Penny Cost 2012 Boosts Copper Penny Investing
With an exponential growth of public awareness surrounding the high cost of minting the U.S. penny (see chart below), the U.S. copper penny investing market has boomed.
U.S. copper pennies (made of 95% copper and 5% zinc) were minted mid-1982 and before. The copper metal value of the copper penny means that not only will the coin never be worth less than one cent (face value of a penny), the physical real metal value of the coin is worth about 2.5 cents and growing.
As more people have come to the realization of the value in copper pennies, demand for copper pennies is on the rise and continues to prosper. When investing in large sums of copper pennies, the added copper metal value makes for huge gains as the leading and most popular base metal in the world.
Since U.S. law makes it illegal to melt down copper pennies, this copper investment sells under copper spot price, making it much cheaper to take position in the commodities copper market than alternatives like copper bars and copper rounds while retaining the same long-term benefits.
The key fact about copper pennies: ‘They don’t make them anymore’ – supply can only go down while investors buy them up. Supply and demand economics suggest that since demand is rising and supply is falling, prices will inevitably rise as a result.
Read more on How to Invest in Copper Bullion
Figures are in U.S. Cents Sourced from the U.S. Mint
Invest in Copper Pennies
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Cost to Make the Nickel 2012
| According to the United States Mint 2011 annual report, it costs 11.18 cents to mint one individual nickel. That means it costs 2.236 times the actual face value of the five cent coin.
The nickel is made of 75% copper and 25% nickel. Because of this Cupronickel (copper-nickel) metal composition, the nickel has a greater metal value than face value, meaning, every nickel is worth more in its metal weight than its face value. Because of this fact, the U.S. made it illegal to melt down the nickel.
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Even with these melt laws in place, prudent commodity investors and hedge funds are purchasing nickels as a medium to long term commodities Cupronickel investment.
Since the The Coin Modernization, Oversight, and Continuity Act of 2010 calls for a research group to identify metal alloy composition changes for various expensive coins to mint, it is highly anticipated the penny and nickel will be made of steel to reduce mint production cost.
When this metal composition change of the nickel occurs, investing in Cupronickel five cent coins will become significantly more expensive to incorporate infrastructure sorting costs to separate the newer steel nickels from the more valuable copper nickels.
In the meanwhile, nickels are disappearing from circulation from the simple $100 nickel box to the $1 million bulk investor. Because of this, more nickels are being minted by the millions upon millions to offset the loss in circulation. This process cannot and will not continue with a change.
Invest in Bulk Nickels
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Cost to Make the Penny: Chart/Graph
It’s official. The 2011 annual report from the United States Mint has been released. When discussing cost to mint a coin, one must look backwards in time at last year’s reported figures. So how much does it cost to make a penny in 2011? Here’s our updated chart modeling the cost of the penny since the year 2001:
Figures are in U.S. Cents Sourced from the U.S. Mint(Click chart above to make bigger)
2.41 cents. Every one cent made by the United States Mint costs 2.41 cents. The consensus is that this loss is 3x greater than the Fiscal Year for the mint in 2010. That’s three times the inefficiency, waste of money, and over-compensating minting of coins for circulation.
Penny Profitability
The loss the US Mint takes in producing the penny is mind boggling when contemplating how much turmoil goes on in Congress trying to reduce cost. Take a look at the loss taken by the Mint to make the United States penny in 2011 charted in a graph starting in the year 2000:
(Click chart below to make bigger)
 Figures in U.S. Dollars Sourced from the U.S. Mint
United States Mint Annual Report 2011
Want to read the annual report? Here’s the link below. We recommend doing a “find search” for the word ‘penny’ to save time when reading. The actual figures printed for losses are on page 11. Our advice: Buy copper pennies now before pennies are exterminated and the price of copper pennies skyrockets when people realize they can’t get them in circulation anymore (read more: Penny Cost 2012 Boosts Copper Penny Investing).
United States Mint 2011 Annual Report
What do you think about the penny? Should the United States Mint keep making the penny, change the composition of the metal of the coin, or discontinue the penny altogether? Leave a comment below with your thoughts.
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