A Penny For Your Thoughts

According to coinflation.com , post 1982 penny thoughts only have a melt value of $.006 because these pennies are 97.5% zinc, not copper.  With copper at $4.00 per pound, older pennies have a melt value of $.026.  Glancing over my shoulder at a not very full gallon jug of pennies I've had for years, it's obvious hoarding pennies is not an effective response to fiat money.  Penny wise and pound foolish as they say.  On the other hand, not carrying pennies around is a good way to stop excessive change from tearing holes in your pants pockets.  

There is more substantive news about the rise in copper prices.  Here's a five year copper price chart coutesy of Kitco:

Tom Lydon at ETF Trends suggests four reasons for the rise: 

1. Chilean miners strike.  Chile is the largest copper producer in the world followed by the US, Indonesia, and Peru.

2. Emerging market urbanization.  Copper wire for all those new high rise city apartments in China and India.

3. Bullish forecasts.  Speculation?  Yesterday's Barron's article  reflects the copper buzz.

4. Federal Reserve Quantitative Easing.  More construction activity means more copper usage.  I would add that as the Fed debases the dollar it contributes to the rise in copper prices.

Large copper producing copper companies are Freeport McMoran, Codelco, and BHP Billiton.  There are two ETF copper plays-- CU and COPX.  JJC is a copper futures exchange traded note (ETN).  Surpringly, copper bullion is in vogue.  Ebay has 571 "copper bullion" items for sale today including a 2010 16 oz .999 percent pure Maple Leaf bar for $10.99.  At today's prices, you will need a huge amount of space to store copper as compared to gold, or even silver, for that matter.  Nonetheless, a physical copper ETF seems a certainty.

Copper is an ancient metal as man's usage goes back thousands of years.  Ruling out chemistry class with Doc Harrington, my first recollection of copper was at the bazaars in Adana, Turkey in 1970.  Here young boys used hammers to pound and shape the metal into beautiful pieces just as had been done for centuries.  I wonder if Turkish copper smiths still make beautiful and useful treasures? 

2010 16 oz .999 FINE COPPER  BULLION BAR MAPLE LEAF