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PRE-1982 U.S. PENNIES A UNIQUE INVESTMENT; MAY SOON GROW TO 5 CENTS AS COPPER PRICES RISE
by James DiGeorgia03-21-2007 |
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Article:
Boca Raton, Fla.- The rising price of copper could mean those U.S. pennies in
your piggy bank and hidden under your couch cushions may soon be worth up to
five times their face value, says an economist at the Federal Reserve Bank of
Chicago.
Rising metals prices are making the copper in U.S. pennies worth much more
than their face value, tempting speculators to melt and sell them for a profit.
In response, the U.S. Treasury has limited melting and exporting nickels and
pennies, and made it a felony to melt them for their intrinsic metal value.
Francois Velde, a senior economist at the Chicago Fed, argues Treasury
prohibitions won't prevent speculators from melting coins. His solution:
"rebase" the penny, making it worth five cents, rather than one.
"History shows when coins are worth melting, they disappear," Velde wrote.
"Rebasing the penny and making it officially worth five cents will keep the
billions and billions of pennies now in circulation safely away from melting
pots."
The price of copper skyrocketed recently, sending it to a record high of
$4.16 a pound in May. It's now trading for about $2.54 cents a pound. It takes
154 U.S. pennies to equal a pound of copper. So every $1.54 of pennies can be
worth as much as $2.54, a full $1 over their face value.
While the price of copper is off its recent high the rapidly growing world
economy and copper consumption is very likely to push the price well over the
recent high sometime over the next few years, according to Velde.
Since 1982, the Mint has made copper-coated zinc pennies to prevent
speculators from taking advantage of lofty base metal prices. Investors should,
therefore, focus on pre-1982 U.S. Pennies.
According to James DiGeorgia, author and editor of
www.GoldandEnergyAdvisor.com,
this debasement of U.S. coinage is nothing new.
"In 1964 the government eliminated the 90 percent silver content in U.S.
circulating coinage. Many people realized the government was debasing its
coinage. Recognizing a wonderful profit opportunity they began hoarding pre-1965
dimes, quarters and half-dollars.
"The U.S. government, with the help of the media, painted people hoarding
U.S. silver coins as unpatriotic and greedy. It was unfair and inaccurate. My
father and I believed that moving away from the silver standard violated a
strong covenant the government had with its citizens. Just look at the spending
power of today's dollar as compared to 1964 to see that the U.S. government
robbed its citizens.
"My father and I and hundreds of thousands of others saw those government
appeals for patriotism as merely a wealth grab," DiGeorgia says. "As a result,
we hoarded as many U.S. silver coins as we could. By 1980 it paid off. As silver
pushed over $45, we sold every $1.00 of face value of U.S. silver coins we
hoarded for $35.00 -a 3,500 percent return on investment in less than 15 years."
DiGeorgia now insists, "I'm convinced that this is a great time to start
hoarding large amounts of pre-1982 $50 bags of U.S. pennies. I'm recommending to
investors Original Mint Uncirculated Mint Condition bags of pre-1982 Lincoln
pennies."
"I think every coin is going to be worth a minimum of five cents-- $250 per
$50 bag. However, investors taking my advice and hoarding Original Mint State
Uncirculated bags could well see their investment grow to 35 to 1 return, 3,500
percent in the next few years from current price levels."
DiGeorgia especially likes, Original Mint State Uncirculated bags from the
1960s and 1970s. Because they are now up to 46 years old they have huge
potential as collectors' items.
"It's quite possible that collectors will soon be willing to pay $1 a coin;
an original bag of these older dated coins are still considered to be common.
With a $1 coin, each Original Mint State Uncirculated $50 bag could be worth as
much as $5,000," DiGeorgia says.
"These bags can now be purchased for $250 -$450, depending on date and
mintmark.
So the profit potential is enormous. This represents a unique opportunity for
even small investors willing to store these bags."
For more from James DiGeorgia, editor of the Gold and Energy Advisor, please
visit www.goldandenergyadvisor.com.
He is also the principal owner of
Finestknown.com a precious metals and rare coin dealer located in Boca
Raton. |
