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Re: Nickels?

Posted: Wed Jan 10, 2018 3:28 pm
by Riggerjack
In large parts of the world gold is a more useful currency,
Where? I mean, today, with everything working as we are accustomed to them working, where is gold more useful than whatever works for local currency? I mean there is a conversion cost to get into a local currency, so, factoring an astounding 5% for conversion, where can you use gold at 95% of the usefulness of cash? The only way I could imagine this working would be Argentina, (due to the long standing currency crisis.) but you could use any other currency there cheaper than gold.

Gold is too easy to fake. Take an ingot of tungsten, electroplate in gold, and you have an ingot that will pass nearly every nondestructive test for gold. It's the right density, it sounds right, the right conductivity, even a touchstone and chemical tests will show it as gold. This uncertainty will always translate to a discount in real transactions.

The melt value of nickel doesn't have much to do with the value of a nickel. If you want to sell it for melt value, the buyer has to work out the costs of refining it from the alloy in the coins. Nobody runs a refinery for free. This seems like an awkward way to hold value, but, I imagine when things get bad enough, a 12 gauge full of nickels would be a persuasive argument...

There just seems to be this vein of wishful thinking running through the goldbug mind. For the record, I'll be trading giant jars of Adams peanut butter from Costco WTSHTF. We can compare notes after. I am certain that when bad things happen, I can get a nice profit on high density foods, and help my nieghbors. Trading them gold wouldn't do that.

Re: Nickels?

Posted: Wed Jan 10, 2018 6:59 pm
by Clarice
I understand the preferred currencies in post-Soviet Russia were the US Dollar and the Deutschemark. If you had a pile of either you could basically name your price for any good or service.

@unemployable: Just for the sake of historical accuracy, foreign currency was illegal in Russia in the very beginning of the 90-s as in "Use dollars - go to prison". However, you could pay a plumber with a bottle of vodka, settle with a babysitter in cigarettes, and barter a bucket of potatoes for 1 kilogram of sugar. Foreign currency was unknown. Personally, I wouldn't identify a Deutsche mark out of a line up of bills to save my life. :) Dollars and marks were too big to pay for daily necessities of life and too risky to invest on a bigger scale. That experience has left me convinced that there is a huge divide between your normal investments and SHTF contingencies. They are not the same. For me, nickels do not fit into either category.

Re: Nickels?

Posted: Wed Jan 10, 2018 7:14 pm
by Clarice
"I understand the preferred currencies in post-Soviet Russia were the US Dollar and the Deutschemark. If you had a pile of either you could basically name your price for any good or service."

@unemployable: Just for the sake of historical accuracy, foreign currency was illegal in Russia in the very beginning of the 90-s as in "Use dollars - go to prison". However, you could pay a plumber with a bottle of vodka, settle with a babysitter in cigarettes, and barter a bucket of potatoes for 1 kilogram of sugar. Foreign currency was unknown. Personally, I wouldn't identify a Deutsche mark out of a line up of bills to save my life. :) Dollars and marks were too big to pay for daily necessities of life and too risky to invest on a bigger scale. That experience has left me convinced that there is a huge divide between your normal investments and SHTF contingencies. They are not the same. For me, nickels do not fit into either category.

Re: Nickels?

Posted: Wed Jan 10, 2018 7:30 pm
by unemployable
Clarice wrote:
Wed Jan 10, 2018 7:14 pm
@unemployable: Just for the sake of historical accuracy, foreign currency was illegal in Russia in the very beginning of the 90-s as in "Use dollars - go to prison".
My understanding was the people who had the power to send you to jail for using USD could be persuaded otherwise... by flashing them a few USD.

By the way, I'm way ahead of y'all. Although from 1942-45 nickels contained no actual nickel.

Image

Re: Nickels?

Posted: Wed Jan 10, 2018 8:29 pm
by Riggerjack
In the late 80's my HS girlfriend went to Estonia. The hosting family traded rubles for dollars, allowing the capitalists to buy souvenirs, and the hosting family to buy Western goods, which rubles were useless for. They offered something in between the official exchange rate, of something like 2:1 and the street value of nearer 15:1.

The Soviet failure was such a mess because there was so little economic knowledge in the general population. For generations the only real currency was political connections, so it makes for a poor model for a failed state for US preppers. However it goes down, it won't follow that pattern.

Re: Nickels?

Posted: Wed Jan 10, 2018 9:45 pm
by Mister Imperceptible
@riggerjack

Thats exactly right, the dual properties of the US nickel as hard asset and fiat money. I like the tip about the cubic zirconium.

When I say SHTF, I mean this is relative terms. In failed states I doubt I can get good value for gold OR nickels. When zombies start roaming the streets, only food and ammunition will really be of worth. But with each stock market crash and the dollar devaluation that follows, I still like gold. In defense of jennypenny, gold is especially sacred in India, but save the American Indian (who isn’t a global player anymore) gold is revered in all cultures. It’s dense and I can sell it to rich people. The amount of prep required for a zombie scenario is the all-consuming thing that would define me, not accumulating US nickels.

I am concerned about tungsten and other gold fakes.

@Clarice

Ok, I might have to seriously think about having SOME alcohol, but if the US becomes a failed state, all bets are off and how can we really plan for that anyway?

Some wine and scotch should actually become more valuable with age! The most perfect excuse for a wine cellar I’ve heard from an ERE perspective.

@unemployable

Nice collection.

Alright, Rowland and Spitznagel arrived in the mail, time to further edumacate myself.

Re: Nickels?

Posted: Tue Jan 16, 2018 12:07 am
by fiby41

Re: Nickels?

Posted: Sat Jun 20, 2020 7:42 pm
by Mister Imperceptible

Re: Nickels?

Posted: Tue Sep 01, 2020 6:34 pm
by Mister Imperceptible
I redpilled someone regarding the goings on of human affairs.

He replied the following:

I asked Cumbies about the coin shortage.
They say Wells Fargo supplies Brinks who supplies them.
They can't provide coins because the machine that cleans the coins is broken and has no parts.
That's what they are told.

So banks are hiding behind Covid to hold coins out of system.
And like we said its also cost prohibitive to make them.

Covid is a cover for so many things :/

Re: Nickels?

Posted: Mon Mar 07, 2022 6:22 pm
by Mister Imperceptible

Re: Nickels?

Posted: Tue Mar 08, 2022 4:31 pm
by WFJ
LME is busting trades on Nickel. In a SHTF era, lugging around a heavy bag of anything is going to be like dropping honey on an ant pile, you won't get a few blocks.

Once one takes physical delivery of any commodity (even professional traders/hedge funds), selling the commodity will require an assay, which costs are variable. In a time of crises, the cost to assay commodities will spike or be infinite (imagine traveling to an assay in a Mad Max world where criminals would just sit in front of the assays office or follow any assay to your house) thus at best making any metal a good paperweight at worst painting a target on your back.

Silver is only down 80% over the last 40 years and up from $20/ounce in 1918 at the end of WWI to give a good idea of long term returns of semi-precious metals can be.

Re: Nickels?

Posted: Tue Mar 08, 2022 4:36 pm
by jacob
There was a short squeeze on nickel. A major Chinese bank and the London Merc is involved. Margin calls are being renegotiated (delayed) and trading has been halted. The current futures price does not reflect reality per se.

Re: Nickels?

Posted: Tue Mar 08, 2022 4:53 pm
by Mister Imperceptible
There are better ways to make money than the 4 figures I have made on the nickel trade but nonlinear visuals turn me on and it is interesting with regards to time preference/time value of money. You could also say that such charts are a barometer/harbinger.

If you visit the linked site you can see a list of coins with melt values far above their face value and they trade with reasonable spreads without assay.

Re: Nickels?

Posted: Fri Mar 11, 2022 4:06 pm
by WFJ
Those are prices today. When the SHTF, all prices will spike or services eliminated due to risk of theft The best way to survive some kind of dystopian world is to avoid it at all costs.

The other issue with using some metal for transactions, is that everyone along the supply chain will also have to adopt the same policies, farmer pays fertilizer in metal, farmer pays labor in metal, transporter is paid in metal, retailer is paid in metal, and on and on. This supply chain will collapse and there will be no goods to buy with your gold/silver/nickel/uranium. I have a friend who once believed the end of the world was near and put a lot of money in gold all over the world. I humbly asked him to explain to me how a private jet would get fueled so he could collect his bounty in a SHTF world, and still waiting for the explanation.

The LME case is interesting as the short seller has the nickel and will deliver the physical nickel, but margin call was issued due to margin requirements. This was a producer hedging the sales price. All this kind of "short squeezing" will raise the cost of producing all commodities and cause inflation to rip higher (maybe exponentially). Producers use futures markets as an alternative to borrowing to fund operations, if this gets more expensive, the end user will pay the price.