What happens to coins during currency revaluations?

[Recyclersteve]

I read something very thought-provoking recently and wanted to throw this out there for comment. Basically, the author (I think it was a survival blog site) said that frequently when currency is revalued it only affects currency, not coins. In other words, assume we are told that there is a brand new U.S. currency and one new $1 bill will be equal to a current $100 bill effective immediately. So a $100,000 bank account or cash you have on hand as a rainy day slush fund goes down 99% overnight. But this author basically said that often times the government doesn't want to mess around with pocket change (coins). So a single nickel you have in your pocket would be worth $5.00 (or perhaps even $50 if three zeros are dropped from the currency) overnight.

First, can anyone give any information (including links if possible) indicating how this was handled with currency devaluations since perhaps World War II? Any information about what happened in Zimbabwe, Mexico, Argentina or Yugoslavia would be nice.

And what about brokerage accounts where you have stocks, mutual funds, bonds and cash? I assume that the cash would be devalued immediately, but it is hard to imagine Apple stock suddenly being worth only 1/100 what it was yesterday. After all, they're still gonna sell a lot of iPhones.

What comments can anyone share on this matter?

[johnbrickner]

Don't hold the currency when it's being reset. Why we stack other items of value and should start thinking seriously of using often, something other than U$D to make transactions with. Like what the rest of the world is setting it self up to do.

[highroller4321]

Generally from what I have read is the coins become 100% worthless as an monetary exchange. Normally new coins are issued. Mexico is a good example of this.

[neilgin1]

I read something very thought-provoking recently and wanted to throw this out there for comment. Basically, the author (I think it was a survival blog site) said that frequently when currency is revalued it only affects currency, not coins. In other words, assume we are told that there is a brand new U.S. currency and one new $1 bill will be equal to a current $100 bill effective immediately. So a $100,000 bank account or cash you have on hand as a rainy day slush fund goes down 99% overnight. But this author basically said that often times the government doesn't want to mess around with pocket change (coins). So a single nickel you have in your pocket would be worth $5.00 (or perhaps even $50 if three zeros are dropped from the currency) overnight.

First, can anyone give any information (including links if possible) indicating how this was handled with currency devaluations since perhaps World War II? Any information about what happened in Zimbabwe, Mexico, Argentina or Yugoslavia would be nice.

And what about brokerage accounts where you have stocks, mutual funds, bonds and cash? I assume that the cash would be devalued immediately, but it is hard to imagine Apple stock suddenly being worth only 1/100 what it was yesterday. After all, they're still gonna sell a lot of iPhones.

What comments can anyone share on this matter?

look up a blogger FerFal, he's an argentine, who has written extensively what happens during a currency crisis, lives in Ireland now.

that's why I stack "bricks of nick's" as well, 40 $2 rolls of nickels....each role is a metallic two dollar bill.

[theo]

First I think Government/Fed is likely aware of the small but growing subculture that is hoarding coins. So I doubt they will simply allow these coins to be used as "new" currency. I think they would most-likely outlaw coins altogether to prevent these "hoarders" from profiting. Having said that, certain coins (nickels, Cu pennies) would probably retain some black market trade value.

[justoneguy]

Coins will have no value in an EBT only society

[Treetop]

imo any of the potentials others listed above is possible. I wouldnt pick any of them myself and assume it is what will happen here. Of course probably hard to go TO wrong with copper pennies, nickels and to a lesser degree zincs. Even if the coins become worthless, you still have some metal.

[doug]

I am wondering what happens to the prices of products when the revaluation happens and also what happens to a loan. Like if you you owe $100,000 on a loan, does during say a 10 to 1 revaluation is the loan now $10,000?

[coppernickel]

Coins will have no value in an EBT only society

Wow, you are right.

Once the society is "cashless" then it will be really easy to drop zeros to any ability with no protection to the people.

[Z00]

Wont the metal value reflect valuation in the "new" currency value structure?

Also, keep in mind the "Fed" does not control coinage that is still controlled by the Treasury dept.

[cupronickel]

Coins generally disappear In the run-up to hyperinflation as their purchasing power goes to almost 0.
After the zero drop, the coins would be worth either their melt value or their face value (times 100, if 2 zeroes are dropped). $100 bricks of nickels are the easiest and safest way to go .