“If you find any of these coins floating around, you may want to begin saving them..”

Explaining Addison Wiggins' "Last Legal Currency Loophole in America."

By Travis Johnson, Stock Gumshoe, January 9, 2013

Well, we’ve already covered one non-stock idea this week (that was the “Phi Account” pitch about philatelic investments) … so we might as well jump right in and look at another. This time, it’s a lot easier and is based on pocket change.

And no, it’s not the same pitch for pre-1965 coins that have silver content, or for the oddball 40% “magic” silver half dollars that were teased by Dr. David Eifrig a few months ago … this is a tease for Addison Wiggins’ Apogee Advisory newsletter about coins that are actually in heavy circulation right now and easily available.

So what’s the story? Well, here’s a little taste to get you started …

“Simply holding on to these coins could be the safest (and easiest) investment idea we’ve found in the 32-year history of our business.

“And it turns out that it’s an idea that’s been hiding in our pockets the whole time.

“Here’s the thing… Chances are — if you’ve purchased anything in the past 24 hours — you’ve probably laid your hands on this coin.

“Looking in my own pockets, for example, I have three of these coins right now. You probably have a similar number in your pockets. Or underneath your couch cushion.

“And I bet you have dozens, even hundreds, sitting in piggybanks and coin jars around your house.

“What you may not know is how valuable this coin could soon become.

“In fact, when I first heard the projections of how it could double my money in the coming months, I laughed out loud.”

The basic idea is that you should start hoarding these coins because the current ones will be revalued in the marketplace after a projected future event that they think will happen soon — and they go back in history to give a few examples of this happening.

The examples you might remember are two fairly clear ones …

… in 1964, they changed the makeup of coins and effectively stopped backing the dollar with silver. Starting in 1965 quarters, half dollars and dimes were no longer made of 90% silver, and right away people started hoarding them, hoarding that continues to this day if you ever happen to come across one of these older coins. A beat-up 1964 dime is worth about two bucks, a similarly well-used 1965 dime is worth ten cents, so it just makes sense that you don’t see these coins in circulation any more unless you find an old piggy bank in the basement — almost all of them are being held and traded for their silver content, and this so-called “Junk Silver” has fueled many newsletter teases in the past. It is often the cheapest way to buy physical silver.

And in 1982, they changed the makeup of pennies to make them 97.5% zinc — they had previously been 95% copper. So as copper prices rose, some people started hoarding pennies. This wasn’t quite as dramatic as the silver switchover in 1965, but a 1982 penny does have enough copper in it that if you melted it down it would be worth about two cents — so people do hoard these and trade them as a play on copper. Actually, from time to time zinc prices spike, too, and have meant that sometimes the modern penny is worth more as a hunk of metal than it is as currency, though now the zinc value is down to about half a cent per coin.

The other example he gives is good ol’ Emperor Nero, who apparently secretly cut the silver percentage in Roman coins and spurred what may have been the first “coin hoarding” episode in history, in case you’re curious. Stock Gumshoe has an audience that tends to be relatively advanced in age compared to other websites, but even so I expect none of you remember that one.

So what’s next? Here’s a bit more from the ad:

“… the unique U.S. Mint “error” that I’d like to tell you about today…

“Unlike any other investment opportunity I’ve ever found, this one is the safest.

“There’s virtually no way to lose money on this.

“Next, it’s also 100% free of any costs.

“No commissions. No transaction fees. Totally free.

“Finally, it’s 100% anonymous….

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“And best of all, this little-known “error” allows you to potentially make an instant 14% gain.

“In the coming years, the gains could run as high as 228%-plus….

“And some of America’s wealthiest investors are piling in, too…

“Take Kyle B., for example.

“Kyle B. manages a hedge fund in Texas. He was one of the few that got the housing market bubble correct… making his investors 440%.

“What’s he doing with his money now…?

“You guessed it.

“He’s hoarding the coins I’ve been telling you about in this letter.

“He recently walked into his local bank… and exchanged dollars for 20 million of these coins.

“‘You really ought to call your bank and buy some now,’ says Kyle B.”

“The last time this loophole existed – more than 30 years ago – taking advantage of it could have made you a fortune…

“As Newsweek reported, ‘In every case, the [‘error’] caused the value of the original coin to skyrocket…”

So which coin is he talking about? Well, it’s the one that we almost never mention: the nickel.

Nickels are actually mostly copper these days, but there is meaningful nickel in those coins too — the modern nickel, minted from 1946 to the present, is 75% copper, 25% nickel. And it’s pretty large and heavy relative to its value, so that metal is worth just over a nickel now if you were to melt the coin down (which is not legal).

So right now, if you buy up 4,000 nickels for $200 you’ll actually be getting $207 (roughly) worth of “melt value.” That number has been both higher and lower in the past, as the price of those metals fluctuates on the commodities exchanges, but the “error” that they’re talking about is the mistake that the Mint has tried to rectify in the past: that they’re minting coins that are worth more than their face value, so they don&