WTF Nickel?

[Ichimoku]

Hi everyone,
I just watched a video where a guy talks about Nickels and Nickel and how Nickel might raise in value in the distant future. I thought OK why not, lets have a look at the price chart. And then I saw that:
http://www.finanzen.net/rohstoffe/nickelpreis/Chart

What's up with Nickel? I suppose it took a nosedive in 2007 because of the multiple crisis that surfaced at that time. But what caused the crazy bull run leading up to the 07 sell off?

[Viper_99]

I'm not sure but that is a big drop!

[harbl_the_cat]

Nickel's an industrial metal and during the GFC, all industrial metals got the beat down.

The more important chart I think too look at are the 10 - 15 year charts for most metals, especially ones used in circulating currency (Copper, nickel, zinc, tin). You'll see the prices are all substantially higher than they were 10-15 years ago.

The important take away, especially when you look at just the circulating currency of most nations is that with currency debasement, you have a massive increase in currency supply.

Canadian nickels are a great example of this, from 1946 to 1981, they were 99% pure nickel, until 2000, they were coprunickel very similar to US nickels, and after 2000 MOST nickels were fully debased steel (some were still copronickel).

If you just factor in how many were minted, multiplied by their face value, you can see how rapidly the money supply just in nickels has pretty much exponentially increased with debasement.

From 1946 - 1981 (35 years), $87 million worth of nickels were minted
From 1981 - 2000 (19 years), $79 million worth of nickels were minted
From 2000 to 2011 (11 years), $105 million worth of nickels were minted

The fact of the matter is that so long as the Canadian dollar exists and is accepted as a currency, these nickels will STILL chase after goods and resources. By exponentially increasing the supply of this currency, it all but guarantees the purchasing power of the currency will decrease in an inverse exponential fashion, and thus the price for various commodities (in Canadian dollars) will similarly rise and stay high.

Unlike paper (or plastic) notes, coinage pretty well lasts forever. In 2000 years, a nickel coin from 1946 will probably be as recognizable as a nickel from 2012, and as long as people are willing to exchange goods and services denominated in currency, these coins will be held.

I am very confident the same is true with US dollars/nickels as well.