Heres To You, Thomas Jefferson: Nickel-and-Dimed? Save the Nickels.

In the documentary The American Ruling Class, there is a song that describes the plight of the American worker. It is called “Nickel and Dimed:”

Good advice might be to save the nickels.

This might be a bitter pill to swallow indeed, when rappers like Jay-Z talk of how they spend what most make in a lifetime in a day, but the hoarding of nickels may turn out to be a proven method to preserve one’s buying ability, and here’s why:

As a result of copper prices nearing two year lows, the metal composition of the modern nickel, traded since 1946, is worth less than a nickel.  The current price of copper is $3.26 per pound.  However, as recently as the February 2011, when the price levitated around $4.5 per pound, the copper content in the U.S. nickel was as high as .0733 cents.  The copper chart reflects a commodity feeling the pressure of inflation amid incremental devaluation of mediums of exchange as part of a coordinated central bank policy across the globe. The behavior in the futures pits of commercial hedgers, furthermore, reflects the positions they took at the lows on the chart, in 2009, when their 20k long positions proved to be winning bets as the price climbed hugely.  They are today about just as long as then:

The coinflation has spurred a debate in which participants ponder if modern nickels will one day have their silver moment and contain a base metal content worth twenty times the amount of the face value, as is the case in pre-1964 silver dime is today.  The debate features editor of SurvivalBlog.com on the side of hoarding, and countless others who postulate the bulk is simply not worth the trouble.

But, the assault on paper currencies currently engaged in by central banks is sure to turn fiat currencies up on the endangered species list, and the culminating episode will provide a unique opportunity for patient gatherers of nickels to experience what the hoarders of pre-1964 U.S. coinage did before them. For preppers and survivalists, the coins already make highly convenient trade tools.

After a low brought on by the banking collapse in 2008 brought copper down to $1.5 per pound, the price of copper had gained 300% by February 2011.  For one who makes the precarious decision to hold nickels, in order to realize gains by one who took silver dimes out of circulation at face value before the gutting of the U.S. coinage,  the price of the copper content in nickels must increase by 2,000%. At their current value of $2.00, pre-1964 dimes have seen such an increase since they were traded at face value through the mid-sixties.

Moreover, by 1980, only fifteen years after the coin content was debased of silver, the dimes carried a worth $3.57 as silver was bought-and-sold around $50.00 an ounce.  That’s a 3,570% increase.  This gain was also realized in the spring of 2011 as silver again tested the psychological all-time high; that is, a price meridian non-adjusted for twenty years of inflation.

Based on this, it is perfectly plausible that, as the dollar steadily declines and eventually collapses, the prices in all commodities and resources, including base metals, will go parabolic. Even billionaires are betting on this.  Successful and popular Hedge fund manager Kyle Bass reportedly bought $1 million worth in the familiar and widely available coin just last year.

So, the numbers are not unbelievable. Rather, it is quite likely that the copper content in nickel will increase to an unimaginable degree as monetary policies by elitist technocrats and monetarist fools drives the fiat experiment of the last thirty+ years over a cliff. The base metal content in nickels will give to the exponential growth seen in the silver in the old coinage of the U.S.  And then,  a considerable and prosperous investment in nickel will be contained in more area than a $1,000 bag of junk silver.

But, act quick, as the powers-that-be are hinting that this rare opportunity has got to get taken off the market.