Coinflation

  • Sharebar

Many people remember, some people even have, coins made of silver. Quarters, dimes, even nickels at one point, were all made of silver. Well before silver went through the roof, the US government stopped making silver coins. The coins were left in circulation and, eventually, those who hoarded them sold them for a tremendous profit. In 1982, pennies were switched from being made out of copper to being made out of zinc. Recently, copper hit $3.80 per pound. Because one pre 1982 copper penny weighs 3.11 grams, one pound of copper pennies costs $1.46 at the bank. That means copper pennies are really worth over 250% of their face value, seeing as copper is worth about 4 dollars a pound right now.

Think about this. Copper scrap can be sold for $3.00 per pound at my nearest scrap yard. That means if you simply collected 20 pounds of copper pennies, it would cost you $30, but they coud be sold for $60. If you were selling directly to a refinery, you would get damn near $80.

Now before you go penny crazy, you should be told that melting pennies is illegal. Most people, myself included, believe that this ban will be melted soon enough, as the price of copper continues to go up.

There is an entire website devoted to this phenomenon.

{ 3 comments… read them below or add one }

Anonymous March 14, 2011 at 3:19 am

Optimization comes to mind again here, melting pennies takes a lot of energy. Propane, MAPP gas, or what have you. So you gotta figure how much is costs to melt the pennies vs. how much you make.

Reply

The Irrationalist April 7, 2011 at 4:52 pm

Sorry for the delayed response, but I never recommended melting the pennies. I actually recommended not melting the pennies because it is illegal.

If your worried about a refinery melting the pennies, and you think that melting the pennies will cost refineries too much energy, well you must have forgotten that refineries already have to melt down all the copper you bring them, regardless of the form. The energy that they spend melting and shipping the metal to and from their factories is already figured into their overhead, which is already figured into their price, which is what they are paying you at the moment. They are not the ones that pay for melting the metal you bring them, YOU ARE! they discount the metal, which is why they don't buy it from you at spot price.

Reply

Mgk May 12, 2014 at 9:28 pm

If they did change that law and made it legal to scrap pennies, how would the scrap yards know if all of the pennies are copper pennies? I doubt that they would want to check the dates on all of them.

Reply

Leave a Comment

Previous post:

Next post: