value is assured; metal value is a hedge against inflation. Gold doesn't have that dual protection. Got it.

You can still lose with nickels in real terms though, since it's not guaranteed that nickel and copper will go up along with general inflation, and they would have to stop making them in the present alloy, at the very least, for them to be worth anything over face. Probably we would have to wait for them to disappear from circulation, or rather get down to about 5-10%. that could happen very quickly with severe/hyperinflation, but barring that, it won't happen any time soon, considering how many copper pennies are still available 30 years later.

I think stacking some nickels is a good, basically risk-free idea if you're holding cash anyway, but if you want to profit from base metal coins, I think copper's the way to go.

The idea of windfall profits tax is sickening I highly doubt a new gold standard will happen, but, just... ugh.

Lol if it's true that Kyle Bass got all those nickels for face value without so much as a delivery charge, he has an awesome bank. He must have a lot of bank in that bank

[scyther]

choosing one opportunity usually means you forego a different opportunity.

he suggests nickels are better than gold and silver. in most regards, that is not accurate. just look at the last 13 years for your proof.

That's not proof. The fact that gold and silver have already increased dramatically in price is not proof that they will keep going up more- it's reason to think they won't. When silver was $4 an ounce, a 1,000% increase in value was possible, and it happened, temporarily.. Can it go up in value 1,000% from its current price? I very highly doubt it.

When silver was $4 an ounce, could it have lost 80% of its value? No. Could it now? I think its unlikely, but its possible given where it is now and where it was 10 years ago.

The higher you buy, the less likely you are to profit.

[angel2004]

Kind of an interesting article, but he takes a long time to make some really obvious points. Face value is assured; metal value is a hedge against inflation. Gold doesn't have that dual protection. Got it.

You can still lose with nickels in real terms though, since it's not guaranteed that nickel and copper will go up along with general inflation, and they would have to stop making them in the present alloy, at the very least, for them to be worth anything over face. Probably we would have to wait for them to disappear from circulation, or rather get down to about 5-10%. that could happen very quickly with severe/hyperinflation, but barring that, it won't happen any time soon, considering how many copper pennies are still available 30 years later.

I think stacking some nickels is a good, basically risk-free idea if you're holding cash anyway, but if you want to profit from base metal coins, I think copper's the way to go.

The idea of windfall profits tax is sickening I highly doubt a new gold standard will happen, but, just... ugh.

Lol if it's true that Kyle Bass got all those nickels for face value without so much as a delivery charge, he has an awesome bank. He must have a lot of bank in that bank

Yes, copper is probably a better route, and in pre 1982 pennies you can get it now with copper low for half price. The pennies are just more of a pain with searching and weight alone. Nickels are cumbersome, but no searching - at least not yet. I do keep the pre 1982 pennies in a container as well. I don't look to saving nickels as a way to profit, I just know it's real money with intrinsic value. Survivalblog has a good nickel article if you get a chance to read.

[Lemon Thrower]

choosing one opportunity usually means you forego a different opportunity.

he suggests nickels are better than gold and silver. in most regards, that is not accurate. just look at the last 13 years for your proof.

That's not proof. The fact that gold and silver have already increased dramatically in price is not proof that they will keep going up more- it's reason to think they won't. When silver was $4 an ounce, a 1,000% increase in value was possible, and it happened, temporarily.. Can it go up in value 1,000% from its current price? I very highly doubt it.

When silver was $4 an ounce, could it have lost 80% of its value? No. Could it now? I think its unlikely, but its possible given where it is now and where it was 10 years ago.

The higher you buy, the less likely you are to profit.

fair point, but the point i was making was that he was wrong when he said any commodity is a better inflation hedge than gold and silver. he was wrong the last 13 years. he's only right for very brief periods of time. even with the 25% correction gold is above nickels.

also, if you look at the 70s as a guide, gold and silver each increased about 25-30 times. if they have gone up 6 times now, then they can still quadruple from here based on the 70s.

[Klark Cent]

There are other good articles on nickels, one is on survivalblog and Lew Rockwell as well.

this one?

http://www.lewrockwell.com/orig10/rawles1.1.1.html

[ZenOps]

The truest test of any physical item deemed as "money" is simply to see what ordinary people accept more of.

Go into the streets and offer to give away a silver eagle or four quarters, and you may find people preferring the cupronickel.

Older people may recognize and prefer the eagle, but the younger ones recognize nickel as being of worth.

[ZenOps]

Nickel is also a currency. It circulates in the current timeframe by the majority as money. A cotton bill is also currency, but without intrinsic value.

Arguably, gold is not a currency to most Americans. In that respect, nickel and copper are higher value than gold.

[angel2004]

There are other good articles on nickels, one is on survivalblog and Lew Rockwell as well.

this one?

http://www.lewrockwell.com/orig10/rawles1.1.1.html

Yes, but there is an updated form on survivalblog, and another on storing and acquiring on Rockwell's site.

[angel2004]

The truest test of any physical item deemed as "money" is simply to see what ordinary people accept more of.

Go into the streets and offer to give away a silver eagle or four quarters, and you may find people preferring the cupronickel.

Older people may recognize and prefer the eagle, but the younger ones recognize nickel as being of worth.

Yes, we have to educate the younger ones! My son and daughter are as well as the little grandchildren. He is taught the medical benefits now as well as knowing that he gets a big 'silver quarter' for his Christmas gift now. Only has 1 but the little ones can surely learn. I have heard that some collectors for roll searching have received ASE as a dollar coin from tellers! I learned about silver's intrinsic value at a very young age during the 1960s by keeping those coins as well as wheat pennies!

[angel2004]

Nickel is also a currency. It circulates in the current timeframe by the majority as money. A cotton bill is also currency, but without intrinsic value.

Arguably, gold is not a currency to most Americans. In that respect, nickel and copper are higher value than gold.

Yes and the reason to prefer 20 nickels to a dollar bill!

[ToothDoc]

Angel, I could not agree with you more. We do need to educate the "younger ones". Young people today have no real concept of what has "real" value, unless they were taught. We as a people need to better educate them. Gold, Silver, Copper, Nickel, or even scrap metal all have more value than a piece of dyed cotton. Teach the children well.

[Lemon Thrower]

The truest test of any physical item deemed as "money" is simply to see what ordinary people accept more of.

Go into the streets and offer to give away a silver eagle or four quarters, and you may find people preferring the cupronickel.

Older people may recognize and prefer the eagle, but the younger ones recognize nickel as being of worth.

you are confusing money with currency. go to the grocery store with a gold eagle and an equivalent value in FRNs - which one will the grocery store preref? does that mean FRNs are money? No, they are currency. they are not a store of value (or a poor one anyway). Currency is a money substitute. it is used because it performs some functions of money better, but does not perform all of them better. For example, its more convenient to have divisible paper money than gold coins. but paper money has no intrinsic value and therefore is not a good store of value.