Economics and investing commentator Peter Schiff, in the Tuesday episode of his Peter Schiff Show, suggested people consider an offbeat investment strategy — buy nickels. Indeed, Schiff suggests that this investment strategy is superior to the often touted as risk free option of investing in United States government bonds.
US bonds offering a four to five percent return that can be wiped out by inflation, argued Schiff in the episode, are “not risk free, not at all.” In contrast he asserted that “ironically, there’s one product that the government makes that’s risk free, and that’s the nickel.”
With copper making up 75 percent of each nickel and nickel making up the rest, the increased price of those metals over time has resulted, explained Schiff, in each nickel with a five cent face value having a just over fifty percent higher metal value. That, continued Schiff, means that when you exchange two dollars at a bank for a roll of 40 nickels you walk out with over three-dollars-worth of copper and nickel. “That,” concludes Schiff, “is a can’t lose investment.”
“You can’t lose” in this investment strategy, Schiff elaborated, because that roll of nickels will never be worth less than the face value of two dollars you pad for it — even if copper and nickel values crash. But, if copper and nickel prices rise an additional third you will have “doubled your money,” turning the traded in two dollar bills into roughly four dollars in metal value.
Watch here Schiff discuss investing in nickels in the Tuesday episode of his show.
Take a look as well at my August 19 article “Pennies Have Been Abandoned. Now What Will Be Done with Nickels?” to learn about how the situation with nickels having higher metal value than their face value came about and what the US government may do in response.
