Welcome to Coinflation: A guide for coin prices and values.
  Measuring the Metal Value of Coins – Base Metal, Gold, and Silver Coins

  Home  |  About  |  Coin Calculators  |  Gold Coin Values  |  Silver Coin Values  |  Proof Sets  |  Countries

An Inflationary Effect: Gresham's Law Returns

Published October 8, 2004
Written by Alec Nevalainen

Mark today's date on your calendar. The base metal value of the pre-1982 copper cent has surpassed its purchasing power. Copper closed at 1.4875/lb making the 3.11 gram copper cent worth $0.01003.

The significance of the milestone may not be realized by a great number of people, but this is something tangible. You can manipulate the CPI and PPI, but this event cannot be ignored. People may soon discover that the change in their pocket is worth more than its denomination.

When I receive change back from a cashier, usually one out of four cents are pre-1982. That's why today is significant. There is a large supply of money in circulation that has a higher intrinsic value than purchasing power. For the first time since the late 1960's, we have another example of Gresham's Law going into full motion. No inflation? Coin hoarding is to high inflation as a sore throat is to a cold. Look at the late 1960s when we went off the silver standard. The U.S. mint decried coin collecting, refusing to print the "D" or "S" on quarters to identify where the coin was minted (Denver or San Francisco). Banks had coin shortages and limited dispersal to business owners only.

Inflation is an expanding money supply. An inflationary effect is higher oil prices. An inflationary effect is no one showing up to a government treasury auction. An inflationary effect is a base metal coin having more intrinsic value than purchasing power.

Want someone to understand the inflation situation? Tell them to look in their pocket.

Alec Nevalainen

Also on Coinflation.com:
Other Pages:

Advertising · Archives · Frequently Asked Questions · Privacy Policy

Connect With Us:

Follow Coinflation on Twitter

This material may not be redistributed. All rights reserved.
Copyright 2004–2024 Coinflation®, Collectors Universe.
All content on Coinflation.com is for informational purposes only.