When’s a cent not worth a cent?

When it's worth almost 1.85 cents.

Political Calculations commented on my calculating melt value post and led me to a neat site called Coinflation.com.  This site tracks the melt value of common U.S. currency.

As you may have noticed, metals recently have gone up in price sharply.  Gold and silver are trading at multi-decade highs, but base metals copper and zinc are doing better than gold and silver over the past five years.  Copper is up over 300% (now trading at about $2.75/pound) from about $0.60/pound in December 2001.  Gold is up “only” about 100% in the same time frame.  Zinc, the main component of Lincoln cents after 1982, is also up over 300% in the past five years.

So what this means is that a pre-1982 cent is actually worth almost two cents' worth of copper.  Zinc cents aren't far behind these days.  The U.S. Mint changed the composition to save money in the 1970s, but even this is catching up with itself:  A mostly-zinc cent is now worth almost 3/4 of a cent in metal content, according to Coinflation.

Gresham's Law states that “bad money drives good money out of circulation.”  Seen any quarters minted before 1965 in circulation?  Probably very rarely, if ever.  I haven't.  Those quarters are now worth over $2 each, thanks to $12 silver.  They've long been driven out of circulation.  Gresham's Law probably is in the relatively early stages of driving copper cents out of circulation.  You can still find quite a few of them (I've started sorting them) but it's clear that there are a lot more post-1982 cents in circulation.

Collecting copper cents for the metal may not be as widespread as collecting silver or gold coins.  The reason is that it currently takes over 200 pounds of cents to store the same dollar value as one ounce of gold, or over four pounds to match one ounce of silver.  It's just too darn heavy for what it's worth!

Anyone know any penny hoarders? 🙂