Well, I’ve been warning you since 2009, folks. The Wall Street Journal has just reported: Treasury to Cut Costs by Remaking Coins, Replacing Paper. Treasury Secretary Tim Geithner has now spoken. This debasement, under the kinder and gentler phrase “introducing more cost-effective materials” will begin in 2013. While the precise changeover date and the exact composition of the new penny and nickel have not yet been announced, I suspect that it will take place early in 2013 and the new coins will be made of stainless steel. (With a copper plating, for the penny.) The ravages of inflation made the change inevitable. The Journal reported: “The cost of making pennies and nickels are about twice the face value of the coins–2.4 cents for a penny and 11.2 cents for a nickel, the Treasury Department said earlier this month.”
You gave been warned. The clock is now ticking. I strongly urge you togo to your local bank or credit union, and ask them to order you some $200 U.S. Mint boxes of nickels. In just a few years, after the debasement is completed and the rational self interest of Gresham’s Law psychology purges all of the real cupronickel nickels from circulation, rolls of pre-2013 nickels will sell at a substantial premium. Because nickel is a base metal, this premium will never be as high as that for silver coins, but at least you’ll know that you hold some genuine money that will hold its value, even if the Quantitative Easing monetization process continues indefinitely. (Quantitative Easing is debasement of the dollar, writ large.)
In addition to hedging against gradual inflation, holding nickels will also provide you insurance against the less likely sudden revaluation of the Dollar. As I’ve explained previously, if a zero is ever lopped off the Dollar, new paper currency will be issued, but the old coinage will still circulate. (Since it would be too expensive to replace.) This will make anyone holding coins the beneficiaries of an overnight 10X gain.
This is your last chance to stock up on nickels at face value, folks! If you don’t already have four or five .30 caliber ammo cans full of rolls of nickels, then you are behind the power curve. Don’t dawdle any longer.