UPDATE FOR PENNY AND NICKEL METAL COMPOSITION:
Nickel Investors beware! You are about to jump the most important hurdle of the entire nickel investing process. And you can never go back. On December 15th, 2011 new legislation proposals have called for the elimination of the copper nickel in favor of the cheaper metals by changing to steel nickels. Though the bill was introduced with regional incentive to Ohio, with its historically developed steel industry, the lasting results and effects of the bill will still be felt nationwide. Will this bill pass? No one will know until it is voted on. But the point is that the bill existed, the public will become aware of the growing cost to make a nickel, and therefore, support the change. Politicians like being re-elected, so they do what makes their voters want to continue to vote for them. Therefore, there is a great possibility that the nickel metal composition change will occur. The 2012 nickel composition is still zinc, but if this bill passes, the 2012 nickel composition may become steel.
Once the nickel metal composition changes, nickel prices will jump because sorting will become required. Steel nickels are not as valuable as copper nickels. You will need us to process all nickels to sort the copper nickels out of the steel nickels. This adds two brand new dilemmas to nickel investing: Time and money. Time because it requires vast amounts of time to sort coin. It is quite a process to sort through literally tons of coin. Money because not only does time equal money, but there is cost to sort, and redeposit those steel nickels back to the bank. Basically, nickel investing goes from incredibly cheap, to having higher cost, making your initial capital investment in nickels greater. Buy nickels today before a metal composition change occurs.
Coin Composition Change
When a coin is made, there are three main stages to its development and practicality: Production, distribution, and use. Respectively, these could also be called: Cost, Value, and functionality in society. The production of the coin is the cost to physically create the coin. Distribution is the cost to transport the coin to users and the price the producer (in this case the United States Mint) can sell the coin for. Use is simply the willingness of the coin buyers to have a use for the coin, whether selling numismatically for coin collecting or in trade as a currency.
The sale price in the distribution stage, with copper nickels, is lower than the production cost. Meaning that even with charging a premium above face value, the United States Mint does not have enough demand for the new copper nickels to offset the manufacturing cost to make the copper nickels. Therefore, a copper nickel is a bad business decision. This bill is an attempt to make the sale of the nickel a good business solution, which assumes the latter stage (use of the coin in society) is still practical.
Nickel investing is at an important crossroad. The copper nickel is worth more than its face value. However, with copper prices lower, this fact is hidden by the state of the economy by manipulated metal prices, including copper pricing. As time progresses, copper price will correct itself and the copper nickel value will correct with it, rising in metal value. Right now, you can buy copper nickels dirt cheap. Copper nickel investing even has a floor insurance back up plan: Each nickel is worth five cents, so in a worst-case scenario, you can cash in on your currency value of the nickel investment to have an investment exit strategy.
If the nickel metal composition changes to steel nickels, you won’t be able to simply buy copper nickels without the process of sorting equipment usage and access to large volumes of nickels. This creates a processing problem and a sourcing problem. The more work involved in an investment, the more cost. We have a solution: “Buy nickels today” before the term becomes “buy copper nickels today.” Once the term changes, the cost investment capital cost with the extra need to differentiate between copper nickels and steel nickels.