Should I Stack COPPER?: Copper/Silver ratio (CSR) Severely out of whack?

[undeRGRoundMember]

OK, 20 Silver Dollars could buy a $20 Gold Piece (roughly ~1 Oz. Gold) which was 15.4 T oz. Silver.

It is currently 53.5:1 (Silver to Gold) as of market close 10/24/12

We all know this. Are you also aware that 100 COPPER CENTS was EQUAL to .77 T oz of Silver?

A copper cent weighs 1/10th of a Troy oz. so the old CSR used to be 136.7:1 CSR (or ~$1.29/oz Silver, or 129 cents) remembering that cents are 95% copper.

 

Silver Price per Avoirdupois Pound (~14.6 T oz/pound)  $464.72

Copper Price per Avoirdupois Pound…………………………………$3.57

 

NEW (current) CSR 130.2:1    OUT OF RANGE? Yeah, maybe a bit HIGH!

Traditionally, Copper is 136.7:1 with Silver.

Seems Copper is a slight bit “overvalued” as compared to Silver… 136.7/130.2= 1.05:1 or 5% overvalued (historically).

 

So let’s figure GOLD price per Avoirdupois Pound, to compare the traditional values for constitutional US Money:

 

GOLD price per Avoirdupois Pound: (14.6 x $1702.50)  $24856.50

Copper Price per Avoirdupois Pound……………………………………..$3.57

CGR (copper/gold Ratio) = 6962.6:1 CURRENT

Historic CGR ………………………2105.3:1 HISTORIC

 

Copper would have to increase by a factor of 3.3x over current prices (6962.6/2105.3) to reach “historic parity ratio” with Gold, whereas SILVER would have to go up 3.47x over current prices to reach ”historic parity ratio” with Gold.    3.47/3.3= 1.05:1 or 5% overvalued (historically).  Same as above, checking CSR directly to these calculations. The math checks out!

 

IN OTHER WORDS:

Copper is undervalued, (historically) but not quite as badly as Silver. (5% less undervalued)

HOWEVER, Copper’s market fundamentals DO NOT SUPPORT as huge of a “correction” as the market fundamentals of SILVER. Copper is much more plentiful than Silver, but also diminishing in supply and quality. If anyone is looking to stack Copper (in newly struck rounds or ingot form), I would strongly suggest they limit their exposure. I would suggest that copper, being a much more “industrial” metal than Silver, should be a much smaller percentage of one’s PM portfolio, if at all. Copper “rounds” (“coin” is a term reserved for legal govt. tender) are subject to a very high percentage PREMIUM, best I have seen is a 634% Premium using today’s spot price and a $1.69 per round price for a 1 oz Avoirdupois Copper Round (avoirdupois is 28.4 grams, Troy is 31.1 grams) which is SMALLER than a Troy Oz. precious metals coin or round, by weight. 23 cents worth of copper for $1.69 is not a good deal… Copper would have to appreciate over SIX TIMES to make these rounds worth what you paid. Remember, Copper is only 3.3 times under ”historic parity ratio” and the prices are already inflated, by the copper round fabrication costs. I spoke with JIM of (another mint, name withheld in respect of  ”The Doc”) that makes copper rounds, and all in all, it is a fair price for a Copper Round. I would LOVE for Silver premiums to be as LOW (per round) for Silver, but they are not. Unless you buy like 100 pieces. (or More!)

 

So what if you try to buy Copper Rounds in Bulk or Ingots? (by the pound)

 

Bulk Rounds, (not sure of quantity, but it is BIG) Premiums get down to $.99/each (plus spot $.23) but if memory serves, that is for 1000?  Cannot pull up the proper info, but the premiums are correct, if not the required quantities.

 

INGOTS:

I have seen these as low as $15/pound, (Usually Higher!) but when Spot is $3.57/pound, it’s still a NO DEAL.

I’d rather have a few overpriced Rounds, to make change for smaller Silver exchanges. But VERY FEW.

 

 

Oh well, this has a lot of facts, but some opinion, but I can tell you, the SURE THING in Copper Stacking is

sorting US Cents. I have been finding an average of 15 copper cents per roll of 50 coins. That is still a good 30% of .950 Copper, in a recognized US government minted coin, easy to identify and can still be had for FACE VALUE, not at a nominal 500-600%+ markup!

 

I stack COPPER, but I get mine at a Discount  ;)

• This topic was modified 7 months, 3 weeks ago by  undeRGRound. Reason: Corrected prices for copper "rounds". & the math

[silverbullionMember]

Excellent post to say the least. I’ve also discovered that it is best to get copper at a discount or free. I’ve got a shopping bag full of old copper coins that I’ve collected since I was a boy. It currently serves as a ‘decoy’ stash, but maybe it is time to count and record exactly how much copper I’ve got in my PM portfolio.

[CrissylMember]

If we go to a barter system and start using gold and silver again as currency then copper coins will be the main media of exchange. They will be needed as change for the silver and have been historically used as the dominate currency of the masses. Copper coin shortages have caused many disruptions of the currency system throughout history. Pre-1981 copper cents (and some 1982) are worth about 2 1/2 cents each, spot price. They are easily selling on ebay at for 1.6 cents each in quantity. Once the law changes on melting them, the market will pick up and they will be worth more as industrial copper. This will occur when the government thinks most of the copper cents have been purged from circulation. A roll of cents from the bank typically contain 20% of the copper (95%) cents from my observation.

[PowerBallMember]

If you have a secure warehouse then by all means load up on pre-1981 pennies.  Just realize the age old problem where someone can hold $10,000 worth of gold in their hand versus it would take a fork lift to move this amount of pennies.  Personally I would lean towards Canadian nickels minted between 1955 – 1981 which are worth $0.0725 each.  Sure not the 200% markup of the copper penny but will require much less space for storage.

 

[undeRGRoundMember]

@CRISSY had some good thoughts, maybe copper will stick with Silver in the Gold ratios, as Silver goes up. Hopefully! As for copper cents in rolls, I find ~30% but I’m in the midwest, less population density, and presumably less stackers of all types of coins.

@PowerBall, I’m not at all promoting Copper over other metals, Silver is easily #1 for investment upside, and Gold is the most dense in wealth storage (at the moment!) I thoroughly recommend a minimal exposure to Copper for change making in a PM’s money scenario. All the arguments tilt towards Silver, unless you have huge sums that need converted to hard and portable currency… Then GOLD.

@SilverBullion: Thanks! Good idea, using that in the “fake stash”. I’d substitute new “zinkies” now and stash the copper in with the good stacks  :D

 

 

[silver-nutMember]

I stack copper.  I go to the bank and get rolls to sort through and pull out the pre-82 and I have some copper rounds.  Not too many rounds due to the fact that copper will have to triple to make any money on them, but I like to keep a diversification.  But the copper cents are where its at.  I don’t have much in the way of a stack, like $9.00 face, but that will jump every week.  I can stack copper way faster than silver.  It is a long term thing for me, I know they wont be 5x face this year, but they are already 2x face.  And when the gov makes it clear that they are pulling them, and when we go the way of our friends to the north, there will be a copper coin market just like  the silver coin market.  With the creation of a copper ETF at JP Morgan, I can only guess that a copper investment now will pay off later.  To me, if JPM is opening a copper ETF, that means they see interest in the market.  It can be a jumping in place if silver gets too expensive and gold way out of reach.  Better to get in on the ground floor than on the 100th floor.  It is good to hold pennies due to the fact that if the price goes no where, I still have the face value, unlike my bullion rounds.

[undeRGRoundMember]

UPDATE:

Great Source for 1 oz avoirdupois copper rounds, small quantities for just over ONE DOLLAR FIAT per ROUND!

Larger Quantities for UNDER $1/Round!!!

 

BIGDOGCOLLECTIBLES on “the ‘Bay” or   bigdogcolectible@aol.com

Note the $.97 per round pricing at the 500 level. For a 28.x gram copper round, that is not bad.

Just listing this for those who like copper rounds, not suggesting an investment strategy.  I got

9 of these, all different patterns, for just over $10.

 
Price for 100 copper coins would be $104.00 shipping included I have 30 designs that you can pick from at that price.

Price for 200 copper coins would be $202.00 shipping included I have 30 designs that you can pick from at that price.

Price for 500 copper coins would be $485.00 shipping included I have 30 designs that you can pick from at that price.

If you want to order some coins I can send invoice from paypal.

heres pics of most of the 30 designs

Matt
Big Dog Collectibles

The designs I omitted are native American tribal designs! Very nice. Lost them in the cut/paste.

[undeRGRoundMember]

Good For You, @silver-nut

That’s pretty much what I do. Adds up Quick! I also find a good number of very shiny ones. These are kept separate. I find a few offset dies, and/or double strikes. Found 2 relatively shiny wheaties! One looks cleaned…

I’ma gonna sell the unsearched wheat cents on “the ‘Bay” and see what I can get. Got over 300 of those I believe. Should get a decent amount for those.

[silver-nutMember]

That’s who I buy from @undeRGRound.

[undeRGRoundMember]

@silver-nut:  FeBaY or Big Dog? Both good places, but Big Dog is the best for rounds! Super Quality…

 

[MaryBMember]

I keep all the copper penies I get in change along with whatever scrap copper I run across.

[RocketsRedGlareMember]

I did a comparison of AG to Cu from the 1913 price not to long ago.  If the value of a dollar has lost 97% of its value then 1$ is only worth 1 Cu cent. Therefore  in 1913 it cost our great grand parents 1 paper $ or 100 Cu cents to purchase 1 Ag dollar (24 Grams pure Ag).  A 97% devaluation of the dollar since 1913 means the Ag dollar price should be 97 paper dollars or 970 cents. But instead we can buy an Ag for 3o paper dollars or 3000 cents. If you use Cu penny weight (value of the Cu content by weight), it would cost 1000 Cu pennies to by 1 oz of Ag. That’s more that our grand parents paid!! I can’t think of anything but Ag that is 60% cheaper today than it was in 1913! And we don’t have to buy 90% & 24 grams Ag, we get 31 Grams of .999% Ag, which makes it more like a 70%  to 75% discount! Nothing Shines Like Silver, Nothing! I would buy Ag with paper 1st. Then to get more Ag use zinc pennies or any other fiat coin. Save your copper if you want but remember it isn’t worth what silver is and never will be.

[undeRGRoundMember]

Nice comparo, RRG. @RocketsRedGlare

@PatFields has a scenario where the govt. could back the USD in Copper (10 g/$) and that would make copper

right at $45 per Pound. (current ~$3.50)  Interesting Stuff!

 

Hi! @MaryB:

LOL, I raid the “take a penny” dish at cash registers. I do exchange them for zinkies…

I have this one place in a small town I drive thru to get to work, and they always seem to have an over abundance of copper cents in that dish. If folks only knew what they were doing. I foresee a day where we will wish we had done MORE of this coin roll hunting and nickel saving, etc. My wife thinks I am nuts LOL

• This reply was modified 5 months, 3 weeks ago by  undeRGRound.

[silver-nutMember]

What does everyone think a good stack of copper pennies would be?  When should I stop? $100 face? sell the rest after that?  Or just get all I can?

 

[undeRGRoundMember]

Well, I would keep stacking Silver, primarily. Then do several $ fiat each week in copper CRH.

The “zinkies” can be re-cycled occasionally, offsetting the costs of copper roll mining. I typically

find 30% copper in the rolls, give or take.  GET ALL YOU CAN!!!

[UglyDogMember]

Stacking copper is crazy.  You would need a warehouse to store enough physical copper to have an economic impact on your life.  A couple rolls of pennies is not going to save the day.

[silver-nutMember]

@undeRGRound.  I was planning on doing bout $25 a week in pennies.  This week obviously has been really busy, but I plan on getting back into it this week end.  I like to change up my banks.  I don’t want to go to the same one every time.  I think that would make them mad.  But I enjoy it and I only save money doing it.  LOL.  While all my friends are spending all of theirs.  I also stack silver.  Every week I get some.  Weather it is a Dime or an ounce I get me some.

[undeRGRoundMember]

I wish I had a close LCS that always had small Silver in stock. I had a guy who was really close, but many times he was sold out entirely, or I bought him out entirely

Bad thing was, he was closed down He was out a lot, with health issues. Someone who works there bought some hot items. They shut him down COLD. Seized EVERYTHING. Except the shelves and display cases  :(  :(

No more LCS

[undeRGRoundMember]

@UglyDog made this comment, found it below, must have gotten lost in the great By-and-By…

 

” Stacking copper is crazy.  You would need a warehouse to store enough physical copper to have an economic impact on your life.  A couple rolls of pennies is not going to save the day. “ Reply To: Should I Stack COPPER?: Copper/Silver ratio (CSR) Severely out of whack?

 

Some of that is true, takes a lot of copper to make a difference, but making change for Silver is a good reason… IMO

[silver-nutMember]

My LCS literally gets pallets of silver.  I always have a huge selection.  On top of 90% I get Barber coins from them, ASE, Maples, Bars from 1 oz to kilo bars, they sell 90% by the bag, along with all sorts of gold, platinum and palladium.  Next time I go I am going to buy a Peace Dollar.  I need to have one for my collection.  I don’t care really the quality, not completely worn, but nice.  They never seem to run out.  I am just waiting for them to start dealing in copper bullion.

• This reply was modified 5 months, 3 weeks ago by  silver-nut.

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