Overheard … #3

… that with sky high metal (read Nickel and Copper) prices, if you melt Rs 2 and Rs 5 coins and sell the metal (warning: this would be illegal), you may get more than what the coins are ‘worth’. Essentially, commodity value of these coins may be more than their exchange value! Surprised was I, but quick googling told me that our government knows. They recently allowed the mints to melt these coins and launch new ones with cheaper base metal!

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7 Responses

  1. wow,
    Good way of making money or as economists say – muliplying effect of money

  2. Isn’t this how Dhirubhai first made money in Turkey? Apparently there were some silver coins in currency at that time whose intrinsic value in London bullion exchange was slightly higher than the face value. So he used to buy huge quantities of these coins, melt them and sell them at the London exchange. As he had said, “margins were low, but it was money for jam”.

  3. Nice piece of info… Time to dig into my piggy bank ;-)

  4. Couple of years back, people started collecting 20 paise coins (which had lotus at the tail side) by paying more money & they claimed they needed the brass metal in it.
    Later till yester years I see those 20 paise ornaments being sold at higher rates, heard they don’t fade away & carries the glitters of gold. A kind of gold bargain for those who can’t afford for real yellow metal!

    Was remembering those 1 paise, 2 paise coins which my grandpa had, they were quite heavy compared to the 2 rupee one which we use know.

  5. Thanks guys.

    @ Mohan, never knew that story about Dhirubhai!? Any credible source?

    @ Veena – I have one of those paisa coins (though my grand-mom), heavy indeed.

  6. sb: http://en.wikipedia.org/wiki/Dhirubhai_Ambani
    [
    In the 1950s, the [Yemen|Yemini] administration realized that their main unit of currency,the Rial, was disappearing fast. Upon launching an investigation, they realized that a lot of Rials were being routed to the Port City of Aden. It was found that a young man in his twenties was placing unlimited buy orders for Yemini Rials.

    During those days, the Yemini Rial was made of pure silver coins and was in much demand at the London Bullion Exchange. Young Dhirubhai bought the Rials, melted them into pure silver and sold it to the bullion traders in London . During the latter part of his life, while talking to reporters, it is believed that he said “The margins were small but it was money for jam. After three months, it was stopped. But I made a few lakhs. In short, I was a manipulator. A very good manipulator. But I don’t believe in not taking opportunities..” [2]
    ]

  7. even the u.s. penny (one-cent) is currently worth more than one cent!

    – s.b.

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