Neat Article on Silver Nickels

[PreservingThePast]

War Nickels Were Made With Silver

I love this statement from the article:

They finally decided to use an alloy of copper, silver and manganese. It may not seem practical today, but in 1942 the silver in the revised nickel was only worth one or two cents.

This statement really caught my attention too:

By the 1960s, wartime five-cent pieces were worth more than face value. Millions were melted, despite the Mint director’s warning the meltings were not in the public interest. In 1966, silver-alloy nickels were worth seven cents. Massive meltings resulted in a severe shortage of five-cent pieces in New England.

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=18883



The above link was found on Coinflation. http://coinflation.com/

[inflationhawk]

Ok, just for fun, let's do some extrapolation and make some assumptions. That silver nickel worth 7 cents in 1966 is now worth roughly $2 today (i.e. 45 years later). So today a CuNi nickel is worth 7 cents, let's say in 45 years each Nickel is worth $2. That would make a $100 box of nickels today worth $4000. But, that $4000 would be in the year 2056 dollars and worth much less. If we calculate what $4000 today was equivalent to in 1966, based on historical CPI data, we come up with $588.49. Source: http://myinflationrate.com/history_of_the_consumer_price_index.php

So, theoretically you can turn $100 into $588 of buying power by just visiting your bank and buying a $100 box of nickels. Granted you won't be able to access that buying power until 2056! But, the grandkids will.

The key assumptions here would be:
1) CuNi will appreciate at the rate silver did over the last 45 years
2) inflation over the next 45 years will be at the same rate as the last 45 years

What this also shows is that the appreciation in silver value has far outpaced the inflation rate of a diversified basket of goods as measured by the CPI.

[shinnosuke]

Ok, just for fun, let's do some extrapolation and make some assumptions. That silver nickel worth 7 cents in 1966 is now worth roughly $2 today (i.e. 45 years later). So today a CuNi nickel is worth 7 cents, let's say in 45 years each Nickel is worth $2. That would make a $100 box of nickels today worth $4000. But, that $4000 would be in the year 2056 dollars and worth much less. If we calculate what $4000 today was equivalent to in 1966, based on historical CPI data, we come up with $588.49. Source: http://myinflationrate.com/history_of_the_consumer_price_index.php

So, theoretically you can turn $100 into $588 of buying power by just visiting your bank and buying a $100 box of nickels. Granted you won't be able to access that buying power until 2056! But, the grandkids will.

The key assumptions here would be:
1) CuNi will appreciate at the rate silver did over the last 45 years
2) inflation over the next 45 years will be at the same rate as the last 45 years

What this also shows is that the appreciation in silver value has far outpaced the inflation rate of a diversified basket of goods as measured by the CPI.

Outstanding analysis. Thanks.

[Pennybug]

Ok, just for fun, let's do some extrapolation and make some assumptions. That silver nickel worth 7 cents in 1966 is now worth roughly $2 today (i.e. 45 years later). So today a CuNi nickel is worth 7 cents, let's say in 45 years each Nickel is worth $2. That would make a $100 box of nickels today worth $4000. But, that $4000 would be in the year 2056 dollars and worth much less. If we calculate what $4000 today was equivalent to in 1966, based on historical CPI data, we come up with $588.49. Source: http://myinflationrate.com/history_of_the_consumer_price_index.php

So, theoretically you can turn $100 into $588 of buying power by just visiting your bank and buying a $100 box of nickels. Granted you won't be able to access that buying power until 2056! But, the grandkids will.

The key assumptions here would be:
1) CuNi will appreciate at the rate silver did over the last 45 years
2) inflation over the next 45 years will be at the same rate as the last 45 years

What this also shows is that the appreciation in silver value has far outpaced the inflation rate of a diversified basket of goods as measured by the CPI.

Outstanding analysis. Thanks.

I second that! VERY GOOD WORK! If ever there was a solid mathematical justification to save nickels... THIS IS IT!

The ONLY REAL problem I see with this analysis (expanding on one of your assumptions) is the ratio of silver to nickel in the earth. Silver after all IS MUCH more rare than Nickel when dealing with elements and also Nickel doesn't posses near as good of valuable qualities as silver (otherwise it would be used in place of silver right now). I see this as being the main driver behind assumption #1 that you mentioned. I do believe that it is possible though that your #2 assumption could grow enough possibly to offset this aspect since in 45 years CuNi coins will most likely be EXCEPTIONALLY rare (after all... there weren't 7 billion people or 300 Million in the US with internet access when the silver went gone! It was SOLELY word of mouth and individual speculation).

[Johnny99]

In 1953, Francis Henning made counterfeit nickels in his New Jersey machine shop.

Now there's a criminal who thinks small!