Saving Copper Pennies
Throughout history coinage has often had intrinsic worth due to the metal used in the minting, namely silver and gold. Pennies made with copper are no exception as man has used copper since antiquity in many applications (including trade) and it still remains one of the most widely used industrial metals. Hell, you’re probably only a few feet away from copper, either in your computer, wiring in the walls or pipes.
As I mentioned in “China’s Rise and Competing for Resources“, the demand for commodities are generally increasing as the world’s population grows and a large segment of that population becomes increasingly more affluent and industrialized. The rise in price of copper over the past handful of years has lead to increased theft of copper products (such as wire and pipes) to sell as scrap. In 2011, someone broke into the Iowa State Fairgrounds and stole approximately 300 brass (copper and zinc) faucets from public restrooms in order to sell, which added up to about $8000 worth of metal.
Pennies in the United States used to be made with an alloy of 95% copper and 5% zinc. Just as they stopped using silver for coins in 1964, they stopped making predominately copper pennies in 1982 – some of the pennies from that year were 95% copper, some were 97.5% zinc, as they are today. Although it currently costs the US government more to mint the zinc pennies than their face value, it would be even more costly to use the traditional copper.
Right now the metal value of a true copper penny is around 2.5 cents. I’ve seen people on eBay and Craigslist selling rolls of 100 copper pennies for $4. The price of copper today is about $3.50 a pound. We’re not exactly talking about a precious metal like silver or gold here, but it’s worth considering saving your copper pennies. I sifted through my piggy bank while watching TV a while back ago and since then I’ve been putting them aside in a bag as I get them. I don’t think it’s worth going overboard and sifting through thousands of pennies (although some people have devised clever ways to do this!) and it sure isn’t going to make you rich, but it’s worth putting them aside as you get them.
When the US government stopped minting silver coins, people began to take them out of circulation due to their metal value. Currently those silver coins trade for considerably more than their face value – a 90% silver dime is going for approximately $3 on eBay today and I should note that silver prices are low at the moment (about $27.50 an ounce). I’m not suggesting that copper’s increase will be as dramatic as silver, but it’s a very safe bet that the metal price of the copper penny will continue to be more valuable than the face value – and if it isn’t, you can still use them as you would a zinc penny for the face value. There’s absolutely nothing to lose by sitting aside the copper pennies you acquire.
Due to the relatively low price per pound, it doesn’t make a lot of sense to hold a ton of physical copper as an investment but there are exchange traded funds, but it’s kind of cool to have some coinage and bullion around. The American Open Currency Standard is an interesting project where they’ve developed a network of merchants that use an internal currency based on metals. Their one ounce copper coin corresponds to roughly $2 worth of barter within the network. This arrangement allows for people to use a currency other than US Federal Reserve notes and if anything, the coins are a nice collectable item and good for spreading certain libertarian-themed messages.
Oh, I should also add that as of right now it’s illegal to melt down coinage – but they still keep their value as metals. Good for barter and a store of value, right?
So save your copper pennies. You might be glad you did someday.