For arguments sake let’s say you walk into a store and buy a widget for 75 cents. You dutifully hand over a dollar bill to the store owner, he then apologizes because he has no quarters or dimes and has to make change using five nickels instead. You huff and puff but except the five coins, money is money after all, right? WRONG!
Lately because of the price gyrations in the commodity markets, and due to the different metal compositions of the two coins in question, by giving you five nickels the store owner actually gave you 26.1 cents in change due to the rising price of nickel. Yes that’s right, at today’s market prices the metal in the 5 cent coin is actually worth 5.23 cents, a rather healthy 4+% premium! I bet you are intrigued now about the value of the metal content in the quarter? You are correct to be curious, so allow me to disappoint you! The metal content of a quarter is worth about 4.9 cents at current prices.
Could you have got a better deal by requesting a different breakdown for your 25 cents change? Absolutely. It would be a long shot, but if you asked for your change to be made with 25 pre-1982 pennies, the store owner would have unwittingly given you approximately 57.5 cents worth of copper for the 25 cents of change. The pre-1982 penny’s over generous copper content makes it worth an astounding 2.3 cents at today’s copper prices. In percentage terms that is an incredible premium of 130% over face value. Are you guys still sure Ben Bernanke knows what he is doing? If you think I ride Bumblin’ Ben hard, I’d just like to make it clear, I don’t hate the man, I just think he is in way over his head and no one is protecting my savings from his reckless monetary policy.
So now you know which coins are worth keeping in your coin jar and not banking, do you want to know what is the worst value coin of the bunch? Of course you do. Well it’s rather fitting actually, as you will see. The coin that is worth the biggest discount from face value as per metal content is none other than the 2007-2010 Presidential Dollar coin! It may have a dollar face value but the metal is worth just shy of 6 cents, a whopping 94% discount to face. Just to be clear this is an equal opportunity thumbing of my nose at the incumbent and previous holder of the ‘Office’ (note the dates of minting on the Presidential Dollar), so no political flaming please!
Where did I get all this great information from? Well here is a major hat tip to the guys over at www.coinflation.com, if you get the chance check out their site. It appeals to my inner coin nerd…
-Luke Sidewalker
-Current balance $25.80
{ 5 comments… read them below or add one }
My brain can barely make change. For me to figure out coinage values beyond the obvious would shut it down completely.
Gee, this is way nerdy. And exactly the type of useless triva that tends to get stuck in my head.
OK, so this is all very interesting… not that I am seriously planning on pouring out my coin jar and smelting out the copper from the per-1982 pennies but it’s certainly an entertaining thought.
So, might I suggest a further investigation of this subject? Given the costs of the metals involved and the manufaturing process itself – just how much of our tax dollars is going up in smoke in the production of Nickels and Cents? I read years ago that the production of the 1c coin was a loss leader for the US Government but that they couldn’t put it out of production because of the public outcry over such an insult to a great president from his home state. Where of course, our current president most recently hails from.
Further to this… if the metal content of coins actually makes them worth less than face value, and I would warrant that the higher denominatoin the greater the loss – where does that leave the UK with 2 pound (c. $2.22) coins?
As someone with a degree in Geology and therefore a consideration for the world metals and raw materials market this “inner coin nerd” post struck a chord!
(Side)walk on!
It is my understanding that as long as the metal value of the coins remain at a discount to face value there should not be much of a problem. It’s when the metal value of the coin becomes a premium to face that the real problems begin. Thanks to Bumblin’ Ben’s trashing of the dollar (today’s dollar rally not withstanding) we are in for a heap of trouble. People will start taking the premium coins out of circulation. I for one will no longer bank any coin that is worth more in metal than it’s denomination!
-Luke Sidewalker
I have had enough trouble keeping up with the fluctuation of gold and now I know I have to be more careful of the value of my coins. I have a huge jar of old coins I’ve been saving for a rainy day so perhaps it’s time to consider their new monetary value.