Thursday, April 26, 2007

The Hyperinflation of the U.S. Dollar

Hyperinflation happens when inflation is out of control. In this scenario, prices raise rapidly because currency is losing its value. The U.S. dollar is getting dangerously close to a hyperinflation state. It is becoming less and less stable every day. In 1913, you could buy the same for $.04 that you can now buy for $1.00. This means that the U.S. dollar has lost 96% of its value in less than 100 years. Even if it only follows that same rate, by 2100 it will cost $25 to buy what we can buy for $1.00 now. The scary thing about this is, it is not following that same rate, the value of the U.S. dollar is beginning to drop more and more rapidly. For this reason, hoarding metals with actual face value is a very safe way to make sure your investment will always be worth something. Right now, you can instantly double the value your investment with pre-1882 copper cents and nickels. I believe a market will develop for these metals within the next two years or so. Hoard now, while you still can.

Running Totals:
Copper Cents: 2650
Nickels: 1000

Face Value: $76.50
Metal Value: $155.55

Tuesday, April 24, 2007

Zinc Keeps Climbing

The price of zinc keeps climbing, meaning that if it keeps up this same trend, soon every penny in circulation will be worth more than face value. The total melt value of a zinc (post-1982) penny today was $.009586, just shy of face value. If zincs become worth more than face value and keep climbing like the coppers did, I think the US Treasury is going to have to do something about it, they cannot keep producing pennies at a loss. I see them either changing the composition of the penny to steel or completely doing away with it. Remember, a copper penny became worth more than face value only 2 years ago.

Running Totals:
Copper Cents: 2650
Nickels: 1000

Face Value: $76.50
Metal Value: $158.77

Wednesday, April 18, 2007

Hoarding Nickels

If sorting through rolls and rolls of pennies is just not your thing, then you may choose to hoard nickels. I actually do both. The composition of the common nickel is 75% copper and 25% nickel. The price of copper alone is enough to make a nickel worth more than its face value but the price of nickel is increasing too. You do not have to do any sorting with nickels since they have held that composition since 1947, though you may want to sort through to look for older nickels. I do both nickels and pennies to have diversity with my hoard but this is entirely up to you.
------------------------

Running Totals:
Copper Cents: 2200
Nickels: 800

Face Value: $62.00
Metal Value: $130.39

Tuesday, April 17, 2007

What You Should Be Hoarding

For those of you who may just be getting started with your hoarding, this post will inform you of what coins you should be hoarding. For pennies, you should be keeping all of the pre-1982 cents. These cents are composed of 95% copper and 5% zinc. In 1982 the mint changed the composition to 97.5% zinc and 2.5% copper. There were, however, copper cents minted in 1982. I would recommend that you save all 1982 cents and buy a scale as the copper cents weigh 3.11 grams and the zinc cents weigh 2.5 grams. Anything after 1982 you can roll back up and take back to the bank for money to buy more cents to sort through. You may also wish to save the zinc cents as well since the price of zinc seems to keep rising and the value of the metal content of the zinc cents seems to be getting close to the face value of the cent. I would recommend returning them for more cents to sort through for now though, there will be plenty of zinc cents around should the value of the metal content ever become greater than the face value of the coin.

It is also important that you sort out any wheat cent that you may find within your copper cents. The reason for this is the collector value of the wheat cent is much greater than the value of the metal content. Wheat cents are generally worth about 8-10 cents each, which is significantly more than the value of the metal content. I will explain about hoarding nickels in my next post.

running total: 2200 copper cents

Re-instatement of the Melting Ban

The ban on melting cents and nickles was re-instated today after it was briefly expired. The ban originally went into effect on December 14, 2006 and expired on April 14, 2007. It is now re-instated indefinately. It looks like we will have to stick to just hoarding copper for now. I'm sure there will still be some people melting it and some places that will take the melted copper which will end up making the copper cents more scarce in the long run. The price of copper closed at $2.5221 a pound Monday and the price of nickel closed at $22.9272. This means $1 face value of copper cents is now worth $2.35 and $1 face value of nickels is now worth $1.85.

Running Total: 2000 copper cents