The following graphic is a snapshot of today's intrinsic coin valuations based on the spot price of metals they are stamped from. These prices do not include the minting fee (a stamped coin is generally worth more than a lump of metal whose weight and purity cannot easily be determined by a potential buyer of it) so they are probably 5% below actual value because that's what it costs to mint.
But look at the Nickel. It still only costs 5 cents to buy yet the metals it contains are worth 6.8 cents at today's prices (1.25 grams of nickel and 3.75 grams of copper). Nickel and copper are not thought of as precious metals today but they are used in so many industrial applications that they are both completely necessary for our economy. They will never, ever go out of style. They will never, ever go bust or become valueless.
Thus, when you can buy them below market price they make a great mechanism for long term storage of wealth as long as you have the space to store them. Of course, getting your money back out of them might mean that you have to melt them down because the face value - the value set "by fiat" or by government decree is wrong. Sooner or later the government will fix this free handout. They will make Nickels out of zinc or some other really common and cheap pot metal and that's when people will figure out they should have been hoarding the coins. Remember, before government debased the silver coins nobody hoarded the 95% kind because they thought it was normal, common and usual that coins should have intrinsic value. It was only after they saw government pulling the "looks the same but not the same" game with our coinage that the people began to practice Gresham's law on silver coins.
Until government stops giving away free metal you can just go to the bank each week and give them a $100 bill and in exchange for worthless paper those morons will give you over $136 dollars worth of valuable metal. You don't have to sort or search or anything. Its a simple transaction where you hand them worthless paper money and they hand you very useful industrial metals that have been mined and refined and then stamped and rolled into convenient cylinders. Today this strategy probably sounds a little whacky. Check back with me in 5-10 years on this and you will be singing another tune. Those metals cost real money to mine and smelt and refine. Those are all very energy intensive operations and unless energy becomes free in the next decade the cost of producing those industrial metals is going to go up dramatically. That makes the coin worth something. In contrast, paper money costs very little to produce and so there is no limit on its production. Paper money has little or no intrinsic worth. Any time you get a chance, trade it for something that does have intrinsic and lasting worth.
A roll of Nickels a day will keep the government funny money con men away because Nickels are the only currently minted US coins that can be considered real money. Their intrinsic industrial value is worth more than what the government declares it to be. Another plus with Nickels is that they do not corrode so you don't have to take any special storage precautions. You could put them in a wooden box inside a couple of trash bags and bury them for a decade and they would come back out of the ground in pretty much the same shape that they went in.
To get more specific, let's say you wanted to diversify some of your savings into metals. How does $20k sound? You don't trust paper claims on metals because you know that Wimpy Promises aren't worth anything. So you collect 400,000 Nickels over time. That may sound like a lot but it's only 200 trips to the bank if you buy $100 at a time and I bet you could easily tell them in advance that you wanted to transact $500 at a time (so they should ship in lots of Nickels at their expense for you).
At 5 grams each that comes out to about 4400 lbs of metal. I'm guessing that would fit into a cube that is 4' on a side. In other words, roughly the size and shape of a pallet of tile. It would not be much trouble to dig a hole, put a wooden tile pallet in the hole, put a lid over the pallet and then a PVC tube leading above ground. Then you cover it with dirt and pour a small concrete slab over the top of it. Bingo, instant long term savings vault. When you want to add to it, just drop rolls of Nickels down the PVC and put the cap back on. If someone wants to steal it they will have to move a concrete slab and then load 4000 lbs of metal into their getaway car. That is not likely to happen even if thieves have you at gunpoint. Pull that metal out in 10 years and, by the looks of things today with Bernanke printing dollars like it was his hobby, there is a good chance that it will be worth $100k or more. But under no circumstances will it be worth less than the face value you paid even if someone invents free energy and mining costs plummet.
