A penny saved is 1.4 pennies earned
by Tommy Jasmin
As most coin collectors are aware, the precious metal markets have seen huge gains over the past year. At the time this column was written, gold sat at $558.50 an ounce, silver at $9.70 an ounce, and... copper?
Copper is now at $2.12 per pound. So what? So, the intrinsic value of the copper in pre-1982 U.S. Lincoln cents is now worth more than the 1 cent these coins represent. In an interesting article on 321gold, Alec Nevalainen notes "my ashtray is outperforming my 401K".
Alec recounts how back in 1982, the U.S. Mint realized it was losing money making money. At that time, pennies were 95% copper and 5% zinc, and the cost to manufacture them began to exceed $0.01. So they changed the composition mid-year to 97.5% zinc, with a coating of copper to retain the look. I distinctly remember this occurrence. As a kid collecting coins, I noted the new pennies felt noticeably lighter in hand. I told my parents, "did you know copper pennies aren't copper anymore?". My parents not believing me, I took one of my dad's wire cutters, cut one in half (a Federal crime, most likely), and showed them the shiny silverish guts.
When Nostomania created its coin database, we considered this difference and created separate entries for 1982, noting the mid-year issues as "1982 Copper plated zinc, large date", etc. Why the major coin grading services like PCGS didn't note distinct issues puzzled me. The mintage is different, the weight is different, why not a separate PCGS number? Hence these items languish in our database with a PCGS number of "none". Maybe they'll now wake up and create new designations to help us out.
As Alec pointed out in his article, to most, this isn't exactly front-page news. But he notes that if you gather 100 pre-1982 pennies, you now have $1.41 in copper/zinc, an instant 40% gain! It brings back memories of the onset of clad coinage for dimes and quarters in 1965, and the days of sifting through change for "all silver" coins. The interesting point Alec's story brings up is that coins have always had intrinsic value based on their metal content and every so often the metal markets create a situation where the intrinsic value exceeds the face value.
Tommy is subbing this month for our usual contributor, Dean M. Albanese, CEO, Albanese Rare Coins, Inc.
Dean's father David Albanese is a Nostomania coins advisor. They can be reached at their outstanding web site.
Visit our Coin News Archive.