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The True Value Of Money (Literally)
As a follow up bonus from the Artemis presentation earlier, we present this chart which answers the age old question: what is the true value of money? It does so in quite a literal fashion, and explains why Kyle Bass is such a fan of nickels...
As a reminder, from Michael Lewis' book on Kyle Bass:
On nickels:
He still owned stacks of gold and platinum bars that had
roughly doubled in value, but he remained on the lookout for hard
stores of wealth as a hedge against what he assumed was the coming
debasement of fiat currency. Nickels, for instance.
“The value of the metal in a nickel is worth six point eight cents,” he said. “Did you know that?”
I didn’t.
“I just bought a million dollars’ worth of them,” he said, and then,
perhaps sensing I couldn’t do the math: “twenty million nickels.”
“You bought twenty million nickels?”
“Uh-huh.”
“How do you buy twenty million nickels?”
“Actually, it’s very difficult,” he said, and then explained that he
had to call his bank and talk them into ordering him twenty million
nickels. The bank had finally done it, but the Federal Reserve had its
own questions. “The Fed apparently called my guy at the bank,” he says.
“They asked him, ‘Why do you want all these nickels?’ So he called me
and asked, ‘Why do you want all these nickels?’ And I said, ‘I just
like nickels.’”
He pulled out a photograph of his nickels and handed it to me. There
they were, piled up on giant wooden pallets in a Brink’s vault in
downtown Dallas.
“I’m telling you, in the next two years they’ll change the content
of the nickel,” he said. “You really ought to call your bank and buy
some now.”
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Time to confiscate the kids' piggy banks.
/sarc
value of dollar = 1 sheet of 2 ply toilet paper
The question I have is how much is the shipping cost for $2M worth of nickles?
Bass was the only good part of Boomerang!
And all these coins will be worthless one the Rockerfeller RFID chip is implanted.
http://www.youtube.com/watch?v=zZJN9JT6VGc
Only slightly OT, and maybe not. Here is the whole of a statement issued by the CFTC today -
“In September of 2008, the Commission announced the existence of an enforcement investigation into the possibility of unlawful acts in silver markets. Since that time, the staff has analyzed over 100,000 documents and interviewed dozens of witnesses and obtained expert advice. It has been a long, detailed, and thorough investigation, and it continues in an appropriate and considered manner.”
See the link.
Discussion? Or just puke?
Three years is NOT a "considered manner." It is incompetence on display.
Or maybe just having trouble reaching the desired conclusion....
Bart Chilton just spoke on this (see link below). He says the CFTC is a poorly managed administration, and that is him saying the least.
Mr Lennon Hendrix,
What happened to the "They Live" picture? Did he find some bubblegum?
Au contraire, it's bury the malfeasance as JP Morgan is the prime culprit.
Everyone is pulling their cash out of the big banks tomorrow, right?
And buying silver with it, right?
;)
NICKEL, bitchez!!
Someone had to say it.
Looks like the delivery on your order failed...
http://jalopnik.com/nickel-truck/
Deadly Truck Accident Spills Millions Of Nickels On Florida’s I95Last night on Florida's I95 freeway a US Treasury truck carrying four million nickels was southbound on its way from Philadelphia to Miami when it collided with another southbound truck, spilling $187,000 worth of coins all over the scene. The passenger in the Treasury truck died as a result of the accident and Florida police are currently investigating the scene. Also on hand are Treasury officials attempting to clean up the mess and eager citizens trying to grab some coins and not get slapped with a Federal robbery charge. [Local6]
I've been stacking nickels for a while. I've noticed their getting harder to find, but I haven't taken metrics to confirm.
nickels are cheap ammo for a gauss gun.
nails will work fine too.
Dimes work well in a cylinder bore 12 ga. shotgun.
Now see, the news story says it will take a long time to clean up and the news reporter is saying you'll be slapped with a federal charge if you pick up the nickels. Why not just let folks that want the nickels pick them up? Let the mess clean itself up automatically for free--or nearly free....just a few nickels.
Local news channel did a ten minute story on this very topic. Apparently some people got a head start and switched over everything: car loans, mortgages, money markets...everything. Some of the comments amounted to, "I feel like I've done something good for the local economy," and, "I wanted to make a statement of protest with my money." Ten minutes doesn't sound like much, but when you consider our local news regularly covers the latest happenings on DWTS, well, it ends up being a big fucking deal to yours truly.
Moral: let's not talk down to the sheep, more and more they're lifting their heads from the pasture to say, "Uh, wtf?"
if you really want to hurt the banksters, walk away from mortage, default on car loans, and buy some gold/silver and triple short the bank stocks.
banks make money on loans. They need desparate poor workers to get more in debt so that they can profit interest tax off of your labor productivity.
now wall street makes money on gambling , but they can't when they dont' have enough assets to leverage from.
http://www.youtube.com/watch?v=Icqrx0OimSs
I don't have a problem with banks making money, nor do I have a problem with lending in general. I do have a problem with fractional reserve lending that puts the entire financial system at risk, and I have a huge problem when banks that made money on the way up end up being propped up by those who were prudent in the form of bailouts on their garbage assets.
You need to be specific when you complain about the banksters. Your local credit union is not staffed by banksters, and banking in and of itself is not immoral. It's absolutely necessary to be able to lend and borrow capital.
yes move your money out of ShittyBank of America into credit union. or into your broker and then buy some shorts.
Remember Remember the fifth of November.
If I accept an RFID chip, will I still have to be groped at the airport?
Just asking
Nope.
After the RFID chip comes the anal sex.
I won't be surprised when a report comes out that a TSA agent took someone in a backroom and the former happens, if that hasn't already happened by now.
TSA guy; "Say pal, haven't I seen you before?"
Guy in construction worker's outfit. "Yes, but I wanted a second opinion"
AldousHuxley sir
Not sure but for Cheese:
[.................] the cost of moving the cheese 1,367 miles would be $0.0497 per pound, or $2,187.20 total transportation cost.
44,000 pounds = about 20 million grams
1 nickel = 4.5 grams = 4.4 million nickels soooooooo, about $0.00049212 per nickel ???????????
Check the math - pounding down some Rum and Coke
a nickel is exactly 5 grams
really the best thing to do with a pillow case full of nickels is find a banker/politician and beat them like a granny having her purse stolen.
Exactly. A 30-year-old 5 cent coin is now worth 5.4 cents? Wow!!
A 30-year-old dollar note is also still worth a dollar ... whereas a 30-year-old ounce of silver, costing $10 then, is now worth $34. What does Kyle Bass smoke?
Nickels are a good hedge against hyperinflation and deflation alike. During hyperinflation, coins usually aren't revalued with paper. Read: when a new currency is issued, a million in nickels is still worth a million, while your million in cash is revalued to 100k. While commodities fare well during hyperinflation, they typically suffer in deflationary periods. Nickels will always be worth five cents, and are immune to deflation.
Bass is at Genius level, he has enough gold, cash and everything else. And just in case they fuck us on currency, gold, and whatever else. A million nickles for an obscure hedge just because he can.
Your "immune to deflation" argument got me thinking...
A nickel is $.05 plus a free, embedded, slightly-in-the-money American style call option on nickel, which never expires.
Which, interestingly, means that a nickel is worth more than five cents even if the current price of nickel is such that the metal value of a nickel is less that five cents.
This actually generalizes to all coins - all coins are worth (make that "can be priced using options theory") more than face value (face value plus the embedded call, which is always positive even if the underlying metal is way out of the money).
topshelfstuff
In my day a Nickel was SEVEN grams, one quarter ounce. Ounces were twenty bucks and FIVE fingers wide.
That's about all I recall of those days.
this is more accurate....http://www.coinflation.com/
So maybe we should be on the nickel standard?
Oh, we will be.
Hold on... I did the calculation and only got $.048 at current metal prices. However, it was probably much higher than $.05 earlier in the year AND I bet it will be again (soon).
Check your work:
http://www.coinflation.com/coins/1946-2007-Jefferson-Nickel-Value.html
Thanks. You saved me the trouble. Now, if I just had a dollar for every time I've posted that link....
Oughta be a "Resource Center" around here on the ZH site someplace.
Sigh....
Ah, yes... Foiled by the troy ounce. I get $.053 now that I'm using the right units. Thanks for the correction.
You're on to something big.
Go short at .053
Change accounting method to old "mark to non-troy"
Go long at .048
Rediscover troy.
Repeat
You'll be rich by Tuesday. Thank me later
Off the lows.
"So maybe we should be on the nickel standard?"
Dream on, we can't even afford a zinc standard.
You will enjoy the "Thin Air standard" and be thankful.
Right now we are on the Dream stanadard
soon to be replaced with the doucheium standard
the only standard we can have is one of tungsten
Tungsten core, lead body, with a copper jacket cinched into a brass case, bitchez!
Nickel can almost be considered a semi-precious metal now.
I have fifty pounds of the Canadian Nickels. 1955 - 1981 are 99.9% pure nickel.
Canadian nickel spot value:
1955 - 1981 Nickel $0.05 $0.0846129so how do you get those 8.5 cents for your nickels then?
I don't exactly know, but melting them down sounds like a start. Then, I guess you find someone who can use nickel for plating, NiCad or NiMH or NiFe batteries, or mix with copper for brass. Just make sure you get paid in silver or gold.
Excellent. It's certainly a strategic metal and it's not going to get any cheaper.
Gold is the money of kings
Silver the money of gentlemen
Barter the money of peasants
debt the money of slaves
Say, where do you fall, gentle reader? :))
Blow and hookers are the money of wall street ,.
Unicorns are the money of governments
Acorns is the money of the free...
dumb slaves....getting in debt.
plastic bottles and aluminum bottles the money of homeless bums (aka. professional recyclers)
RafterManFMJ
"Say, where do you fall, gentle reader? :))"
Land the money of GODS. That's where it all falls eventually.
coinflation bitchez
www.pmbug.com
Yep... I seem to visit coinflation daily... surprised ZH hadn't heard of it...
Coinflation is how I heard of ZH! They link to it on their homepage...
and the new nickel will be called "plastickel."
If you look closely, it says on the heads side "MADE IN CHINA"
"IN GOD WE TRUSTED"
or
"IN GREED WE RUSTED"
Goddammit, AldousHuxley! Why do you have to ruin it for everybody? Nobody's gonna try to eat their new plastickels now! I hope you're happy!
My reads .. this is your retierment fund.
If I were president, my first official action would be to order up a double lamb-burger with cheese. The second would be to issue Executive Order #1. They would be renumbered as the inflation in Executive Orders has made them weary and worty far too little.
I mean who the fuck has ever picked up an executive order off of the sidewalk?
None the less (get the joke, none the less sound of FoghornLrghorn laughing) the order would demand that the Homily on All Our Coin and Currency be Changed form In God We Trust to Every Man for Hisself.
The second would proscribe that stamped into the rim of each coin would be the words "blah, blah, blah, blah, blah..." etc.
There.
Money made whole again.
And wait'll ya'll see what I do with the chimps at the zoo.
I mean C-SPAN Will be more fun than a barrell full of monkeys.
Fucking Bread and Circuses Forever.
(humming some erratic tuneless song about something or other kinda patriotic about pennies from heaven, I think)
Knuckles/Ferguson 2012
I like the way you think; I think.
You have to trust in god because fiat currency is government backed and faith based. Just about everybody worships the money god and gives tribute and sacrifices to the money god.
I'd like to see chimps raping frogs during the groupon ipo. That would be cute.
"IN CHINA WE TRUST"
AldousHuxley
Yea but the tech support number rings in India.
first batch will be the "testickel"
Ouch. Hey, that Kyle Bass is pretty good; he paid a million dollars and got 600,000$ in free strategic metals from the US Govn. that are probably at their lowest price for the next five years. That's pretty impressive.
Save the pennies for numismatic value. Another run at $4 Cu, and there won't be many left.
Only picked up 1 in the last 2 weeks.
Gold, Silver, Platinum, Palladium, Rhodium, Nickel, Copper, Zinc, Lead, Tungsten.
Whatever the hell they can't print!!
Make sure and hide it well.
I hide mine right behind the Japanese company-claymore.
For anyone who hasn't seen one of these, they call them "Company Killers," and are about 3 feet wide by 1.5 feet tall.
had he bought a million's worth of gold, not only would he be richer now, but he could also carry it around... and... you know... find a buyer when in need!
The real value of the nickel play is as a hedge against fiat re-denomination e.g. where the govt. in essence, lops-off a couple of zeros off the currancy to correct for rampant inflation. So then the nickels become worth $5.00 intead of $0.05. The beauty though, is that you can't lose if you bought them at face value and the metal content is worth more than you paid. Nickels effectively hedge themselves.
PS Rolls fit great into 30 cal. ammo cans - but they end up being pretty damn heavy.
Yup, that would be about 35 lbs.
If you can't do curls with your stash, you ain't a playa
(No silver bugs, your stash does not count into the workout theory)
I curl 100 oz JM silver bars daily. Watchutalkinboutsmiddy?
A few months ago Bass advised U of T to pick up a Billion $ in physical - so its safe to assume he owns more then his share!
Uh, he has stacks of gold and platinum as well as big acreage, guns and night scopes. He's just foolin' around with the nickels - although his thinking is sound. Imagine doing what he did back in '64 with dimes and quarters...
So armageddon comes along and what's he gonna do? Drive down to the middle of Dallas Fucking Texas, sign into the vault and grab a handful?
Jesus.
I just bought the domain cash4pre1982pennies.com ...gonna be rich.
lulz :thumbsup
Got it for pennies on the dollar with the hopes of someday selling it for dollars on the penny.
It's illegal to melt them. Stay at your keyboard and don't make any sudden movements. Your big brother will be right there.
Very true about the legality issue. That is why I wonder if pennies might be the answer. If you have a mountain of pre-82s and they quit minting the penny it turns into a free for all. I am surprised the chinese aren't already grabbing empty containers in LA and shipping pennies to china. You can work in your own pennies from heaven jokes...
And I just bought the domain cash4pre1983pennies.com.
I'm gonna be richer.
I just registered www.bigblackcock4banksters.com.
Pay me bitchez!
Not all 1982 pennies are copper. About 25% are zinc. Better go back and sort or weigh them. Over 3 grams copper; 2.7 or less grams zinc.
‘Why do you want all these nickels?’
And I said, ‘I just like nickels.’
Kyle Bass rules.
fiat always returns to its intrinsic value.......
zero.
Sort of Cash_is_Trash!
http://www.youtube.com/watch?v=ChkAdoNwSn0
http://www.youtube.com/watch?v=5J-IAOY6UIo
Bullshit! I don't see Staples giving away paper for free!
Yeah, govt is like magic -- they can combine perfectly good ink and perfectly good paper and make worthless currency.
If you want to bring this ponzpublic to its knees pull all the coins out of circulation
its happened several times in history
http://en.wikipedia.org/wiki/Shays'_Rebellion
If the coin is worth less than the cost to stamo it you are giving the government a profit each time you take one out of circulation. Due to sets and collectors state quarters and bicentennial quarters made a profit for the mint/government.
But I now think Shay and Frie are heros. Thanks for the link.
That was a great link. Never heard about this in my history classes. After reading this my feeling about Washington and Sam Adams is that they were complete dicks and seem to have been little better than the tyrants they overthrew a few years earlier. However, my faith in the complete and untarnished reputation of Thomas Jefferson as a brilliant hero of the people that America has disgracefully under rated remains intact. Jefferson it seems was not too foolish to see the beginnings of the raising of the head of corruptible power in the newly won America. Too bad we don't learn more about him.
You mean they guy that just wanted to run his farm but was willing to step up to the plate because his country needed him? This would be both in war and in political leadership.
I was wondering if Native American's Sovereign Immunity would make it legal for them to melt the coins. I can just see hedge fund managers shipping train loads coins to The Monhegan Sun for scrap
interesting question.
huh pickles ????
LMAO, day after US Debt Default, Banks closed. Some jackass walks into a market, with 30,000 pre 82 pennies. "Look, Ive got $300 worth of pre 82 pennies, which, yesterday were worth $1200 in their metal content at .04 each, so, Ill give you these pennies for $2400 worth of food. " "Listen pal, we don't take fn pennies here, put the pennies on the counter, and walk out, pop,click .45 to his head. Shits self" leaves. GTFOH
If you are dumb enough to do that then I doubt you have been collecting pennies in the first place.
If you have a brain, you'd be prepared and wouldn't have to leave the house for a few months, until after the initial cull had occured.
I wonder how much the value of the Drachmas Greece is currently printing is. Obviously less then the paper.
Greece ran out of ink weeks ago.
About a penny.
That means, this crisis has no solution, and can only be worst....
So, printing money is not the solution... just a hope on time..time time time to do what? nothing!
Because Berlusconi and go-go girls still there, Greece still there with their politicians, USA keeping AAA rating (how? i don't know....well yes...)
So, shit is everywhere at anytime, but nobody want to clean nothing.
You have common sense or are you looking for some?
Goes back to saving your nickles and dimes.
I saved Dimes when they were Silver. I ended up taking them to a coin Dealer and Selling them to help buy my 2nd Home around 1972. Who would have thought.
Time to arbitrage the shit out of nickels!
It's illegal to smelt US coinage so what does he plan on doing with these nickels?
it doesn't take the amazing kreskin to see that it's impossible to lose and likely to gain at least 20% once the law is changed.
Why do you need to melt them down - that does'nt change them into something new.
They are nickel now and will be nickel after the melt - think junk silver coins!
That was my thought as well. I've got to believe there is a good answer. What is it?
the current nickel will be changed, Coongress already changed th law on Coin Composition, thus a soon collectable or used as a 1964 and earlier ''junk silver'' used now.....think EBay example
"It's illegal to smelt US coinagey so what does he plan on doing with these nickels? "
+1
Its also illegal to bet on sports in most states. Its illegal to make your own liquor, but its not illegal to own sugar and yeast. I'd venture everyone one of us broke a law today, probably a couple.
The whole point of maintaining control is making everything illegal so we are all criminals and will keep our mouths shut and our heads down.
Think of nickels as insurance. It might be illegal to melt them, but that won't stop desperate people should it come to it.
Nickels are silver for the common man, and possibly with hydrogen gas and heat, a new energy source.
http://oilprice.com/Energy/Energy-General/Cold-Fusion-and-Rossi-s-E-Cat-...
........... and possibly with hydrogen gas and heat, a new energy source
If you can come up with heat......
Why do you need a new energy source?
Rhetorical.......please don't answer.
Ni + Fe + H2O = Edison battery. Think about it.
US gold coins are legal currancy too - do you have to melt them down to negotiate them? Just because they say $20.00 on them doesn't mean you're stuck with that value. Same with nickels.
think junk silver coins. you can melt them, you know? bass may be thinking the same could/will happen to nickels.
You are on the right track. When the composition is changed the non-melt law will become moot or unenforced. They would prefer you melt them. That would promote the circulation of the "new nickel".
So-called "junk" silver is also illegal to melt down, and yet it trades at more than face value. Do you question that too?
I also wonder sometimes about the practicality of enforcing the no-melt law. How do they catch you? Do they arrest people who possess metal bars of suspicious compositions?
"Why no, Mr. Federal Agent. I make sure all my bars are 95% copper and 5% zinc when I buy them with cash. Why do you ask?"
Actually, that's not entirely true.
http://cointrackers.com/Barber-Half-Dollar.php
Well selling heroin is illegal too but using your logic who's gona' catch us right?
Tons of people around where you are unable to turn their huge piles of heroin into money?
It's illegal to smelt CIRCULATING US coinage. Coinage considered "out of circulation" (including old silver coinage) can be smelted. The bet is that new nickels will be issued, and that law will be rescinded within a few years.
Edit: apparently it is only illegal to smelt nickels and pennies, all else is fair game, so long as it is not done with the intent to commit fraud: http://www.coinflation.com/is_it_illegal_to_melt_coins.html
Whoever smelted dealt it.
Thanks Crockett
He who denied it supplied it.
Right...it's illegal.
"WASHINGTON — People who melt pennies or nickels to profit from the jump in metals prices could face jail time and pay thousands of dollars in fines, according to new rules out Thursday."
http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm
Now what are you doing with all those nickels? I guess he can sell them to a museum in 75 years or something.
To be honest I don't care, for all I know he smelts them and turns them into a statue of himself.
You have terminal cancer or something?
They are likely to change compositions on those two coins within a couple of years, and everyone knows it. This is why you can already get a premium for sorted pre-1982 pennies.
I don't do it myself--might as well open a scrap yard if you are going to collect nickels. You should be able to get copper that is more pure for less than you pay for pennies. Might be good for those who have very little.
Do I have terminal cancer? WTF?
I've never had someone come at me like that before.
You must have terminal cancer, or some other disease that is going to kill you very, very soon, as you seem to have no willingness to entertain a time horizon greater than a few months at best.
At least I entertain a time horizon.
When was the last time you entertained a time horizon of any kind? You still can't give me a date on when the comex is going to default on their silver obligations...you can't give me a price target with time frame on anything and everytime I ask, you disappear
Don't worry Bob. There'll be a cure for cancer well before the CFTC closes down the COMEX...LOL
Cue Trav in 3...2...1...
Perhaps you shouldn't ask at 4:00am after the article has hit the third page, hm?
I have literally never seen you ask that before.
Funny how you demand that I be a psychic, and foresee the date that the ponzi falls apart. No-one can say that for sure. All one can see is that it is becoming increasingly desperate. From the desperation I have seen over the last six months, I have repeatedly and publicly given a 75% probability that the COMEX will bust by the end of this year. Of course, if you had two brain cells to rub together, you would know that the COMEX has been in a state of default since LAST December, and have only weaseled out of their delivery obligations by "delivering" SLV shares, likely with a substantial dollar premium.
What is the law? You can't deface the currencie, is that it? Which makes all of those penny stampers at Disneyland illegal. So Disneyland will be fined for making profit on defacing pennies? Yeah, right.
You can't deface the currency with the intent to commit fraud, such as altering a coin to make it appear to be a numismatically valuable misprint. Penny stampers are legal under the statute.
Note that there is a SEPERATE statute forbidding the melting of nickels or pennies for their metal content. A similar law was in place in the early sixties, but was quickly abandoned once the clad copper coins entered circulation. The point of buying and hoarding is that A, the metal content is already more than face value, and B, it is only a matter of waiting for the Mint to change the composition, which they WILL do, just like every other mint in every other inflationary or hyperinflationary period.
Well then I stand corrected.
Well fuck me....
So I open up a "family" fun park destination comprised of a hose in my back yard and a coin stamp machine, coin squish all my fucking pennies and then take them to Mr. Smelter and....
Jesus!
I mean arbitrage is arbitrage, but kinda gotta do this on a mighty big fucking scale to make any moolah out of it unless you're a armageddon survivalist and in that case, Mr. GoodFoodBank'll probably want a few rounds of ammo instead of listening to you tell him about the composition of the bar of metal you're trying to pedal while he fondles your wife.