Steadfast FinancesLong "The Nickel": Michael Lewis on The Colbert Report

Long “The Nickel”: Michael Lewis on The Colbert Report

Filed in Economy , Financial Crisis , Humor 8 comments

I’ve got just one word for you… just one word… plastics nickels.

Nickels are the next bubble: the metal content is now worth $0.07. If you melt it down, it’s worth 7 cents. One of the characters who made a fortune betting on the financial collapse of the system, is buying nickels. So he rings up his bank and says “I’d like to buy 20 Million nickels.”

- Michael Lewis

 

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Since that’s a 40% premium, looks like I’ll have to add nickels to my American Eagle silver coin hoard.

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Posted by CJ   @   2 February 2011 8 comments
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8 Comments

Comments
Feb 2, 2011
1:55 pm
#1 Tom :

Saw this last night and was wondering just how many nickels that is…

20,000,000 nickels
cost $1,000,000
expected profit margin $400,000

http://en.wikipedia.org/wiki/Nickel_(United_States_coin)
weight: 100,000,000 grams => 100,000kg => 110 tons
21.21mm across
1.95mm thick

http://ruk.ca/content/how-big-shipping-container
standard shipping container is 19’5″ x 7’8″ x 7’9.5″
5.91m x 2.33m , 2.37m tall (rounded down)
laid out on the floor 109 x 278 = 30,300 nickels
can fit 1215 nickels tall
=> one shipping container holds ~36,800,000+ nickels
(40 ft containers also available)

So all 20MM nickels will easily fit in one container but will weigh 110 tons. Looks like you’d need maybe 3 trucks to cart it away from the bank…? ( http://en.wikipedia.org/wiki/Semi-trailer_truck#North_America ).

Feb 2, 2011
3:25 pm
#2 Matt SF :

Yeah, not easy to accommodate this “trade” logistics wise. But if you have a million bucks to speculate in the metals market, plus the cojones to imply you’re going to melt down U.S. currency (which is illegal to destroy), something tells me logistics is a bit of an afterthought.

Still, for the Everyday Joe, and even the trader who prefers to stay liquid at all costs, this is beyond extreme. However, it is clever as hell in my opinion.

Feb 2, 2011
8:10 pm
#4 Matt SF :

Nice find, Phil.

Feb 5, 2011
6:23 pm
#5 Mark :

You don’t have to melt them you just have to hold onto them. You don’t have to melt them to sell them. US Silver coins are traded at more then face value everyday with no intention of melting. In fact they are one of the most trusted tradeable form of metal in the precious metals market.

Feb 5, 2011
6:24 pm
#6 Mark :

In fact for the expense of melting them when you are already in a trusted tradeable form I doubt traders would melt them.

Feb 5, 2011
6:35 pm
#7 Mark :

The only question is how long the US Mint will sell them at a loss.

Feb 14, 2011
9:58 am
#8 Jpo :

How long would the govt. continue a program that operates at a net loss? Perpetually.

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