four generations ahead - Will 'clad' be the 'silver and gold' of our day?

Hi guys,
I have some general questions. Why did we go clad in 1965? Is there a good book about this that anyone can recommend?
Also, I have this feeling (that may be erroneous) that, as much as clad is not so much the fad now, it may be all the rage when clad discontinues, just as silver and gold did, right? wrong? Are not zinc, nickel, and copper prices slowly rising. I mean, I'm 25 years old. I'm not even thinking about the coins I collect as an investment for myself. But I do think of them as an investment for my grand-kids....or better yet, their grand-kids. Tap a generational formula to that and you have approxiamtely the beginning of the 22nd century when those great-great grandkids are reaching adulthood. Will not clad be just as precious as silver and gold are to us now?

 

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Silver got too valuable to be used in coins so they had to come up with an alternative with cheaper metals. The clad composition was developed because of several properties, including electromagnetic, aesthetic and wear. It worked in vending machines, had a decent appearance and would be durable.

It is true that clad coins do not have the collector cachet that silver does due to its relative lack of intrinsic value. Should the prices of copper and nickel (the metals used in the clad coins, no zinc in them...) rise to a point where the metal is worth more than the value of the coin there will be hoarding based on this, just as some people are hoarding pre-82 pennies.

Nickels are also copper and nickel based but are not clad, the value of the metal in them is above 5 cents usually these days. While there is some hoarding of them they are still more then plentiful and there have been no shortages as a result.

I don't see clad going away anytime soon, it works well, wears well and is cost effective. Should the costs go dramatically up or there is a radical re-imagining of the US coin system things could change but don't hold your breath. Dimes and quarters are the only circulating coins using copper-nickel clad and I haven't heard of any changes planned for these coins.

 

4 Generations Ahead - Will 'clad' be the 'silver and gold' of our Day?

In a word - No.

If that had even the remotest possibility of happening, it would have happened by now as it's been nearly 50 years.

 

Thanks n9jig,
I guess I am trying to shoot us way into the future, say 2090. I know it is extreme speculation, but maybe it's not. Metals like zinc and copper and nickel will either become mined to a degree in which it is exhausted, or most probably, in my opinion, tech will eliminate metals, as such, altogether. Or both. This will be at a time when I am dead, but the valuse of these superfluos clads will sgo up. It's a crazy speculation. But try to understand this - I don't primarilly collect for my own personal investment. I collect for my great-great-grandchildren's investment. I don't really do that. I just collect, cause it's in my blood, I suppose.

 

But I'm not talking about 50 years from now. I think digital money will replace actual money by then. That's when clad will become more p'precious' - at least as a collectible. By then, tech advances can produce such metals in a lab more cheaply, but it won't be for coinage.

 

Please, please look at historical charts of coin prices and precious-metal prices, and compare these to "traditional investments" -- stocks, bonds, even simple interest-bearing accounts.

 

I don't believe cu-ni clad coinage will ever have any investment value. Copper and Nickel are just too common among the elements. Of course, there will always be a small market among coin collectors for pieces of numismatic merit, but that market will always be small compared to other markets. JeffB's advice is sound: look for a diversified portfolio of traditional investments, and leave the coins to satisfy your collecting bug.

 

IMO these clad coins will not be worth saving for bullion value. Silver and gold have always been precious metals which is why they will always be a good investment. Copper, nickel and zinc are not precious metals and never have been so they would not have the same increase in value like silver and gold.

Its just my opinion, but I think it is crazy that people hoard Nickels for thei bullion value. Each Nickel in melt current is worth about .055 cents a coin. Not a good ROI. Copper pennies on the other hand at least are worth over 2x their face already making it a decent investment. The space and the gas money driving to the banks back and forth kills the .005 profit for each Nickel hoarded.

If you go to coinflation.com a clad coin has about 20% in melt value under the face value of the coin. It is going to take many many years and a lot of inflation to make that an investment if any.

 

I would disabuse yourself of the idea that coins are an investment as quickly as possible. I know how attractive the 'I am not buying coins, I am investing money in pretty shiny metal objects that I enjoy to look at' idea is, but it's confirmation bias plain and simple. Coins are a horrible investment, even saving gold from circulation in the 1920's or silver in the 1960's would have been a horrible investment.

Here are a couple quick calculations :

Silver dime is worth around $2.21, but a dime from 1960 inflation adjusted dollars would be $0.76, decent return, but the same $0.10 invested in 1960 at 7% return would be worth $4.00. Silver has also been at a high, if you did the same calculation back when silver was around $5, only a couple years ago, the dime would be worth $0.37, which would have put it below inflation.

$20 gold pulled out in 1920 would be worth right around $1,700 now, but inflation adjusted that $20 would be worth 226, again a decent investment. However, $20 invested at 7% for 93 years would have grown to $10,000, and if you go back 10 years to $300 gold prices that $20 gold piece would be worth $340 or just over the inflation adjusted value.

 

Thanks all, I was expecting this response. I don't expect it to be a good investment now, or maybe not even in a hundred years. But, at some point, those Zinc mines are going to be depleted. 300 years from now, whatever. I'll make it clear: I don't collect for investment. I collect because I like history. And coins are living history. To me, passing that along, and the dream of having my great-great-great-great grandchildren having them (which is a pipe dream, most likely) and being wowed by them, is really what I mean by 'investment'.

 

Also to add to the zinc mining. If pennies are discontinued in the near future all the zinc used to mint pennies will not be needed.

 

One more point, and I am not trying to beat up on you. I tend to think leaving a large/valuable coin collection to heirs is a bad idea. If the heir is not as into collecting as you were, or if their collecting interests differ from yours, they will be in the position of having to disperse your collection. To me, this is a hardship I would be imposing on them, so I will sell off my collection and leave money instead. I am in a much better position to sell my collection and maximize it's value than my children will be as I am the collector with the knowledge and contacts.

With that said, I received a handful of coins when my great-grandmother passed away which mean a lot to me. But, these coins have little numismatic value, maybe in total $200 worth of coins. If that's what you are talking about, I think it's a great idea. If you are considering leaving a sizable/valuable collection I would consider how you might feel if you inherited a sizable and valuable collection of 1920's era glassware.

 

Understanding Money

It's difficult for the youths of today to understand the transformation by necessity from a tangible currency to a digital currency. You would need to research and understand the relationships between the various "major" societies, and the leaders of same. A study of Charles DeGaulle and Richard Nixon et al might help in understanding the "necessity". A major factor was that a universal medium of exchange can't have a variable universal value without controversy. A zero tangible value Fiat currency has only a value which is allowed by other "Power" members of an international society.

Coins/Paper weren't necessary, but the transformation from tangibles to electrons wouldn't have been acceptable to a single generation. The youths of today may understand the exchange media of the future, but if I explained to the "norm", it wouldn't be comprehended. Robert Reich and others have elaborated on next generation exchanges, but it significantly advances from there. An example of current changes can be minutely understood by viewing: http://www.meechadini.com/index.php?news&nid=6

The technology already exists for the Power majority of the world who insist on hard currencies for exchange, allowing an implanted individual to exchange all with only radiated electrons. Soft currencies may still require negotiated tangible (e.g. food for fuel) exchanges between "partners".

I personally believe that in 4 generations clad coinage will have gone as clam shells, buggy-whips, candles, swords, hard-wire information transmission. There will still be the archaic collector, as I, who recalls and retains pieces of metal or paper that represented value. I believe that as currently, they will be an insignificant minority who when showing a chop-marked "Trade Dollar" today, or a "clad coin" then, will be asked "what is that?". The exchange media/currency of the future may be based on electrons or essentials.

JMHO :thumb:

 

Over 4 generations I think you will see a lot of inflation. Even at the "official" rate of around 3% per year, after four generations it will take 55 cents to buy the metal in todays nickel. At some point during those years it will reach a point where it will become profitable to go to the bank, buy boxes of nickels and take them directly to the smelter. (We actually reached that point briefly awhile back before the price of nickel fell from the $28 a pound that it had reached.) Before it reaches that point the coins WILL disappear from circulation, just as the silver coins disappeared from circulation. At the time they disappeared they were only worth about 1.2 to 2 times face. The copper cent is already over that and the five cent is at 1.1 now I am not saying it would be a good investment, and I am not recommending that people should start hoarding now, but at some point the value of the metals will rise high enough that the coins will have to change size, composition, or the dollar itself will have to be revalued.

 

Coins have been made from metals for thousands of years. All that time, precious metals have stayed the same, base metals have stayed the same.

When the greeks were making their coins, they were probably able to go out to the nearest field and pick up chunks of copper. Now we have sophisticated mining techniques. The advancement of ways to procure the metal has, throughout history, kept supply pretty much constant with demand, with the occasional hiccup.

 

So ture. I'm a history major, and I'm about to do my senior thesis. This is a possible direction I want to go in. Thanks so much for your input.

 

When coinage is no longer used, the collector base will diminish significantly and more than likely, will NOT renew itself as it does today.

Many collectors are born of their experiences with actual money and once that experience is no longer available, the number of folks that pursue their interest in "collecting" that money, will simply not be there as there will by no experience to relate to. Collecting of coins will become a very specialized hobby much like collecting campaign buttons or just buttons in general.

Value goes beyond intrinsic Value and coin values are directly related to supply and demand. If there are few supplies with no demand then there's just nothing left. Folks MUST be interested in it otherwise it becomes just another pointless and worthless stamp collection or boxes full of Beany Babies and Cabbage Patch Kids.

 

If you wonder if it will happen, yes. It is already happening in countries like India. They can't keep enough coins in circulation despite the fact that they are making them out of aluminum and other cheap metals.

 

Most metals are exceedingly common relative both current demand and foreseeable increases in demand. The only current metal that could become extremely valuable and make a return on "investment" is nickel. Indeed, nickel is far more valuable than its current manipulated price that came into existence when the LME defaulted on nickel back in '09 and they started making poor qulity "stanless" steel (it's not stainless any longer but people no longer demand quality)(remember that when you go under the rusty knife).

But to set aside nickel in modern coins is generally senseless. It costs a quarter to set aside 2c worth of nickel at today's prices. Within twenty years the government will have removed almost the entire value of the quarter through inflation and the nickel will most probably be worth somewhere between 25cent and 2 dollars in todays money. It would make far more sense to either buy a nickel producer's stock or to set aside the cheapest nickel you can find. For instance at least in theory you can get Canadian nickels for five cents so for a quarter you could get five of them with 50c worth of metal instead of 2c worth. In twenty years these should be worth at least $6 in todays money and maybe as much as $50.

I have extreme doubt that playing at such a low level is going to be worthwhile for most people. You won't be able to find enough canadian nickels to make all the work and storage worth the effort.

Clad really is the metal of the future but it is collectors seeking better dates and tough coins where the money will be made some day and never in metallic value. When I say "never" though keep in mind someone will clean up with this someday but it willbe someone in the right place at the right time. Maybe he'll be able to buy clad quarters by the ton and sell them as chill scrap but it's not going to be something where you can plan far ahead for it. And it certainly won't involve buying clad today.