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Sunday, January 31, 2010

A Safe investment, US Nickels

For emergency purposes some people are buying gold, to have on hand and preserve wealth. One problem I have with that is someday the Government may outlaw gold as a form of payment, as was done in the Great Depression. Also it does smell kinda apocalyptic to me. Storing in US paper dollars may involve the extra risk the USD has some real issues in devaluation. If that happens a little nest egg for emergency purposes may not be worth that much when needed.

Another way to have some cash on-hand and have it rise in value is US coins. Not all coins mind you, certain coins that are valued more in material (metal) than the face value. One example is the US nickel. Did you know that one 5 cent piece (US Nickel) is about 5 cents in raw metal? There are better returns on investment in older coins, but on the nickel you can go right to a bank, get a bunch, and ensure it will always have a reasonable value no matter what happens to the US Dollar valuation.

As USD strengthens, the nickel will in-fact retains it's 5 cent face value, but may be worth less than 5 cents in material. So no matter how you look at it, its a pretty safe, but not very practical, storage of purchasing power.

For more on coins value in the material visit http://www.coinflation.com/

And once again, thanks to reader Ryan Swan for the link.


  1. It is pretty unlikely the government will confiscate gold again. It was done in the 30's in order to devalue the currency. Since the dollar was still on the gold standard one could still take their dollars in and trade them for gold. In order to devalue the dollar Roosevelt needed to take back gold before he arbitrarily repriced it. If he had left it in circulation while repricing there would have been a run on the US gold supply.

    Since we no longer back our currency there's no need to confiscate gold. The Fed can print willy nilly to their hearts desire with no limit other than common sense...which they seem to be in short supply of.

  2. Gary,
    The problem I have is if the US government ever loses control of the currency valuation, the heart of the government itself will be in peril. In that state, political blame may shift to gold bugs, or whatever people pump as an alternate storage of wealth. They my not confiscate, but could impose crazy sales tax. (50%?)

  3. As we get further and further entangled in our out of control debt burden It's probably likely to see all kinds of shadow taxes spring up not just on gold. Let's face it the government isn't going to make a lot of money by taxing gold.