Value of clad coins in currency devaluation (OT, kinda/sorta) : LUSENET : TimeBomb 2000 (Y2000) : One Thread

I have read in several places that when currencies are devalued, typically the (metal) coinage does *not* get devalued; i.e. it becomes effectively super-valued. I've never seen any detail or documentation, though I heard someone remark that Israel had a currency devaluation, in which the coins were not devalued and hence were worth much more (in purchasing power) than the paper, after the devaluation. Any truth to this? Any basis for the advice to stockpile rolls of modern clad coins (i.e. non-precious-metal)?

-- alan (, June 10, 1999


..... I think I remember mention of a similar situation with devaluation in some S American country: coins retained value while paper burned. Again, no documentation.

-- alan (, June 10, 1999.

In a devaluation, and by that you must mean deflation, the paper money would be worth just as much relative to coinage as before. In hyperinflation, coinage could be worth more if a new currency was eventually issued using the old coinage.

I don't think hyperinflation is a likely outcome here.

-- Dog Gone (, June 10, 1999.

Devaluation does not equal deflation. The typical devaluation that Alan is refering to is when a curreancy has been inflated over the years, the number of zeroes on the bills become embarassing so everybody turns in their old paper currency for the new paper currency, usually 10 old for one new. Usually the coins are ignored because they have ceased to be useful and few are in active circulation, example U.S. half pennies. Therefore, in a 10:1 devaluation or revaluation or whatever euphanism is applied, the paper currency's purchasing power stays the same (everybody just lops off one zero off of everything) but the purchasing power of the coins goes up by 10 times.

Various prognasticators have been advising people to stock up on common coins for this reason since the Carter administration. Hasn't worked yet.

-- Ken Seger (, June 10, 1999.

If y2k wipes out the electronic money supply (a 10:1 deflation), then coins become more valuable. If y2k leads to hyper-inflation, coins may increase in value relative to paper. If nothing much happens, they are a pain to carry around.

-- collecting coins (, June 10, 1999.

In a highly inflationary scenario, copper pennies may be worth more than 1 cent each. However, it would take an awful lot of them to really make any serious profit.

-- Mad Monk (, June 10, 1999.

alan, I don't think anyone is real sure about what will happen with our fiat money in any denomination, be it paper or coins, come severe Y2K problems. The most sensible advice that I have read is to stockpile both paper and coins, with the paper not consisting of anything higher than $10 bills. The main reason is because the possibility of increased buying power and the possible inability to receive change.

-- Jack (, June 10, 1999.

MM - (hmmm MM=2000!) Are the old copper pennies still much in circulation anymore? When were they discontinued? 1984?

-- Ken Seger (, June 11, 1999.

The pennies were changed to copper plated zinc in mid l982 because of a spike in copper prices and they never went back to the bronze. The "copper" cents are found in circulation now at a rate of about l5% or so. From 1864 to 1982 the cent size and composition were basically the same.

It is interesting that nickels have remained the same size, weight and composition (5g, 25%Ni 75%Cu) since the beginning in 1866. This is close to the composition of clad coinage, but clad coinage is worth $20 per pound and nickels go for a little over $4.50 per pound. It therefore appears that nickels have better than 5 times the intrinsic value of clad coins per unit of weight.

A nickel may again buy a large candy bar, a pound of salt or a decent cigar. (if intrinsic value becomes meaningful again)

-- William D. King (, June 11, 1999.

No spam, aka meer cat, has all answers to this question, apparently...

-- Andy (, June 11, 1999.

Unfortunately, the only truly "clad" coins were minted in "66, and 67 (?). they were "clad" in true silver. i forget the actual dates.

Got a tame numismatist?


-- Chuck, a night driver (, June 11, 1999.

All that typing and I forgot to make my main point. In that type of currancy turn-in, they don't bother changing the coins since they A. can't afford the cost to reissue the coins B. they don't have the minting capacity to reissue the coins. Please note that currancy turn-ins do NOT occur in a healthy monetary system.

Andy - What post were you refering to??

Chuck - those were the 65-70 Kennedy halves and were 400 fine, see my May 88 article on silver for the details.

William D. King - Bronze? uh?? flip, flip, flip, by golly you're right the EB says most copper coins are bronze, 4% tin 1% zinc. ya' learn sumthin' ev'ry day! Thanks!

-- Ken Seger (, June 11, 1999.

speaking of coins- we were just discussing the money issue in terms of if someone had money to store, besides keeping it safe from burglars, what about fire? My kid suggested that getting coins- particularly Susan B's should work? anyone have any info on that? Would basic ole US dollars, quarters, etc be safe in a fire or melt?

-- farmer (, June 11, 1999.

Farmer - If a house fire gets hot enough to melt metal, common coins become worth the metal in them. Close to zilch. Silver and gold do not have this problem, their value as a lump remains the same. If you are worried about melting store in a steel pipe (gas or water) with caps on both ends. Of course just burying it somewhere will work too!

-- Ken Seger (, June 11, 1999.

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