…Russia supplies more than 20 percent of the world’s high-quality nickel…[but] with Ukraine under siege, however, companies in the West are wary of buying Russian nickel and this has increased demand for nickel from everywhere else, which, in turn, has bumped up its price…and led some Americans to begin hoarding nickels. [Here’s why.]
This version of the original article by Saahil Desai (theatlantic.com) has been edited [ ] and abridged (…) to provide you with a faster and easier read. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
A Single Nickel Is Now Worth Eight Cents
#$$4$ …[While a nickel] is worth just five cents, the metal it contains – 75% copper and 25% nickel – making it worth more than that. According to Coinflation.com, a website that tracks the value of the metals in coins, the “melt value” of a single nickel currently stands at eight cents….Melting down those nickels for profit is illegal, but that hasn’t stopped opportunistic investors from zigzagging between banks and credit unions to gather nickels, with the hopes of one day selling them off for more than five cents. Forget bitcoin and dogecoin; this small community of financial speculators is pouring money into real, physical coins.
The History Of Hoarding Coins
Scooping up coins for their metal is, in fact, an age-old tradition.
- Nickels were first minted in the 1860s because Americans were squirreling away gold and silver coins during the Civil War.
- Over the past decade or so, a small but spirited subculture of prepper types has been hoarding nickels as a contingency plan against inflation Armageddon.
- Now that nickel prices have gone haywire, hoarding suddenly seems to have hit it big.
- According to Boomerang, by Michael Lewis, the hedge-fund manager Kyle Bass owns $1 million in nickels that he stores in a vault in Dallas.
Hoarders Hedging Their Bets
…Most hoarders aren’t actually turning a quick profit off of five-cent coins by surreptitiously smelting them down in their backyards….[Most hoarders just plan to hedge their bets, preparing for a world in which nickel prices are so persistently expensive that they could sell their coins for more than their face value. They plan is just to sit on their holdings and wait and see what happens and if nothing does to just turn their holding back to cash.]
…On the whole, nickel hoarding is still a niche interest…[with most banks not seeing] any noticeable increase in requests for nickels…[but] the basic logic holds up…
- What makes nickel hoarding different from so many other shades of investing where your money could go kaput is that five-cent coins will always be five-cent coins, regardless of the value of the nickel they contain.
- The upside is potentially quite big. The U.S. Mint already lost $61 million by manufacturing nickels last year; maybe one day, the composition of the coins will change, or they’ll be discontinued outright. At that point, the ban on melting down nickels would likely go away too…
Don’t count on nickel doomsday happening anytime soon [where]…hyperinflation would cause a nickel stash to more than pay for itself, because of the metal’s lingering value. [It is more likely that]…the slow creep of inflation will just eat away at America’s nickel piggy banks while hoarders manage all the logistical headaches of storing coins in such ungodly quantities….