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How Much is a Nickel Worth? More than Five Cents, Says Michael Lewis (VIDEO)

by Jeremy Taylor, posted Feb 2nd 2011 6:15AM
Michael LewisOn 'The Colbert Report' (Weeknights, 11:30PM ET on Comedy Central) Stephen Colbert quizzed financial journalist Michael Lewis about what he thinks the next big investment opportunity might be.

"Nickels is what you want to buy, nickels," Lewis explained.

"One of these characters, who made his fortune betting on the collapse of the system has started to buy nickels, " Lewis continued. "The metal content of the nickels is now worth seven cents. If you melted it down, you'd get seven cents."

According to Lewis, this mystery investor was able to get hold of 20 million nickels, which he keeps in a Brinks storage facility.

So hotshot financial types are hoarding nickels, apparently. This can't be a positive sign for the economy.

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lewis' math is wrong, and his financier friend (if he even exists) is in the red, or break-even at best. a nickel weighs 0.1615 oz. a nickel is 75% copper, 25% nickel. so that means 0.12 oz copper, 0.05 oz nickel. copper currently trading at $3.33/lb, or 20.85 cents/ounce. nickel currently trading $18,000/ton, or 51 cents/ounce. if you do the simple math, there is about 2.5 cents worth of copper and 2.1 cents worth of nickel in a nickel. so a nickel's melt value (assuming you could melt it down for free, which you can't) is just 4.6 cents, so 8% less than the 5 cent denomination. now, if the price of nickel and copper were both to go up by 50%, then yes: the nickels circulating today would theoretically be worth 7 cents. but if one wanted to make a bet on copper and nickel prices rising by 50%, one could do so much more efficiently by buying LME futures or forwards, which carry the advantage of not requiring a brinks warehouse.

September 26 2011 at 4:18 PM Report abuse rate up rate down Reply

Too bad this genius can't realize his gains. Melting down coins for their base metals is prohibited by statute and regs.

February 05 2011 at 6:52 PM Report abuse rate up rate down Reply
1 reply to brajohns's comment

look up pre-1965 quarters and dimes (junk silver typically sold in bags) on eBay.
you don't have to melt them down...

January 28 2013 at 10:46 PM Report abuse rate up rate down Reply
John F

A nickel is worth 7 cents. A copper penny is worth about 2.9 cents. So you can gain 2 cents on 5 cents invested, or you gain 1.9 cents on 1 cent invested.

Pennies is THE way to go.

And as for his comment that 20 million nickels must weigh a ton? Not even close. Try MANY MANY tons. I know I have over 1.5 tons of pennies. And that is only 450,000 pennies. So 20 MILLION nickels is a LOT more than "a ton" (More like 50 tons!)

February 03 2011 at 6:36 PM Report abuse +1 rate up rate down Reply
1 reply to John F's comment

The penny must be before 1982...Later dates are plated Zinc.

February 04 2011 at 1:11 AM Report abuse rate up rate down Reply
1 reply to PoPs's comment

Ya im sure he knows that he did metion COPPER penny didnt he?

February 04 2011 at 11:12 AM Report abuse rate up rate down

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