Value of nickels in a troubled economy?

[Tommybee]

I'm a nickel stacker. I like the fact that the metal value of nickels exceeds the face value. They are honest money. I also have some PM's and other base metals like copper cents.

Base metals like copper and nickel are industrial metals. If we experience an even worse economic downturn, will the price of industrial metals plummet because there is no demand for them by industry?

In a hyperinflationary scenario I think nickel hoarders do well. In a deflationary scenario I think, worst case, nickels are worth face value...unless they have been demonetized by the government.

Do you guys have any opinions regarding the up/down sides and/or benefits/risks associated with nickel stacking?

[Know Common Cents]

Upside potential is far greater than leaving one's funds in a bank to earn 0.01%. The metallic composition of our current nix will change within the next 12-24 months and they'll begin their disappearance from circulation. That would be Gresham's Law, I believe.

Stackers are just ahead of their time. That's good. What else can you buy 20 for $1 that has a true value?

[shinnosuke]

The risks of nickel stacking by Funk & Wagnalls
1. Your $100 box is just sitting there earning no interest.
2. Your $100 is just sitting there and not being used to purchase another item, any item, which could be sold for a profit.
3. When the current nickel is replaced by something of lesser value, the melt ban will be lifted and many hoarders will rush to cash in, driving prices down. (How far down cannot be forecasted accurately at this time.) Waiting for the price of nickel to rise again before selling the $100 box is a risk similar to numbers 1 & 2 above.
4. In a moment of reckless abandon, while enjoying your favorite adult beverage at your favorite watering hole, you tell the cute, young thing next to you that you have more nickels than common sense. When you go to the bathroom, she tells Bruno, who has been watching his girlfriend get friendly with you while comfortably seated over there in the dark corner booth. You go home that night unwaware that Bruno and the aforementioned cute young thing are following you. Next day, while at work, your Chihuahua fails to stop Bruno from relieving you of your stash. Although your hidden theft prevention camera captures several clear images of Bruno, the local constabulary quickly slip the file into the unsolvable drawer because the chief recognizes his low-life brother-in-law and remembers the tail-chewing he got from his older sister the last time he tried arresting Bruno.

[Johnny99]

In a hyperinflationary scenario I think nickel hoarders do well. In a deflationary scenario I think, worst case, nickels are worth face value...unless they have been demonetized by the government.

Do you guys have any opinions regarding the up/down sides and/or benefits/risks associated with nickel stacking?

If there is a deflationary scenario, why would the government demonetize nickels? If the cost of copper/nickel collapsed, they would earn seigniorage again.

The only downside I see is opportunity cost: money not earned while you're waiting around for the actual price to be realized. But it's an option on base metals with a non-expiring put at 5 cents.

[slvrbck]

I currently have "enough" silver, "enough" gold, "enough" platinum, and plenty of pennies. I own my home, own my car, have some money forced into riding the stock market, and have a decent bit sitting in the bank. I'm buying nickels like the government is going to shut down tomorrow. . .

[shinnosuke]

I currently have "enough" silver, "enough" gold, "enough" platinum, and plenty of pennies. I own my home, own my car, have some money forced into riding the stock market, and have a decent bit sitting in the bank. I'm buying nickels like the government is going to shut down tomorrow. . .

Food?
Garden?
Metallic objects which go bang?

[slvrbck]

covered. . . metallic and several plastic objects that go bang. Water, food. I even got this neat curved peice of metal w/ a string that manages to fling these carbon rods and overflow my freezer every year.

[slvrbck]

cant seem to get enough nickels though, the gettin is getting tough.

[Mossy]

... and have a decent bit sitting in the bank.

I've some still in the bank for liquidity, but moving as much as possible into metal. The bank is just too vulnerable, and inflation on top of that? No thanks.

[shinnosuke]

cant seem to get enough nickels though, the gettin is getting tough.

Not sure the volumes your speaking of, but how about hitting every branch of your bank in town? Small town? Then find a reason to go to the big city and hit a bunch of branches.

[mtalbot_ca]

A troubled economy means (for me) that you start with an inflation then an hyperinflation situation. Hoarding nickels as bullion, would be a good diversification, along with copper, silver and if you can afford it gold, to protect your purchasing power. Hyperinflation by definition would indicate that people are in a frenzy to spend their money for goods that tomorrow will costs more and the government, in an attempt to get the economy going, would borrow to balance its budget. So initially, you keep your nickels to protect your ability to get useful goods, then the tactic is to get those goods, which will help you earn a living, because chances are you will have lost your day job.

Cheers,

[schockergd]

Simple , look at what happened in Yugoslavia , Zimbabwe , Argentina and Wermarcht Germany during periods of hyperinflation.

What happened to those who held silver, gold and even copper currency?

What happened to those who held paper currency?

Do the little bit of research required and you'll have your answer!