by David Hathaway
by David Hathaway: Give
Are you doing
due diligence with nickels? As many LRC readers know, nickels are
the only real "money" being distributed by the U.S. Government
at this point in time. The value of the metal in a nickel equals
the fiat value assigned to it by the state. This cannot be said
about the currently produced pennies, dimes, quarters, or half dollars
and certainly cannot be said about the paper money or the even more
insidious and plentiful computer digit money that we are forced
to use. Nickels are uniformly marked, impractical to counterfeit,
and easily recognizable for their metallic content (75% copper,
is it really that easy to get real money in exchange for the worthless
stuff floating around? Yes, it still is. You walk into a bank, hand
the teller a 20-dollar bill, and walk out with 10 rolls of nickels.
There is no dealer markup. There is no sales tax. There are no shipping
fees. There is no capital gains tax or value added tax. It almost
seems impossible in this day and age. It soon will be impossible.
We are temporarily in an era with nickels that is analogous to the
pre-1965 silver coinage period. Coin composition is slated to change
during the 2013 fiscal year. So, what are the issues that would
preclude a person from taking advantage of the inevitable increase
in the value of nickels when compared to the fiat dollar? Well,
there is one small issue and one slightly bigger issue. The small
issue is obtaining the nickels and the bigger issue is storage.
Both issues can be resolved fairly easily for most people. First,
letís look at the smaller issue.
You donít want
to shoot yourself in the foot when obtaining nickels; not to mention
your fellow hard-money brethren who are doing the same thing. Donít
go into a bank and make a grandiose gesture by asking to speak to
the branch manager and discussing the bulk acquisition of $1000
or $10,000 worth of nickels. I have read articles where people proudly
describe the incredulous looks they get from the bank employees
and the follow-up questions administered by the bank staff from
such an action. These articles usually include a description of
how they schooled the bank employees about how the customer was
hoarding nickels as a hedge against inflation. Donít have this conversation
with the bank. You donít want to be the source of new bank policy
restricting the acquisition of coinage. Some banks may charge a
percentage for obtaining coins but, most still donít. With nickels
it is still so easy.
You need to
have a systematic outlook. What you do is always lay down
a 20 dollar bill and ask for 20 dollars in nickels. No more. Thatís
all. Make this fit into your lunch break at work, your commute,
your exercise routine, or your shopping routine. You can go to one,
two, or three banks fairly quickly. Donít get the coins using your
debit card or a check. Keep it to a simple hand-to-hand cash transaction.
You donít want multiple computer entries showing up on your bank
account at different bank branches 10 minutes apart. It looks like
you are doing something. Banks look for patterns and they will ask
more questions. You arenít doing anything wrong but, once again,
you donít want to make waves. You want to be able to continue getting
your nickels. Giving out $20 in coins is no big deal to a major
bank but, retailers that get coinage regularly usually do have to
pay extra for the privilege. Small account holders and even non-account
holders are usually given "small" amounts of pre-rolled
coinage in exchange for paper currency as a courtesy at no charge.
You want to be in the small customer "courtesy" realm
on this issue. Being in a slightly bigger town is a plus but, not
essential. If you happen to be on a lengthier shopping trip or road
trip, you can get $20 worth of nickels ten times fairly quickly
at ten different banks. Remember, you donít want to be responsible
for the issuance of new restrictive policies within your local banking
world. Banks talk to each other. They go to conferences. If only
a few guys in a town of a million people are trying to get large
quantities of nickels on each transaction, the word will get out
and policies will change.
You wonít believe
how quickly you acquire nickels at this rate. You quickly get in
and out of the bank since you are not doing account-related transactions.
You get 400 nickels each time you hand over a 20-dollar bill. The
transaction usually takes less than a minute. If you do this twice
every day on your lunch break, you will have nickels coming out
of your ears. Donít try to do it at a quicker rate. You will end
up causing problems.
issue, which is really the point of this article, is the storage
of your nickels. One of the first rules for obtaining and storing
metal as a hedge against inflation is to take possession of the
metal yourself and to not trust someone else to store it for you.
A warehouse receipt can be next to worthless in a hyperinflationary
environment and is subject to the same type of mishandling that
has been seen in metal futures, ETFs, and other paper forms of metal.
Nickels do present a challenge for storage but, the challenge is
style ammo cans are a very tempting solution. They have one serious
drawback. They look valuable. That wall of ammo cans in your basement
really looks like a stash of something worth stealing. The larger
size (generically called .50 caliber ammo cans) are too heavy when
filled with nickels. The smaller size is easier to handle. They
weigh about 35 pounds when filled. They hold about 88 rolls. Each
roll contains $2 face value of nickels. So, you are preserving about
$176 face value of nickels in one ammo can. To get up into multiple
thousands of dollars, you will have quite a wall of ammo cans. They
get harder and harder to conceal. They wonít fit in a floor safe
or that hollow brick like your gold coins do.
the answer? After years of experimenting, I have found the perfect
solution. Home Depot sells pre-cut 24-inch sections of thick walled
4-inch black ABS pipe. They also sell the 4 inch ABS end caps and
ABS cement. This combination makes a perfect long-term burial solution.
The ABS cement causes a reaction to occur that is the chemical equivalent
of welding the plastic end caps on by chemically softening, melting,
and then permanently binding the adjoining surfaces of the two plastic
pipe fittings together. PVC pipe also works. The nickels will last
for decades in pristine condition underground when stored in these
I had an occasion
to dig up 10 pipes recently containing a total of 560 pounds of
nickels that had been buried for three years. The store bar-code
stickers hadnít even come off the pipes yet. The pipes with the
caps glued on with the ABS cement still looked brand new. Each of
these pipes holds 122 rolls of nickels on average. The pipes weigh
about 56 pounds when finished. I have found that drilling a tiny
hole with a small drill bit aids with pushing on the final cap since
the glue makes the caps airtight and the air pressure makes it hard
to push the second cap on. The air relief hole allows the cap to
slide on easily before the cement binds the parts together permanently.
The small hole can then be filled with ABS cement to make the pipe
watertight. To get the nickels out, you will have to cut the pipe
open with a saw.
multiple pipes, dig a trench. It will look like you are installing
a water line or a sewage pipe. The 24" X 4" inch black
pipes look like sections of sewer line. You can rent a trencher
to make the process quicker and to reduce prying eyes. I have found
that even sensitive metal detectors cannot detect the pipes when
they are more than 12 inches deep. To be on the safe side, you can
make your trench 18 to 24 inches deep. Even if they are buried less
deep, they have the metal detector signature of a buried water pipe
and wonít look like an attractive target to unearth.
I will address
one more point since I hear this all the time. How do you cash in
the nickels for the metal value? You donít in the short run. This
is not a buy and turn over proposition. You donít have to worry
about the legalities of melting coins. People donít have to melt
down pre-1965 silver coins to get the metal value. There will always
be a market for the actual metal value in the coin. You donít have
to melt down gold coinage to get the metal value. Some day, when
the effects of massive inflation are more evident, you will have
your hedge against inflation and you will be able to sell your coins
for their metallic value as you need to. In the case of nickels,
they wonít have to be assayed. They are marked and it is obvious
what they are. Their metallic content is common knowledge. There
is no down side with nickels. If nothing else, you have gotten your
money out of computer digits and you are holding it in tangible
form for the coming banking crisis. It just so happens that you
got full value for yours in incorruptible metal form with a picture
of one of the less offensive presidents stamped on the side.
Hathaway [send him mail]
is a former supervisory DEA Agent who homeschools his nine children.
He enjoys writing about the injustices of the state.
© 2012 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.