Investing in Copper and Nickel?

[Zadius Sky]

Hi, I'm just wondering what y'all think about an approach to investing in copper and nickel?

This past weekend, I've been thinking about buying silver and gold (since I've sold all of them in 2009 to get by) with a little that I have. I also had dreams where my online bank account (dollar value) dropped from 100.00 to 0.00 overnight (without my using it at all) and becoming bankrupt with nothing else physically to pay with. Then, I thought about trying to buy silver/gold but, as it turns out, I cannot afford either of them (with silver at $30 and gold at $1,500).

So, I looked around for other investments and noticed that copper and nickel were on the rise. Then, I read about the new act of H.R. 3694 and 3693, where United States' penny and nickel coins plans to be struck primarily from steel (otherwise known as "a stainless steel token"). The melt value of a "stainless steel" nickel would be a less than half a cent. The reason being that the cost to manufacture these two coins has risen above their face values. But, these acts haven't been made into a law yet.

In Canada, the nickel coins are now 94.5% steel with its penny coinage ceased in May 2012 (Canada used to have pure 99.9% nickel in Canadian Nickels from 1922 - 1942). Even United States is currently in debate about getting rid of penny coin altogether.

It's interesting how, today, the central banks sold their gold to China (_http://dailyresourcehunter.com/sorry-no-gold-today-we-sent-it-to-china/) and China actually owns almost 30% of world's copper and demanding for more copper. One article (09 Jan 2013) explains China's fixation on copper:

_http://www.canadafreepress.com/index.php/article/52286

China has spent about $5 billion in the past five years buying more than a dozen copper mines and deposits from Afghanistan to Zambia. They have a reason to be investing in these new pipelines of copper. In 2010, the world used seventeen million tons of copper. By 2015, worldwide demand for copper is expected to reach twenty-five million tons. China consumes almost 30 percent of the world’s copper supply every year, a number that will increase to almost 40 percent by 2025. Although China is one of the top five producers of copper, its domestic supply cannot keep up with its ravenous demand...

Copper

Here, I'm not talking about collecting a US penny, which (since 1982) is composed of 97.5% zinc and 2.5% copper. Before 1982, it was composed of 95% copper and 5% zinc. Sorting these pennies, by date, to have just enough copper just ain't worth it. I'm talking more about a pure copper (.999) where one can buy a copper bullion coins/bars. A copper per pound is currently at $3.50.

_http://www.providentmetals.com/bullion/copper.html

I went to a local coin shop and asked for a copper bullion coin to which I brought just one one-AVDP ounce round (2012 Saint Gaudens). They just started selling it because of the copper bullion demands and of a likely composition changes in US coinage in the near future.

Copper have more applications than nickels (being a good conductor of both heat and electricity). It is found in group Ib of the periodic table, together with silver and gold, while nickel is of the iron group.

Nickel

The United States nickel (since 1946) is composed of 25% nickel with a homogenous alloy of 75% copper, which both have values. This coin is known as a copper-nickel Jefferson 5-cent coin. The metal value of the coin is now more than five cents. As of 2013, it costs more than eleven cents to produce a nickel. Nickels are worth having in bulks than pennies, which seems to be frowned upon by the government and storing them can be risky to have but manageable. A nickel per pound is currently at $7.50.

I probably would find some "mint" nickels rather than a bulk (maybe rolls) or getting some pure .999 nickel bullion. The latter is becoming rare to obtain in rounds/coins than in bars.

There's a man in 2011 who brought 20 million nickels for $1 million because of the metal "inside each coin is worth 6.8 cents." (_http://www.dailymail.co.uk/news/article-2044363/Kyle-Bass-Meet-Texan-investor-millions-credit-crunch.html)

The fact that the popular coinages in America for hundreds of years were gold, silver, nickel and copper. So, beside trying to get gold and silver, should we start investing in copper and nickel? Would they be the next "precious metals?"

 

[Corvus]

Maybe it is better to invest in food because metals are not something you can eat when starvation hits. It will be the only currency that will matter.

 

[Rich]

Maybe it is better to invest in food because metals are not something you can eat when starvation hits. It will be the only currency that will matter.

Good point Corvinus :)

 

[Kisito]

Maybe it is better to invest in food because metals are not something you can eat when starvation hits. It will be the only currency that will matter.

Good point Corvinus :)

The Pharisees who wanted to trap Jesus, he had asked in public if it was necessary to pay the tax. They wanted to trap him, because if he said yes, the people would have been against him and if he said no, it's Rome which would be against him. Jesus asked To whom belongs the effigy on this denier (metal money(silver)). Pharisees answered him, Caesar. Said Jesus: To give to Caesar what belongs to Caesar. If we took into account all the parabola of Jesus, and if nobody would touch the money, all the leaders(managers), the powerful would collapse in an instant. It's easy to deny the money(silver), but which would not choose 100 kg of gold in 100 kg of rice?

 

[LQB]

Well, Kyle Bass - a highly respected hedge fund manager has invested in a massive amount of nickels that he has stored in vaults in his Texas fort that he built. He is a no BS truth-teller when it comes to economic conditions and investments. It might not be a bad idea to sock away a few rolls. ;)

 

[United Gnosis]

The key word is investment. Hopefully you have learned your lesson in 2009, that is, "investing" in PMs (precious metals) is, in the best of cases, mostly fruitless when sufficient liquidity is not maintained.

Being forced to sell one's long term investment at the first sign of short-term difficulties is obviously counterproductive. Hence, you should ensure that you can endure - or even better, thrive - under hostile circumstances for a prolonged period. You should plan for lasting self-reliance (hopefully at least a few months) before having to sell investments in order to maintain it further.

From this point of view, you should first invest in the goods that will assist you in building up that self-reliance. Land, food, tools, materials, infrastructure are all valid - and, arguably, they could be sufficient unto themselves to the point where they would negate the need for precious metals. Further, you will want to have liquid currency on hand to last at least two or three months in case of job loss, instability, or bank run/holidays.

Despise fiat currency all you want, if/when TSHTF some people will be slower to transition to the emergent economy, and you will still need worthless paper to trade with them.

Investing in PMs only begin to make sense once those aspects are secured, or under special circumstances (i.e. a backpacker who desires his wealth to be portable/easily hidden).

How far along this process are you? Does it truly make sense for you to invest in precious metals? Or, for instance, would it rather make sense for you to first invest in structural steel, rebar, glass panes, welder, etc. for you to build greenhouses and other infrastructure?

 

[Zadius Sky]

Thank you all for your responses. :)

I wanted to get more data on this subject since there's practically no thread on it and there were several threads on silver/gold investments. The idea behind getting copper/nickel is a cheaper way to getting an investment, at this point of time and uncostly, and their usefulness in the long run (I can't do other investment/storage, such as food, etc.). So, my understanding from your responses, it's useless. I will forgo this idea. Thanks again.

 

[Foxx]

Thank you all for your responses. :)

I wanted to get more data on this subject since there's practically no thread on it and there were several threads on silver/gold investments. The idea behind getting copper/nickel is a cheaper way to getting an investment, at this point of time and uncostly, and their usefulness in the long run (I can't do other investment/storage, such as food, etc.). So, my understanding from your responses, it's useless. I will forgo this idea. Thanks again.

I personally am not sure that it's entirely useless and since copper is used a lot more than silver and gold, it could see better gains than the two. The only main issues I'd have with copper are that it's quite heavy/bulky as an investment and that it might rust (I haven't dealt with copper much in general, so I'm not sure that should be a concern for the next few years).

I used to be quite adamant about recommending buying metal to people, but these days I'm really not sure as I have no idea how the future will play out with regards to them. I think having some on hand makes sense because they generally have a perceived (or real, which I think copper has more of) value and that can be useful in tough times whether fiat paper currency is or not.

Here's some past graphs on copper prices:
_http://www.kitcometals.com/charts/copper_historical_large.html

seeing it dip to almost $1 in 2008-2009 makes me wonder how well it will retain its value in the future. Here's an even longer graph, which might give a little more perspective:
_http://www.infomine.com/investment/metal-prices/copper/all/

Here's an article that's fairly negative on copper:
_http://contraryinvesting.com/commodities/copper-commodities/copper-long-term-price-forecast-2012-2013/

I wonder if sugar in large plastic bins wouldn't be a better investment than copper, considering food shortages and people being quite thoroughly addicted to it. Or maybe candy bars? I considered buying holiday candy the day after (or whenever the sale started) the holiday passed. I'm still considering it, and Easter is not far away. It does last forever!

My personal take is that stocking up on some decent food now remains the best option since you can always use it and it's useful regardless of what comes up.

 

[United Gnosis]

I personally am not sure that it's entirely useless and since copper is used a lot more than silver and gold, it could see better gains than the two. The only main issues I'd have with copper are that it's quite heavy/bulky as an investment and that it might rust (I haven't dealt with copper much in general, so I'm not sure that should be a concern for the next few years).

I used to be quite adamant about recommending buying metal to people, but these days I'm really not sure as I have no idea how the future will play out with regards to them. I think having some on hand makes sense because they generally have a perceived (or real, which I think copper has more of) value and that can be useful in tough times whether fiat paper currency is or not.

Here's some past graphs on copper prices:
_http://www.kitcometals.com/charts/copper_historical_large.html

(Disclaimer: I am not an economist. However this is the logical path I underwent when doing the systemic analysis of my lifestyle while considering factors such as sovereignty, self-reliance and homesteading/permaculture)

I'm also with Foxx on this one. I apologize if my earlier post misled you regarding my opinion. What I was pointing at is that investment in general is a low-priority use of capital.

Copper is awesome. It is a highly useful industrial metal with solid demand. That makes it a great commodity, a physical asset with tangible value that is inherently infinitely more valuable than fiat.

But, if it is seen as a long-term investment as a poor man's precious metal, some points must be taken in account.

You want to be able to "sit" on it at your leasure. You want to be a strong hand, that is, an investor who is a master over his investment and for whom no external circumstances can force him to sell against his will. Weak hands, in comparison, will invest in a commodity and sell it as the going gets tough - either because the investment has fallen to a short/mid-term low (which is against investing logic yet an instinctual behavior) or because the weak hand's financial situation has become so dire that valuable long-term investments must be traded at a loss for short-term getting-by.

This implies that anything which will allow you to endure a hostile environment for prolonged periods will come beforehand. I have a chain of thought that goes along the following lines, where your capital should be assigned to the first question in the chain which gives you a direction, at least until you are reasonably satisfied about it.

The line of thought is:

• Do you have land/infrastructure that allows for your own food production?
• If not, do you believe investing in the skills/materials to attain food self-reliance is relevant to your situation?
• If not, do you have enough food stored to last for at least 3 months in a situation of short/mid-term upheaval? Does your situation allow you to stock up?
• If not, do you have enough liquidity on hand - cash, cigarettes, fuel, medicine, etc - to get you through such a period of upheaval, and allow you to trade for the food/supplies you need?
  
• By now, you should have answered yes to one of the above 4 questions. If that is not the case, you are not properly grounded and should first work towards establishing the solid foundations you will need going forward. Even if you answer yes, as you become stronger in the questions that will follow, you might want to revise and reinforce your foundations, for instance building up the potential for self-reliance during 6 months or even one year.
  
• Are there any other areas of your life - health, education, work, entertainment, etc - where you feel that you still depend on the system, and would you wish to repatriate that responsibility back under your sovereign control? If so, in what skills, habilities, training, books, tools, materials should your capital first be assigned?
• If you are comfortable with your answers to the preceding questions, then you can consider investing. Commodities that are not of direct importance to you become options, from consumables such as cigarettes or energy/fuel to stable assets such as land or precious metals.

Thus only you can do the analysis. Copper is a good asset with tangible value - which is better than any fiat currency can claim for itself. The question is, how relevant and pressing is it for your personal situation? You say you cannot do other investment/storage. Why is that? Should that be remedied first or are you comfortable with it?

For instance, I know that my food self-reliance is well-secured, as I live on a permaculture initiative and am very well connected to various intentional communities that are also very self-reliant, when not in overproduction mode. However, we know that our production potential can still be improved on. To this end - and considering that we already have all the tools needed to work wood, cement, metal and more - the logical step to take is to acquire the needed materials to build with. So we invested most of our liquid currency into structural steel for infrastructure expansion. In our case, this is the most efficient use of capital, while PMs would only be a passive capital sink that offers no return on investment, but rather only return of investment.

 

[dantem]

Had to Lol at that post, since I've just found, and laugh at, a 1 oz. shiny Copper Coin '.999 Fine' sold at an expo for 10 Euros. It was just somewhat bitterly amusing thinking that many people can hardly manage to buy 30-50 Euros Silver Coins by now, not to mention gold ones. Never seen such a kind of coin before, a clear sign of economic 'austerity'.

 

[Zadius Sky]

I personally am not sure that it's entirely useless and since copper is used a lot more than silver and gold, it could see better gains than the two. The only main issues I'd have with copper are that it's quite heavy/bulky as an investment and that it might rust (I haven't dealt with copper much in general, so I'm not sure that should be a concern for the next few years).

I used to collect old coins (of many different varieties) as a kid and have some understanding of the basic metals. I sold all of them in 2009 as well.

Interesting thing about copper is that it doesn't rust (this actually refers to a corrosion of iron as there is no iron in copper). Copper can corrode, though. Pure copper is a resistant material and cannot be easily broken down, but when exposed to air and moisture, it'll produce its own protective coating such as verdigris (green-colored layer). I can easily polish the verdigris off with salt/white vinegar - no problem. Some copper coins can have "stains" when in contact with other metals, though. However, any penny coin after 1982 can react differently than the pre-1982 because of zinc (which can also corrode, but dissolved in water over time or in acid in a short time - copper doesn't dissolve but protects zinc unless exposed).

In case you didn't know, the Statue of Liberty in NYC is made of copper and since 1880, it turned to green color like you see now:

_http://www.dailymail.co.uk/news/article-2037582/The-copper-Statue-Liberty-appeared-New-York-1880s.html

Copper is also mentioned in the Cs session:

Session 200801:

Q: What group mined the copper in northern Wisconsin, Minnesota, and Michigan, like in Isle Royale?
A: Aryans.
Q: What did they want the copper for?
A: Weapons.
Q: Wouldn't iron make better weapons?
A: Not in 4th density.

Session 230801:

Q: (L) What sort of 4th density weapons was copper used for?
A: Mostly conduction of EM energies.

This, of course, made me wonder what other reason why China would be focusing on mining copper like crazy in the recent years while the US is focusing on wars/deaths.

Thus only you can do the analysis. Copper is a good asset with tangible value - which is better than any fiat currency can claim for itself. The question is, how relevant and pressing is it for your personal situation? You say you cannot do other investment/storage. Why is that? Should that be remedied first or are you comfortable with it?

To briefly address my living situation - I live with my parents and I'm pretty much a guest (I've been living with them since 2009 and been trying to find a "real" job - I've been working temp after temp jobs since then). Silver and gold aren't allowed in the house nor any other "healthy" foods - it's their house. (Not even cigarettes are allowed - I keep my cigars in my car). I only have a half-foot square in the freezer for my meats and I buy my own meats on semi-weekly basis. Parents, no matter what I say or do, will never go for any meat or healthy food themselves - they're all about junk foods and wheat, and lately wines (a lot of partying for them). They're changing for the worse, lately.

So, I kinda figured that copper and nickel might be useful bartering in the future for whatever reason or being used for different purposes while silver and gold aren't the options for me at this point (as my funds are limited). Coppers/nickels are more wide spread while silver/gold are not. Being that they are cheaper and all than the actual PMs. Not that I would buy a ton of copper or nickel at once - just a little over time (just 1 one-ounce bullion coin of both metals, that'd be it). At least, that's the plan. Which is why I asked if they'd be commodious for an investment.

 

[Corvus]

For instance, I know that my food self-reliance is well-secured, as I live on a permaculture initiative and am very well connected to various intentional communities that are also very self-reliant, when not in overproduction mode. However, we know that our production potential can still be improved on. To this end - and considering that we already have all the tools needed to work wood, cement, metal and more - the logical step to take is to acquire the needed materials to build with. So we invested most of our liquid currency into structural steel for infrastructure expansion.

Maybe the good investment would be also buying some weapons not just for defense of supplies but for hunting also. You do not think you will be left alone when the mob or local gangs find out you are self reliant? What is a point of having it but not being able to keep it. It will depend primary on the level of structural failure but as the things are going in the west, especially USA it seems it will become very ugly. It is funny though how the tables turn in an instance. I remember when I was a kid and when the capitalism came my parents had very though time finding a job. I do not remember it all clearly but they do, especially my mother remembers the period of hunger, having a very hard time putting food on a table. While the USA was for years living of the back of other poor countries it is now getting it s payday in tenfold amounts.