Tuesday, December 10, 2013
Nickel Hoarder Quits - Contrarian Indicator - Copper Price Bottoming?
Posted by Charleston Voice
Hoarding ends after seven years
I just severed one of my ties to the past. In this case, the past I am writing about is the recent past when the U.S. Treasury issued new regulations in December 2006 that made it illegal to melt cents and nickels.
At the time, the copper and nickel in the 5-cent coin were rising rapidly in price. The metallic value of each nickel soared to more than twice face value. Had something not been done, it is likely that a cottage industry would have developed offering premiums for the coins to all who willingly turned them over for melting. That would have caused a coin shortage.
Melting was prevented. The regulation is still in effect, though prices of copper and nickel have fallen to the point where each 5-cent coin now has just .043 cents melt value. The risk of melting has been successfully avoided.
About the time of the new regulations, token authority and retired World Coin News editor Russ Rulau decided it was time to go to the bank to acquire nickels by the roll in order to hoard them against the day when they could be profitably sold. It reminded him of his experiences with silver being removed from dimes, quarters and half dollars in the 1960s.
I do not know how many nickels he put by in this manner. He did not say. I did have more than one conversation with him on the topic. He even wrote a feature story about his experience.
Rulau died a year ago. I hope his heirs didn’t find a hoard of bulk nickels. Considering his numismatic stature, had they found some of the coins they might have thought it necessary to check each piece for possible rare dates.
I did my own experiment during this time. I decided to keep every nickel that came my way. I put them in a small tin that I had won at a Iola Lions Club raffle. I stuck with it for years, though when I needed exact change to get through the highway toll booth at the Chicago O’Hare Airport, I would take what I needed, but this need did not occur more than a few times each year, so it did not deplete my stock of nickels to any large degree.
My experiment was interesting in that it inoculated me from the enthusiasm Russ was showing in his nickel project. I just did not get many of the coins in my day-to-day existence. In fact, I received so few, that only recently about seven years after I began the process, I reached the point where the container was full.
I decided it was the time to cash in the coins at the bank and find out precisely how many nickels I had accumulated.
After the machine finished counting, the teller wrote the sum on a small piece of paper. She pulled a $20 bill and three $1 bills from her cash drawer and then two quarters and a nickel from the change dispenser on the counter. That means I accumulated 471 coins in the time I was a nickel hoarder. When I was a kid, I went through more nickels than that in single day during the circulation finds era.
I got one 5-cent coin back to start my next nickel hoard, but there won’t be one. It will just be thrown in a container with the rest of my change.