Making money from money: the Nancy Drew Method

The other day I decided to venture out. Being susceptible to the odd Hungry Jacks binge, I took the 15 minute journey to get my hands on some flame-grilled action. For the record, Hungry Jacks’ meals are also a really solid excuse to use for being late to things. All you do is explain how that last whopper didn’t really sit well with your digestive system; then how that led to a prolonged trip to the bathroom, and you’re off the hook… no questions asked.

So after exchanging the usual formalities that go with buying a burger, I got my change and let it have a merry little jingle in my hand. Only this was no typical jingle-age. Somewhere in every free-market consumer’s subconscious lies an expectation of what loose change should sound like in your hand. If you need a prompt to recall this exact sound, imagine the spritely sound of a magical fairy train chattering along its little silver tracks. The only difference in this case was that all the fairies had left for the winter and instead, all I was left with was an empty clatter of coins. It was as if they were fakes. Had I become a victim of a sophisticated counterfeiting syndicate? Were these coins even real? Was I even real? Bewildered, I stood there clogging up the Hungry Jacks line completely unaware of the passing of time. My world was totally absorbed in jiggling the coins over and over and over, each time becoming more dumbfounded by the sound they made. After a probably very awkward 30 seconds of this I felt the heaviness of the stares being thrown at me like semi solidified curds of milk. Stop playing with money; just eat your burger… ok?

In true Nancy Drew-like spirit I felt an obligation to resolve the mystery of the coin jingling scandal. Eventually I narrowed the suspect coin down to a very lustrous 2008 five cent piece although to my slight disappointment there was no uncovering of any mafia moneymaking machines. The actual answer didn’t come until some weeks later when I was stumbling through some quasi-geeky online forums. They were discussing some rumors explaining how, due to the rocketing price of metals, the metal value of some of our treasured Australian coins has exceeded their face value. Effectively this means that if you were to hypothetically melt down a whole bunch of coins and sell them, you my friend, might be making some healthy economic profit. As of late there has been much talk over the meltdown of the world financial systems and with desperate times calling for desperate measures, it may be time for a meltdown of the world’s financial coins. The catch? Well, there isn’t really a catch, except for the fact that in this country (and many others) it is of course illegal to melt or export coins of any denomination.

So what do all good governments do in this situation to protect their seigniorage? They change the metal composition of our coins! Oh -- snap! Move over Nancy, this young capitalist has just solved the mystery of the jingling coins. The reason they sound different is because they are different.

Or at least I thought. Sadly, upon further investigation I discovered that the Mint’s position was that if "any changes were to be made to Australia's coinage mix, the Australian public would be widely consulted to gauge potential impacts." according to a Mint spokesperson said *1. Don’t listen to what that guy has to say though, listen to what I have to say and what I say is; conspiracy! I was duped out of my 75% copper and 25% nickel five-cent coin for some fake sounding variant alloy. The thing I find most interesting about this is that the next best use for coins that exceed their face value is to simply spend it on all other things. As there is generally a high marginal benefit for making informed decisions, I leave ye with the following fact – that around March 2008, the metal value of a 10c piece was around 12c, which means that for 100,000 coins you somehow manage to gather together you would make a tidy $3000!

*The writer of this article neither endorses nor encourages the melting of any legal tender by other members of the general public.

*1 - (http://www.news.com.au/story/0,23599,23344414-2,00.html).