Monday, February 07, 2011

Put Ben Bernake's Face on the Coming New Nickel

Replacing Thomas Jefferson with Ben Bernake on the new nickel? It would only be right, for why, read on....
Note: There is a specific call to action at the end of this report.

The term "melt value" is a measure of how much value a coin has in terms of its metal content. If it were melted and sold as metal, what would that metal be worth? As our government uses the printing press to create ever more debt-based currency it siphons the value out of existing currency- such as that in your paychecks or bank accounts. This is the hidden tax of inflation at work.

I have in my drawer a silver dollar from the 1940s. It contains 0.77 of an ounce of silver. The silver in the coin is worth far more the face amount (over $22). At the time it was minted, the face value of the coin was greater than its melt value. This is supposed to be the normal situation for coins. They finally had to quit making dollars out of silver, because people were incentivised to melt them down and hoard them rather than spend them at face value.

As the banksters got the printing presses rolling, the dollar sank so low that it could not uphold its silver standard. In the 1980s, the same thing happened to pennies. Their face value fell beneath their melt value, so people started melting them. The government made it illegal to do so, but economics are above the law. Finally, in 1983, they quit making pennies from copper and since then the "copper" penny has been made of almost all zinc. It has kept the same form, so it is difficult to tell the "real" penny from the "cheap" one. You could look at the date, or after a while you will notice that the zinc pennies have a slightly different hue. A penny now has a melt value of 3 cents.

The same thing is about to happen to the nickel. This coin is currently 25% nickel and 75% copper. It has a melt value of over 7 cents and climbing. Mark my words, the content of the nickel is about to be debased. I have not heard of any pending legislation, but the laws of economics will soon demand it. I am concerned that they will handle it the same deceptive way they did with the penny- leave it looking the same even though its content is very different.

There is a not-remote possibility that we will see a sudden and dramatic collapse in the value of Federal Reserve notes. In such a circumstance, much of what we consider normal economic activity will be altered. It will be impossible to save money in Federal Reserve Notes as they become an increasingly leaky "store of value." Gold, silver, nickel, and copper will retain value and so people will increasingly turn to them in order to protect savings.

In such a circumstance, people will turn to the real value of coinage in order to store value and perhaps in order to make trades. People will not have dollar bills saved up. That would be foolish. Dollar bills will be spent as soon as they are gotten in order to avoid being penalized with a loss of buying power. A nickel in 1913 has as much buying power as a dollar does now. Suppose the same thing happens again, only this time in months instead of decades? I can see a situation where gold is used for large transactions, silver is used for regular ones, and coins still made of nickel and copper are used for change- at their melt value, not their face value.

The US Government will throw up every fair and unfair obstacle in an attempt to prop up its failing currency. One barrier they can put up to make it harder for people to use coins at melt value is by cheapening the content of the coin while retaining the same look to the coin. They already did this with the penny. They have taken the first steps toward doing this with the nickel. Have you notice how many different nickels have been issued over the last few years?

My proposal is very simple. I hope that Dr. Ron Paul helps make it happen. Any change in the content of the nickel should be accompanied by noticeable changes in its appearance. People should be able to easily tell the debased nickels from the many nickels which contain their original metals. It should not be nickel in color. Thomas Jefferson and Monticello should not be on it. Maybe Ben Bernake should be on the coming debased nickel, in recognition of his powerful role in necessitating it's cheapening.


Blogger Mark Moore (Moderator) said...

A Lew Rockwell article today goes into details about how to store them and ship them once their melt value gets 5X face. Thinks there will be a market for them like there is for "junk silver" coins now.

7:58 AM, February 10, 2011  

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