A friend has been bit by the coin collecting bug. Like another couple of people I know, he’s withdrawn substantial amounts of coins from the bank and searches them for treasures, like older coins, errors, and coins with precious metals. To date he’s already found a number of silver dimes and half dollars (around ten I think). That’s more than I’ve run across with my searching, so good on him.
Why is finding special coins a treasure hunt?
Throughout the past century in the United states, the purchasing power of a dollar has decreased by 95%. As a result, the price of commodities, like metals, has increased in terms of dollars. A coin, which is comprised of metals, has a fixed face value. At first the value of the metal in a coin is small compared with the face value of the coin. But, as inflation drives up the price of the metals, the value of the metal content approaches, and then exceeds, the face value of the coin.
Three things typically happen as this occurs. First, a significant portion of the citizens begin holding on to these coins rather than spending them. Second, the composition of the coin is changed to cheaper metals (debasement) so that the coins can be minted again for less than face value. Third, anti-melt legislation is put into place to prevent wholesale destruction of the coins for profit. Then, as Gresham’s Law runs its course, the “bad money” drives the “good money” out of circulation either into private holdings or back to the government. The melting ban is typically lifted once the good coins are all but gone.
Silver coins have already been driven out of circulation in the US. They haven’t been minted in quantity for almost 50 years. The law that forbade melting silver coins was repealed in 1969. High copper content coins are still in the process of being driven out. The composition of the cent was changed in 1982 from 95% copper to 97.5% zinc (a cheaper metal). Right now there is a market on eBay for junk copper cents above their face value. It is illegal to melt the coins, as well as export the coins in any appreciable quantity. Both copper cents and nickels contain metal that now costs more than their face value.
Hunt for the coins, or just buy them?
Since I’ve only found a very small number of silver coins just in my pocket change, and I haven’t really gotten a lot of winners from the times I have withdrawn coins in bulk from my bank account, the payoff to hunt through a bunch of coins for what winners might be there isn’t worth the time to me. Sure, I can get $2.40 worth of silver for 10 cents if I find a silver dime in my loose change or in a box of rolled dines that I got from the bank. But spend 2-3 hours, potentially, to find it? Then my time is worth only a buck an hour for that transaction. Why not pay $120 for a roll of them, and save myself 100 hours of work?
That’s not the only factor though. My friends like the thrill of the treasure hunt. One of them “needs to be doing something” even while watching TV, so this fills that need. And even if the treasures are only a few, and far between, sometimes the treasures are whoppers. Another friend found that the stash of half-dollars he was looking at was almost completely silver! Dozens and dozens of half dollars, each worth at least $5 each. Happy days are here again.
It all boils down to the tradeoff between time and money, and whether or not the hunt is enjoyable or not. If plowing through rolls of coins isn’t enjoyable, then just buy the coins you want and spend time doing things that are enjoyable. But if the thrill of the hunt is fun, go for it!