Arguments

[balz]

What do you think about this: http://www.survivalistboards.com/showth ... 297&page=1

It seems a lot of people think this is plain stupid.

What about their argument about the gas needed to go at some place where they could smelt the pennies? And what about the energy taken to do it... if and only if they lift the ban!

I'd like to read some other points of view!

[SoFa]

You always have to consider the costs whether you are collecting scrap copper pipe or copper cents. If there are no scrap yards near you, you might want to consider the cost of hauling a ton of coins somewhere else. Or factor in the cost of shipping them (assuming the post office will be raising rates).

As far as the energy to melt them, that's what the scrap yard and refiners are for (they consider it when they set the price for scrap copper).

A shtf scenario is not necessarily the best argument for hoarding copper.

[balz]

What about using those pennies as a currency in the future, when hyperinflation hits? I mean: it's clear that it won't be easy to haul tons of pennies; but what about using them to actually buy things? Any chance this may happen?

[SoFa]

I don't know. I figure they'll be worth whatever copper goes for in the future. If there's hyperinflation I'm assuming everything cost more, so you wouldn't go wrong holding most commodities.To me, hoarding copper cents is more about diversifying.

[balz]

I'm having second-thoughts now. It takes a lot of time to sort pennies and I'm not sure what will happen. What if they don't lift the ban? What if copper prices plummet because of economic failure?... Would'nt it be easier to just buy silver?

[Coppercrazy]

I like the fact you can easily accumulate,at any level,big time or small time,copper cents at less than the metals value.I hand sort with my kids.I have no intention of selling copper cents at this time-I see you can profit at todays price level,but not that much.I believe we will see 6.00 to 8.00 copper in the coming years...as for lifting the melt ban-just look at U.S. silver coins-at first,they couldnt be melted because that would have caused a shortage of coins.Eventually the ban was lifted.With the cent you have an ever growing amount of zinc cents in circulation,as well as a low denomination coin that many businesses are avoiding altogether...its only a matter of time before the ban is lifted. this will bring the going price of copper cents closer to melt value in the open market.I guess you could say im "long" copper cents. I think in the future,when copper is higher,there will be buyers who have ryedales set up to receive and count the coin and pay out at whatever percent of melt they think is profitable...I dont ever picture bringing cents into a scrap yard-thats for wire,ACs... scrap metal.Not penny bullion.Just hang on and hoard-dont worry about selling.Just my 2 cents.Oh yeah buy silver too.Buy silver and hoard copper.Even in small increments.It adds up.

[balz]

Thanks for the insight...

But what about the selling point.

I mean: in every investment there are 3 parts:

1) Buying
2) Waiting
3) Selling

The first two are clear to me but if you don't see yourself selling pennies at a scrap yard after the ban is hypothetically lifted (and I'd like to learn more about why they lifted the silver ban; I mean there must be a reason they felt like doing it), then what do we do with all this copper?

I accumulate copper pennies. Over 300 pounds now. But maybe I am missing the point but I think some people have an argument when they say that an economic failure would cause copper price to plummet because 80% of copper comes from recycling and people may use copper in their t.v. and appliances, etc.

What do you think about this?

Thanks

[Bartender]

I like the fact you can easily accumulate,at any level,big time or small time,copper cents at less than the metals value.I hand sort with my kids.I have no intention of selling copper cents at this time-I see you can profit at todays price level,but not that much.I believe we will see 6.00 to 8.00 copper in the coming years...as for lifting the melt ban-just look at U.S. silver coins-at first,they couldnt be melted because that would have caused a shortage of coins.Eventually the ban was lifted.With the cent you have an ever growing amount of zinc cents in circulation,as well as a low denomination coin that many businesses are avoiding altogether...its only a matter of time before the ban is lifted. this will bring the going price of copper cents closer to melt value in the open market.I guess you could say im "long" copper cents. I think in the future,when copper is higher,there will be buyers who have ryedales set up to receive and count the coin and pay out at whatever percent of melt they think is profitable...I dont ever picture bringing cents into a scrap yard-thats for wire,ACs... scrap metal.Not penny bullion.Just hang on and hoard-dont worry about selling.Just my 2 cents.Oh yeah buy silver too.Buy silver and hoard copper.Even in small increments.It adds up.

Couldn't have expressed my thoughts any better! I'm unsure of how many silver coins were actually melted down, especially by individual holders, but I don't think that will happen with Cu coins. The price will rise and those who made the effort will be rewarded one way or the other for getting rid of FRN's. Whether it be by a strong buyer market, revaluation of the dollar (i.e., dropping a zero), or whatever else may come.

[HoardCopperByTheTon]

Thanks for the insight...

But what about the selling point.

I mean: in every investment there are 3 parts:

1) Buying
2) Waiting
3) Selling

The first two are clear to me but if you don't see yourself selling pennies at a scrap yard after the ban is hypothetically lifted (and I'd like to learn more about why they lifted the silver ban; I mean there must be a reason they felt like doing it), then what do we do with all this copper?

I accumulate copper pennies. Over 300 pounds now. But maybe I am missing the point but I think some people have an argument when they say that an economic failure would cause copper price to plummet because 80% of copper comes from recycling and people may use copper in their t.v. and appliances, etc.

What do you think about this?

Thanks

Or there could be a flare from the sun and none of it will matter anyway. You are right.. you should quit now. Just send you pennies to me.

The one biggest factor you left out on investments is "risk."

[mtalbot_ca]

Hi there,

My argument is fairly simple. Just like with any non-renewable natural resources, copper supply cannot be forever. Therefore, I hoard pennies, for my children, or grand children or grand-grand children. I hope that I will be able to leave a ''copper estate'' which has the potential to serve them well if something bad (economic or social) happens in their future. As my economic situation improves, I hope to be able to do the same with silver and gold.

Bye,

[biglouddrunk]

No doubt if the shtf the price of copper will plummet. However the best case for us is the US has gradual inflation, copper increases in value faster than other metal maybe because of renewable energy projects or something, and the penny is discontinued paving the way for scrap yards buying them.

[balz]

No doubt if the shtf the price of copper will plummet. However the best case for us is the US has gradual inflation, copper increases in value faster than other metal maybe because of renewable energy projects or something, and the penny is discontinued paving the way for scrap yards buying them.

That's my fear... On one side we have inflation, which is good for copper. On the other side, we have economie failure, which is bad for copper. On one side we have gold, which is good for both situations. On the other side we have copper, which can be bought for 35% of its price by buying pennies today.

I don't know what to do. Sometimes I believe I'd be better simply buying silver or gold and not wasting hours every week sorting copper... not talking about finding copper sources.

[csb3tennessee]

Hi there,

My argument is fairly simple. Just like with any non-renewable natural resources, copper supply cannot be forever. Therefore, I hoard pennies, for my children, or grand children or grand-grand children. I hope that I will be able to leave a ''copper estate'' which has the potential to serve them well if something bad (economic or social) happens in their future. As my economic situation improves, I hope to be able to do the same with silver and gold.

Bye,

I agree- I'm really not in this for myself (other than the relaxation it provides). This is for my kids and their kids. As I once stated- once this becomes work for me- I quit. For the time being, it is a fun and relaxing hobby, with VERY LITTLE downside risk, and a big potential for gain. But that gain may take awhile- and that will require patience.

[balz]

Correct me if I'm wrong but 80% of cupper actually comes from recycled copper. Am I right?

[Common Cents]

Those of you that are hung up on the lifting of the melt ban are completely missing the point of holding the cents. Why on earth melt them? They are money. Sound money. They will make excellent trade units in the future. Their copper content has been assayed by the mint, and their value will always be linked to the price of copper. They will hold their value as the dollar continues to lose value against commodities. That is how money is supposed to act over the long run, it should retain its value. Some day you'll be able to walk into a coin shop and receive multiples of face value for your pennies, just like you can with with 90% silver coins. When copper is selling for $10+ per pound, the world will be looking at these little round copper coins from a completely different perspective. When public confidence in the ability of the dollar to act as a store of value has been shattered, people will start to clamor for money that does hold its value. You'll see.

[Thogey]

Those of you that are hung up on the lifting of the melt ban are completely missing the point of holding the cents. Why on earth melt them? They are money. Sound money. They will make excellent trade units in the future. Their copper content has been assayed by the mint, and their value will always be linked to the price of copper. They will hold their value as the dollar continues to lose value against commodities. That is how money is supposed to act over the long run, it should retain its value. Some day you'll be able to walk into a coin shop and receive multiples of face value for your pennies, just like you can with with 90% silver coins. When copper is selling for $10+ per pound, the world will be looking at these little round copper coins from a completely different perspective. When public confidence in the ability of the dollar to act as a store of value has been shattered, people will start to clamor for money that does hold its value. You'll see.

Good point.

But the reality is, unless you CAN melt them, the assay values are meaningless. Like food you can't eat, or a supermodel, whose face you can't lick. It's an illusion.

I wouldn't want to melt them either. They are prefect 1/10 Toz chips.

But the market demand will be driven by someone who will melt them.

[biglouddrunk]

That's my fear... On one side we have inflation, which is good for copper. On the other side, we have economie failure, which is bad for copper. On one side we have gold, which is good for both situations. On the other side we have copper, which can be bought for 35% of its price by buying pennies today.

I don't know what to do. Sometimes I believe I'd be better simply buying silver or gold and not wasting hours every week sorting copper... not talking about finding copper sources.

I'm not sure what you value your sorting time at but I hoard copper for the reason you mentioned above you're getting it at a 65% discount. The second reason is more crystal ball than anything, but what seems to me to be the most likely scenario for the future is something between the shtf and everything remains fine. As the future goes on the US will continue deficits yet will not have the political will power to cut spending and raise taxes. Thus down the road they will get to a point where paying off the debt will become impossible so they will print money or raise the prime interest rates creating inflation thus discounting there debt so to speak. So we might see some 70's style inflation which is good for commodities. Yes this might cause a recession or depression, but even if copper is cut in half vs. the value of gold or silver still we are buying it at a 65% discount.

[CoolRide]

I just started doing it for fun. I have nothing else to do with my time and thats about all it costs me. I can go to the bank with $25 (which was given to me for this purpose) and when I go back to the bank, I only have to ad a few bucks to get another $25 box of pennies. So It's the worlds cheapest hobby as far as I can tell.
I know from 25 years of hot rodding I can't spend $25 for something and get $25 back for it (or close.) In fact it COSTS MORE to build then to buy already built. Hell a full tank of good fuel (which will NOT last long) will be $300
25 years of flying rc planes and helies? Thousands and thousands of dollars of broken parts all over the fields and I still have a few boxes full that I could not sell for pennies on the dollar invested.

Four wheeling? Don't even need to say another thing.
Flying full size? See above.
Had a couple of Harley's, Pretty cheap to own and operate,(after initial purchase) but when you live in a part of the country where you can only ride for 3 months of the year?

Sorry to blather on so, I don't know what I am going to do with all my "free" pennies, but I NEVER have had a problem finding a way of getting rid of money in the past, so I really don't look at it as a problem.

To me it's really just saving money the in-efficient way. Hey I like that, maybe I'll use it as my sig. Hehehehe
Sammy

[Common Cents]

Those of you that are hung up on the lifting of the melt ban are completely missing the point of holding the cents. Why on earth melt them? They are money. Sound money. They will make excellent trade units in the future. Their copper content has been assayed by the mint, and their value will always be linked to the price of copper. They will hold their value as the dollar continues to lose value against commodities. That is how money is supposed to act over the long run, it should retain its value. Some day you'll be able to walk into a coin shop and receive multiples of face value for your pennies, just like you can with with 90% silver coins. When copper is selling for $10+ per pound, the world will be looking at these little round copper coins from a completely different perspective. When public confidence in the ability of the dollar to act as a store of value has been shattered, people will start to clamor for money that does hold its value. You'll see.

Good point.

But the reality is, unless you CAN melt them, the assay values are meaningless. Like food you can't eat, or a supermodel, whose face you can't lick. It's an illusion.

I wouldn't want to melt them either. They are prefect 1/10 Toz chips.

But the market demand will be driven by someone who will melt them.

I disagree. If there is increased demand for sound money to use as trading chips to facilitate commerce, then it makes more sense to trade them as is, then it does to melt them down. There are plenty of other forms of scrap copper to feed the industrial demand, but you're not going to cut off a piece of a copper pipe and bring it to a store for trade. Whereas a roll of 50 copper pennies is a completely different story. You'll see. Wait until most people are priced out of the silver market when it's over $100 an ounce, and copper is trading at around 10-15 dollars per pound.

[balz]

Thanks for the interesting arguments. This is EXACTLY what I had in mind when I started this thread. I want to read the two sides of the medal, and you guys are great!

If I could add something to what Common Cents said, here it is: I agree that Cu cents can be used for trading purpose, but I wonder if there aren't simply too much of those cents in circulation for that. I mean: we all agree that Ag and Au are very rare and this is why they have so much value, but Cu cents are everywhere, billions and billions and billions of cents... even 30 years after Cu was replaced by Zinc someone in the USA can get about 25% of pre-82 cents...

What do you think about this? Any chance there are two many cents in circulation to make those cents a trading unit?

And what about melting existing copper to make more of those cents? I belive copper is like 8th most present mineral in the Earth's crust...

[silverflake]

There's another point to copper. If you read about the history of money (not necessarily barter -but money) there's always been a 3 tier acceptance of real money (not paper). Those tiers are and have been, gold, silver and copper. The old story, as I've read, is that you used your gold to buy your land, your silver to buy your horse and your copper for everyday transactions (your tools, food etc). So copper will always have a part to play in a money system that has integrity. The psyche of human beings trusts metal more than paper. Interesting question for you folks though - prior to the last 80 years, gold has been valued at roughly 15-16 times the value of silver for upwards of 5000 years. I think it was based on the perceived amount mined out of the ground - miners got 15 times more silver than gold. Is there any information on a gold to copper ratio? Or even a silver/copper ratio? Thoughts?

[balz]

There's another point to copper. If you read about the history of money (not necessarily barter -but money) there's always been a 3 tier acceptance of real money (not paper). Those tiers are and have been, gold, silver and copper. The old story, as I've read, is that you used your gold to buy your land, your silver to buy your horse and your copper for everyday transactions (your tools, food etc). So copper will always have a part to play in a money system that has integrity. The psyche of human beings trusts metal more than paper. Interesting question for you folks though - prior to the last 80 years, gold has been valued at roughly 15-16 times the value of silver for upwards of 5000 years. I think it was based on the perceived amount mined out of the ground - miners got 15 times more silver than gold. Is there any information on a gold to copper ratio? Or even a silver/copper ratio? Thoughts?

+1

I'd really like to get an historical copper/gold ratio.

My only concern is that nowaday copper get reused so easily, which may not have been the same centuries ago.

[Thogey]

I disagree. If there is increased demand for sound money to use as trading chips to facilitate commerce, then it makes more sense to trade them as is, then it does to melt them down. There are plenty of other forms of scrap copper to feed the industrial demand, but you're not going to cut off a piece of a copper pipe and bring it to a store for trade. Whereas a roll of 50 copper pennies is a completely different story. You'll see. Wait until most people are priced out of the silver market when it's over $100 an ounce, and copper is trading at around 10-15 dollars per pound.

You make a great point, but I don't see what you disagree with.

Let's try this, I concede to everything you wrote.

Given that you are 100% correct and there will be zero demand for copper cents as a bullion product (I think that's what you are saying): Then do you think lifting a melt ban will

A) Result in an increase in the market value of cu cents
B)Result in the decrease in value in cu cents
C)Have no effect on the value of cu cents


And why?

[iluc]

I'll weigh in by saying a melt ban, all else being equal, should have no impact on the price of copper cents. Their worth is based on the value of the constituent metals, just as old silver U.S. coins are priced based on their metal -- maybe someone was around to observe the change in melting restrictions and the impact on what they could be sold for at that time. The only reason copper cents aren't selling for spot now is the relative imbalance between the supply and demand -- something I think we all expect to turn on a dime (pun intended). Although I'd hate to see pennies melted, it would be a convenient way to liquidate a large holding...that very convenience might lead to a lower price point for anyone selling to a smelter. Smelters, after all, have a capital intensive business and can't sell their product for much of a mark-up, so they probably will only pay lower prices, anyhow (just surmising as I don't have direct experience here). On the other hand, maybe the smelters are hurting for easy sources of copper, and lifting the ban would add a new source of demand and help close the gap between face and metal content value.

Yes, there may be lot more units of copper coins, and there may be a lot more of it in the earth's crust, but all that is already accounted for in the lower price per pound (or ounce). And it's going to cost more and more to get it out of the ground and transport it long distances, while Pennies will not cost more to acquire (in expensive "urban mining" in a sense). The relative abundance may mean it's not as "good" a form of money in the sense that it's density of value is less, but it's still pretty darn good, as far as overall qualities for sound money go. If everyone were to use them should dollars become worth less than pennies, a course we are on even without hyperinflation, there wouldn't seem to be as many anymore.

In any case, Penny/Nickel bullion is a fascinating diversifier to gold/silver because its discount to spot should juice future returns, it doesn't have the downside risk because of its face value if the economy falls apart and takes the commodity complex with it (which may well draw down silver and to a lesser extent gold), and it may be the most undervalued asset in the world relative to historical price ratios using gold as a numeraire.

[Lemon Thrower]

not enough people recognize them as money yet, which is why you can buy them for only a modest premium above face value and a substantial discount to melt.

lifting the melt ban would change that.

melt ban will not be lifted until the mint discontinues the penny. that won't happen until inflation is insane and there is no political cost to doing so.

pennies v. nickels - realize that the folks on Rawles' board are comparing nickels to unsorted pennies, not to pure copper rolls. they think its too much work to sort, or don't know that you can buy all the copper cents you want for 1.6X

so comparing cents to nickels is apples and oranges - one you have to sort, one you don't. the potential is bigger with cents but there is a cost - either an out of pocket cost by paying a premium over face to acquire - or a time to sort cost - that cents have that nickels dont have. that said. i would not be surprised to see the composition of both coins changed for 2012 or 2013. may be too late for 2012.