Wednesday, February 01, 2006

Save Your Pre-1982 Pennies

This post has nothing to do with the stock market, but I think it is interesting nonetheless. Prior to 1982 almost all pennies minted by the U.S. mint contained about 95% copper and 5% tin and zinc.* During mid-1982 the U.S. mint changed the metallic compisition of the pennies to about 99.2% zinc and 0.8% copper. All pennies minted since 1982 have less than 1% copper.

The reason why the composition was changed is because during the early 1980s the price of copper kept rising and the total value of the copper metal in each penny was apporoaching the one cent face value of the penny. Accordingly, if the value of copper had kept rising, the U.S. Mint would have been losing money by producing more of the 95% copper pennies.

As you are probably aware, the prices of commodities have been soaring over the past few years. The price per pound of copper was recently about $2.33. At $2.33 per pound, the value of the copper in most pre-1982 pennies is about 1.45 cents, 45% more than the face value of those pennies, as discussed in this article.

For those who can afford to do so, it might be a good idea to start hoarding any pennies you receive in change that are from before 1982. At some point in the future those pennies might be worth several cents apiece to metal refiners willing to melt them down for the copper contained within them.

At Coinflation.com, you can determine the instrinsic value of various coins in circulation over the past 100 years or so.

*1943 was the exception when steel pennies were minted to conserve copper necessary for in America's WWII efforts.

8 comments:

seven_solitudes said...

Oh, indeed. Copper goes up, and UP! What do the recent percentages say? 33% increase for gold, %50 for silver, and %100 for copper? Oh, speaking of copper, don't forget the nickel, with an intrinsic value of 5.549 cents, according to coininflation (I really like that site)!

I bought a 1kilo copper bar for a ridiculous price (no, I shan't tell you), just to own it. But I may yet live to see the day when I can break even or make a slight profit (yep, THAT ridiculous a price). Nevermind, though, I bought it for pleasure alone, not investment. A nice feeling, holding that much pure copper in your hands. I'd love a kilo gold (or even silver) bar, but, alas, my impecunious state precludes such simple gifts. Ok, yes, I know a kilo gold bar would mean 22grand, but still.

Please excuse the capitalization for emphasis. Html code didn't want to work. I know how to close a tag, so I don't understand why. Oh well.

Anonymous said...

Isn't it illegal to destroy money?

Jim said...

It has been illegal to melt nickels and pennies since last December when the U.S. Mint created a regulation prohibiting the practice: http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm

Prior to that regulation, it is my understanding that one could melt nickels or pennies provided such melting was not done with "fraudulent intent." See 18 U.S.C. Section 331 - http://www.usmint.gov/consumer/18USC331.cfm

Back in the 1960s, Congress (or the U.S. Mint) passed a law banning the melting of U.S. silver coins in circulation because the price of silver had risen so much that it was very profitable to melt them down for their base metals. The government was losing money and feared that commerce would be adversely affected it too many coins were removed from circulation and melted down. That law was later repealed or allowed to lapse after the base metals of new quarters, dimes, and nickels, were changed from silver to copper and a run on such coins was no longer a concern.

Blake said...

Yep, keeping all my pre '82 pennies and all nickels, just as an inflation hedge (in addition to some pre-1964 silver dimes I purchased).

Not long ago, I even found a silver dime in my spare change. My excitement over one dime was maybe a bit over the top, but I figured they had long disappeared completely from circulating change.

lilknown said...

Yeah I too just found a 1945 nickel. For those who don't know its a War nickel. Mint mark D. Has about 58% silver in it. Makes me kinda upset that I didn't know these coins were going to be worth something when I was a kid. I would've saved all my change.

Anonymous said...

I think as an investment, keeping copper pennies makes complete sense. As of today they are worth 2.3 cents each. I sell copper penies by the thousands, but also keep a sizeable hoard of them for myself. The nickle is coming its over 5 cents each now and on the rise, I personally only keep pre 1963 nickels, until the mint changes there composition there is no need to keep them, unless the price goes to 8 cents thenI wil be holding some of those as well.
you can learn all about sorting copper pennies at www.crazycoinguy.com

Anonymous said...

What if the government made a new law stating that pennies were not going to be used in our currency anymore but it was still illegal to melt down money of any kind? Then the government told us that they would give us face value for all the pennies that were turned in. The government could then get itself out of debt.

Anonymous said...

I say melt the goddamn things and screw the man