Many of you have seen the commercials. You can't turn on a TV set these days without seeing a "buy gold" commercial. With gold at $1100 per oz this may not be a viable option for many to consider in these troubling economic times. There is one type of US currency that is at the time of this writing (26DEC09) worth the same in melt value as face value and that currency is the US nickel. If you were to point your browser to Coinflation, you would see a list of all the coins in circulation and their relative melt values. This may be a wake-up call to some of you. The US nickel is actually a viable way to store wealth on a smaller scale ($100s, not $1,000). $100 in nickels is a little smaller than a loaf of bread so storing a large amount would take up considerable space.
Lets look at possible situations in which owning some nickels would pay off:
- Bank Run: If there is a run on the banks you
maywill not have access to your money. If you have stockpiled tangible goods and commodities you can still use those for barter and trade. The nickel would be a recognizable currency and it's content would be widely known to those living in economic collapse.
- Hyperinflation: Paper money would quickly devolve into worthlessness, a la Weimar Republic or Zimbabwe. Your nickels could go exponential in value (not as likely as a bank run, but you never know).
- The Federal Reserve begins to realize that it costs more to make a nickel than the nickel is worth and they take the current nickel (75% copper and 25% nickel) out of circulation. They would then replace the old nickel with a new, worthless plastic or silver flashed steel nickel. Gresham's Law would take effect (bad money drives out good money) and those that had stockpiled the good nickels would profit greatly from their foresight.
To read another article on the subject of stockpiling nickels, I encourage you to point your browser to survivalblog.com. It is an invaluable resource. Donate if you can as it is worth it. In closing, it may not be a bad idea to acquire some nickels and save them somewhere for a rainy day, Zimbabwe style.