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Thread: The History of Pincher Processing LLC

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    Default The History of Pincher Processing LLC

    *** Entire story and pictures are in the first post now. ***

    I've decided to document publicly the history of my partnership, Pincher Processing LLC. Pincher was the first company in the USA to commercially sort and remarket brass cents (to my knowledge). BTW, I call them brass cents because that is their alloy -- 95% copper and 5% zinc. This is the highest grade of brass. Copper does not have stable characteristics when pure, so the alloy is necessary especially for circulation coinage.

    In early 2006 coinflation was reporting that brass cents were worth about $0.025 each. This got me thinking about a process to sort them commercially. Because the brass cents weigh 3.1 grams and the zinc cents weigh 2.5 grams I chased the idea of using gravity for some sort of mechanical separation. I abandoned this idea because any such machine would be too tedious and slow.

    About this same time Ryedale began developing his sorter and I watched with great anticipation his demonstration videos. I started crunching numbers to determine the ideal scale for my business. Originally I anticipated frequent trips to all of the local banks to retrieve their full penny bags at face value and to return for deposit the zinc cents after sorting. I envisioned a row of 12-20+ Ryedale sorters in my garage at which I would spend a couple hours per day feeding them with a bucket of pennies and a scoop. At this scale the numbers didn't work out to make it profitable enough. Also, the supply side was just too thin.

    So I started thinking about commercial sorters because of their ability to process large amounts of coin automatically. I was thinking about modifying a sorter and blending it with the insides of a Ryedale sorter. I had contacted several companies to get volume specs on their machines, and my lucky break came in the form of a phone call from a De La Rue salesman one day when my family and I were eating lunch at A&W in Berthoud, CO.

    After explaining that my goal was to use the machine purely for the purpose of processing pennies (I didn't say anything about sorting for metal content), he said, "Ya know, I've been talking to another guy in Philadelphia who wants to use one of our machines to separate out the copper pennies."

    *** (jaw hits the floor) ***

    Me: "Can your machine do that?"

    Him: "Well, we have this machine, the Mach 9CDE (stands for "Coin Detection Euro"), that was designed for European banks to be able to off-sort anything that isn't a Euro coin. It uses conductivity to test the alloy of the coin and rejects anything that isn't within a certain range of tolerances."

    Me: "How many coins per second can be processed?"

    Him: "Well, it is a bit slower with the coin-detection feature on, but I think it will do 50 coins per second."

    Me: "How much?"

    Him: "It is an expensive machine."

    Me: "How much?"

    Him: "Are you sitting down?"

    Me: "I will if you want me to, but HOW MUCH?"

    Him: "$12,500"

    Me: "How soon can I have one?"

    In my mind I had already calculated that processing at that volume the machine would be paid for in ONE WEEK... or a month in worst case.

    Once I knew I had the equipment to do the job I knew I had to have a few things:

    First, I needed a partner. I was pastoring High Plains Independent Baptist Church in Milliken, CO, at the time (a church I started from nothing). My idea was to pastor full-time and have Pincher Processing on the side to supplement much-needed income. I wanted a partner who would actually do all of the manual labor (sorting and maintenance) while I managed the business side of things. I had a friend who was a fellow investor and an appreciator of precious metals. I sat down with him and we made a deal that we would both loan Pincher Processing LLC $10,000 of our personal capital. I offered him 25% of the business, but instead he opted to use his $10,000 infusement as a purchase rather than a loan in favor of a 30% stake in the company. He is a great friend to this day, and we still talk about this fantastic adventure.

    Next, I needed a coin supply. A HUGE coin supply. According to my calculations we could process about $12,000 per day, or $60,000 per week with one machine. So I put some phone calls out to the Denver area armored car services. I was invited to meet with Mark (director of coin sorting) at Brinks in Denver. He gave me a tour of their facility, then proceeded to tell me that they had more coins than they could get rid of because they processed everything from Coinstar (the green machines in grocery stores, etc.).

    Great! I'll take the pennies! Not so fast... Brinks doesn't actually own any of the coin. They facilitate coin deposits for banks. They are a vault service, and ONLY BANKS are allowed to actually "own" the coin processed by Brinks. This presented a challenge. In fact, when we finally started processing we were the only bank customer allowed to drive our trailer into the brinks facility and pick up coin directly.

    Mark at Brinks explained that Coinstar deposited all of their coins with US Bank. This left me no option but to approach US Bank. I needed $60,000 in pennies per week. It was an unusual request, and it was elevated to the upper levels of their corporation (the dark under-belly of slimy US banking). At first they were really unsure if they wanted to do business with me. They were worried about their reputation if word got out that they were helping someone destroy pennies. Eventually they presented me with an offer that included fees that were outrageous -- $6,000 per month in deposit and withdrawal fees. All this IN SPITE OF THE FACT that we were providing them a service by returning the zinc cents bagged in official bags for deposit at the Federal Reserve bank at our own cost! What could we do? And they knew it.

    If I could have I would have gone straight to Coinstar, and I tried. But unfortunately I needed the pennies sorted out of all of the coins, and Brinks did that on behalf of their customer, US Bank.

    US Bank set us up with a vault account where I would call in every night to order the coins I wanted to pick up the next day. We made a contract with Brinks that permitted us to back our trailer (20' gooseneck) into their loading bay to receive $12,000 in pennies (4 bulk bags on steel skids). We built custom bracing on our deck to receive and lock down the feet of these steel skids, and it proved tricky to set them on their precisely at first, but eventually it became doable. Brinks had told us that the entire process of off-loading, reloading, and strapping the load had to be done in 15 minutes. This was the most stressful part of every day. I had to back that 20' trailer up a ramp and through a single garage door into pitch dark while Mark stood guard with pistol in hand. It took me a while to get that right on the first try.

    I had a partner; we had a machine; we had a coin supply. We just needed someone to buy all of our brass cents.

    Our testing had shown that we could yield at least 25% on our sorting. This would mean in a typical week we could do a little better than 4 tons of brass cents. Who needs 4 tons of brass per week in the form of pennies?

    My research led me to Casper, Wyoming, and a foundry called Ex-Cal. It was (and maybe still is) owned by two brothers who moved the company out of California to get away from all of the taxes and regulation. They were older successful men, and very intrigued by us young'uns who had the gaul to try to do what we were doing. We had an appointment for a presentation. I made up a Powerpoint and my partner joined me for a road trip from Fort Collins, CO to Casper, WY.

    The plant manager, Joe, proved to be our advocate, and really gave us a hand up. The presentation went well, but they balked when I said I wanted 92% of the melt value. They came back at 85%, and so we had a deal. We agreed to deliver a 1 ton sample as soon as possible so they could do a test melt. They were hoping to be able to melt it down and use it directly in their castings in place of the very expensive high-brass alloy they were buying. In the end this proved to be impossible because too much of the zinc evaporated in process, and they were not set up to do professional smelting. Instead, they started sending it to a smelter and were acting like a middle man. Joe came to us after a short period and introduced us directly to their smelter, but I'll save that part of the story for later.

    De La Rue sent us a Mach 9 CDE for $12,500, and it was quite the day when we got it into our newly rented warehouse! (Later we would add a second machine for redundant sorting to guarantee purity.) I had picked up a sample bag of pennies from the local bank, and we set to work trying to program the alloys. This proved to be quite challenging. De La Rue did NOT want to give us ANY information about the programming of the machine. From their perspective only their techs should have access to the programming.

    Under our service contract we had techs out several times, and finally one of the techs gave us the secret button sequence to access the programming menus. Later he also let us look at the technical manual (TOP SECRET according to De La Rue) and he also showed us how to flash the Bios with jumpers on the board. This became necessary because the dust from the coins would short circuit the board and freak the entire machine out. De La Rue sold us a $100 exploded diagram of the machine with part numbers.

    The only part that failed on us continually (think every two weaks) was the rotating solenoid that would "eject" coins that didn't meet with the programming specifications. Those little pennies would actually wear a groove right through the steel to the point that they would slide past without being ejected. We could tell when our yield suddenly dropped off. Eventually we bought a second solenoid ($125) and would rotate the two in and out every couple weeks to have them fill welded. The repair shop was giving us the hardest Rockwell they could without making the part brittle, and they were quite surprised at how quickly we were wearing through it. Oh well, it was part of the maintenance. We paid $40 per repair and just made swapping it part of the plan.

    It was this very problem that brought me together with our Philadelphia competition over the phone. The name of the place was Antares Metals, and they started operations a couple months after we were rolling. From what I heard, they started on a larger scale that we did (5 machines), but they had a larger supply source. The salesman from De La Rue asked if he could give them my number because they were having this problem. When I got the call I didn't give out much... any... information. I figured we each had to solve our own problems. That's business.

    Additionally, we discovered that the duty cycle was about 45 minutes. Eventually the sensor would load up with dirt and short out causing ALL coins to be ejected. This would contaminate our product and cause for tedious hand picking them out of the box. This could be prevented by disassembling the entire machine and cleaning the sorting disks with 409 every hour. We could do this in 15 minutes, so the machine would run for 45 minutes every hour.

    Back to the business side of things. When we first started sorting we didn't know about "the float." This is the difference (in time) between the recording of a withdrawal and the recording of a deposit. Come to find out, US Bank would debit our account the day before we picked up the coins ($12,000 per day) and would credit our account for the coins we returned 2 days after they were returned. This made for a 3 day float. When we first started up things spiralled downward quickly -- at one point our checking account was overdrawn by $60,000! They worked with us on this until we could get the cash flow balance out. Just another way the banks take advantage of you.

    Our yields were consistently 27.5% brass. We had just enough supply to run $60k-$75k. Every morning I would take my Dodge 1 ton and goose neck trailer and back it into Brinks. Mark would unload the zinc pennies I was returning (less than 3 skids) stacked with $3,500 of pennies in sealed $50 bags. All of the bags were stamped "Pincher Processing" and bagged according to Federal Reserve Policy -- because that was where they were being transferred. Then Mark would put 4 steel skids with $3,000 bulk material handling bags onto the trailer (@ 4 tons), and I would strap them down.

    Later Mark told us that the Federal Reserve accused us of trying to cheat them because the skid weights were about 200 pounds less than they should be for $3,500 in pennies (IIRC). He actually had to break open our bags and count them for the Fed to prove that we had counted them correctly. The difference was merely that they were all zinc cents instead of 75/25.

    Brinks was nice enough to give us a large hopper with a sliding door on the bottom to feed our machine. You can see in the pictures above that we set the hopper on custom made legs that locked into the steel skid onto which we set our primary sorting machine. We would have to lift a $3,000 bulk bag by the straps with the forklift, and untie the shoot in the bottom of it to fill the hopper. Then the hopper would have to be CAREFULLY set on top of our sorting stand. This was tedious for a while until we got a feel for it. Only twice did we actually spill a ton of pennies on the floor (literarlly). You have no idea how hard it is to pick them up.

    Friday was pay day. After returning from Brinks I would unload the new coins for sorting and load my trailer with 4 tons of brass cents and start the haul to Casper, WY. The truck had to be registered with the DOT and I had to have a commercial license. This meant all of the pain of driver logs and weigh stations as well as the port of entry into Wyoming. I was always a little leary of getting snoopy Troopers at the port of entry, but my biggest problem came from a local Sheriff -- think Roscoe P. Coltrain.

    I was cruising along merrily with the truck pegged to the speed limit when I see a very angry cop in an SUV next to my truck with lights blazing and emphatically gesturing for me to pull over. He came to the window and said, "I WAS FOLLOWING YOU FOR 2 MILES! WHAT TOOK YOU SO LONG TO PULL OVER!" Honestly -- it was the middle of the prairie in Wyoming, I was listening to Rush Windbag on the radio, and I had no visibility out my back window because of the trailer. There was no traffic, so I hadn't been watching my side mirrors. Anyway, he calmed down and told me to take my rig to the next exit.

    All he wanted was to do a standard DOT inspection, but there is a problem. Actually many problems. This is my second load I'm hauling to Casper, and I DESPERATELY need to get my $25,000 pay check into the Casper US Bank before 3:00 p.m. in order to have enough cash to order coin for Monday. I was already running down to the wire, and this guy decides to give me a 45 minute rectal exam. In the end he told me that he found 3 major violations that give him the right to shut me down, BUT... out of the goodness of his heart, and seeing that we were brand spanking new to this he gave me a "fix it" list and sent me on my way. With his ego well-fed I was back on the road. I got to US Bank at 3:45 p.m, but one blessed cashier hadn't yet closed out her drawer for the day!

    Dealing with the Federal Reserve we hit a few roadblocks also. Come to find out, they would only keep $100,000 in pennies on hand. If they already had that much then they wouldn't take our pennies and we would have to stockpile them and wait to return them. It was a real pain, and hard on the float, but at that point were were revolving a much larger cash flow, so we could handle it.

    Joe at Ex-Cal called me and said he had someone who wanted to meet me. It was the owner of the smelter the got their stock from. Joe brought him down from Casper, and we had breakfast together at Johnson's Corner on Interstate 25 at Johnstown, CO. He waxed eloquent about his fabulous business success and immense marketing connections. He talked about bygone days when he had been involved in off-sorting and melting Canadian silver quarters. He told lots of stories. Lots. In the end he said, "Why don't you guys come out to California and we'll talk about partnering." Joe was handing us off. He really had our best interest in mind and felt that we could have better success without him in the middle.

    My partner and I, along with our attorney and accountant, took a day trip from Denver to LA and back that night. We toured the facility, heard a lot more stories, and wondered where it was all going. Basically, he wanted a 50/50 partnership. He would put up the capital ($11,000,000 line of credit with US Bank to which we had direct access), and he would be grinding up the coins and shipping them around the world as a working alloy. So we started hammering out a joint venture agreement. We made several drafts and e-mailed them to him, but he wouldn't commit. He wanted to split the proceeds (the difference between face and intrinsic value) 50/50, but we demanded that the PROFIT be split after our operating costs were factored in. Here the story gets sticky.

    I got into a bind with my truck. I had purchased a 2003 Dodge Cummins truck with remaining factory warranty on it, and within the first few weeks I noticed that it was down 8 quarts of oil! It seemed to be running OK, but I was noticing oil spray on my trailer. After shutting down for a week to have Dodge to the repairs I was informed that it needed a new engine. Fine. It's under warranty. The new engine came in, and the day they were going to install it a rep from corporate came into the shop and told them that it wouldn't be covered. According to them it "failed due to neglect." They said it was run without an air filter (sand blasting on the turbo showed this). I said it didn't matter, but the filter in the truck had been installed by the dealer from whom I bought it UNDER WARRANTY. Long story short, they wouldn't cover it, so I had them put the truck back together, but its days were numbered.

    Anyway, it was about this time I was trying to get the guy in CA nailed down on a Joint Venture agreement that my truck died. All of a sudden we need a lot more capital than we had on hand. We need to start taking delivery from Brinks of $75,000 semi-truck loads. We also needed to start sending $75,000 truck loads each week to California. We needed Tim and his $11,000,000 line of credit. So I started doing business without anything besides e-mails in writing. Bad move.

    When the zinc cents hit $0.011 we decided to melt ALL of the pennies down. Even though we would take a slight loss on the value of the metal we ended up saving several thousand dollars per month in bank fees by not returning them.

    We only sent 5 truck loads before my SHTF. But we hadn't been paid for any of those loads. We had withdrawn the supply coin from his line of credit. We had also paid our expenses from his line of credit. Over the phone he had said that he was going to cut us a check after year end. He even sent me a stack of papers from his receiving department showing the total weight of the shipments as well as the LME going price when they were received.

    I'll never forget 12/14/06. It was 6:00 a.m. and I was laying in bed after my alarm had gone off. My phone rang, and it was my attorney, Kelly. She said that she was watching Bloomberg and just saw that the director of the US Mint, Ed Moy, had issued a formal ban on the "treatment, melting, and export" of US pennies and nickels. I hung up the phone and told my wife, "It's all over."

    We had just bought a 5-acre farm near Johnstown, CO, and were selling a house in Fort Collins, CO. In other words, we "owned" 2 houses (actually, we owned 4 mortgages). I can't describe the sick feeling I had in the pit of my stomach.

    Then the phone rang again. This time it was my friend from De La Rue.

    Him: "Did you hear the news?!"

    Me: "Yeah, sounds like were done."

    Him: "No, did you hear about Antares Metals?"

    Me: "No..."

    Him: "Federal agents showed up there this morning to close them down and send everyone home."

    Great. Not what I wanted to deal with at that moment. It was only 6:30 a.m. in Colorado, and my partner wouldn't be at the shop until 7:00 a.m. I called him -- he was on the road. I told him to turn around and go home. We didn't want to have to talk to big brother.

    I really hadn't seen it coming. We had talked about the fact that it would likely be made illegal in the future, but we had done our homework and knew that we were engaged in legal enterprise. We suspected that congress would learn about us, Antares, and others and pass a law banning the melting of coins. But knowing how congress moves we estimated that we would have at least 6 months from rumor to law. What we DIDN'T KNOW was that in the early 1970s, as a rider on some bill during the last inflationary scare, congress had already given permission to the director of the US Mint to ban the export and destruction (chopping, melting, whatever) of any US coins at any time without prior notice.

    Bam. We were blind-sided. Up to that point my greatest fear was a collapse in copper prices. In fact, we had talked about hedging using COMEX contracts to lock in our prices for the near future.

    Later that fateful day (12/14) my partner and I got together to talk over our options. We had downloaded the official text of the edict by Ed Moy (http://www.usmint.gov/pressroom/inde...release&ID=724).

    Our first plan of action was to reason with the Mint (ha!). I explained how that we WERE NOT negatively affecting the amount of pennies in circulation because often the Federal Reserve would turn us away because of a surplus. They replied that it may be the case in Denver, but other places like San Diego had a coin shortage. I said that we would gladly help them alleviate shortages throughout the nation by sending our zinc cents to the Federal Reserve Bank that most needed them. That got nowhere (it made too much sense). Finally I suggested that we should partner with the mint to cull out the brass cents and replace them with zinc/steel cents. THEY would get the metal value of the copper pennies and we would just charge them a fee for sorting. Their response? "That isn't how it works. First congress has to come up with the idea, pass a bill authorizing us to do so, then shop for bids officially." Bureaucracy.

    My next plan was to argue with the Mint (just because I wanted to). I told them that the reason the Constitution specified that only gold and silver should be used for coins is that the underlying assumption is that the person who owns the coin owns the metal in the coin. GET THIS, GIM... UNDERSTAND IT CLEARLY... they responded, "The bearer of the coin is entitled to the face value that the coin conveys, but the actual coin is the property of the US Treasury, issued by the mint to facilitate commerce." In other words, that handful of coins in your pocket? It belongs to THEM as an instrument of exchange, and you merely have the right to exchange it at face value in the marketplace. How does that change the way you think about 90% and numismatics?

    The chief counsel of the US Mint was kind enough to send us a letter explaining that we were not in violation of any law, and in fact, we were completely free to continue sorting the coins. They just couldn't be chopped, melted, or exported.

    I started thinking about the 100 tons of pennies that I had already sent to California (5 trucks with 22 tons each). He was going to settle up with us in January, but what was the status of all of those pennies? I called to talk it over. He is slippery, and I couldn't nail him down on anything, but the gist of our conversation was that all of the pennies were still on his dock, but he would be damned if they didn't vanish in a few days. I told him I didn't want any part in breaking the law, and I reminded him about the exact wording of the press release. I wouldn't talk to him again for several weeks when it would be time to "settle up."

    Finally my partner and I continued mulling it over (still 12/14), and settled on a solid plan. We would contact the Royal Canadian Mint and propose a partnership. Canada does things differently. In Canada, the RCM not only mints the coins, but they maintain the circulation and ownership of those coins. The RCM is also a "for-profit" business that is wholly owned by the Canadian government. They are possibly the world's most advanced mint, and they make coins for many different countries.

    I put a call in to Manon LaPlant, the director of circulation coinage. She called back and we had a pleasant conversation about our business model. I suggested that we could partner to help them reclaim valuable alloys and replace those coins with newer coins made of steel. She was very intrigued by the idea, and asked me to send an entire proposal. We got to work on it right away.

    Before I could make a proposal I had to know more about the percentages of certain alloys in Canada. After doing a little preliminary research I realized that 3 alloys had been used for pennies (brass, zinc, steel), and 3 alloys used for nickels (tombac, cupro-nickel, and pure nickel). The pure nickel coins were worth nearly $0.25 each, so we decided to include nickels in our proposal.

    I needed a sample to analyze with our machine. Ah! I never told you what the De La Rue Mach 9 CDE measures! Here it is:

    Surface Frequency
    Surface Volts
    Core Frequency
    Core Volts

    We would get a sample of 20 coins of a known alloy-year that were very clean and run them through the machine to get an exact average of these numbers. Then we would adjust the machines tolerances until it could perfectly separate the alloys without being too lax or too picky. It was AMAZING once it was tuned (took a little voodoo). It could run 50 pennies per second with PERFECT accuracy. Under these circumstances it was kicking out 13 brass cents per second. I'll never forget that wonderful clatter. Once in a while, when it started getting dirty, we could actually here zinc cents starting to "clink" down the chute. We got very good at spotting a zinc cent on the pile of brass cents, but you had to HURRY if you heard one or it would be burried. (Interestingly enough, I'm sure I once saw a 1909 Lincoln cent plop into the pile, but before I could snatch it up it was burried.)

    Anyway, I found someone who would send us a box of rolled pennies and a box of rolled nickels. As soon as they arrived my partner and I met at the warehouse to analyze them. I was armed with information from reliable sources like Wikipedia and the huge book of world coins. Both let me down. We found ourselves scratching our heads because we couldn't get a sample group of 20 coins that would consistently give us the numbers we needed for the machine. Finally, I decided we needed a BIG magnet. I went down to Murdock's in Longmont and picked up a construction-site magnetic sweeper (the kind on wheels). Back at the shop I dumped all of the pennies on the ground and spread them out perfect flat. Then systematically I went over the lot of them with the magnet until none would jump up. Then we set to sorting those steel pennies by year. WE WERE SURPRISED. We had pennies that were magnetic, and pennies that were not magnetic for the same year. We ended up having pennies that were zinc and pennies that were brass for the same year. And in both cases it wasn't because it was a change-over year. This was the case for a year or two, then skip a year, then another year. It was obvious to us that the RCM had no qualms about using multiple alloys multiple years. Additionally, we found some alloys that were completely unknown to the world coin book or any Internet source.

    By the end of that day we had built a comprehensive table of years / alloys for pennies and nickels. Armed with that information I started writing up my proposal. In Canada, all of the circulation coinage MUST be rolled before being returned to the RCM for recirculation. This means that the transport and treatment fees for pennies would almost cost HALF of their face value! And the commercial institution bore this cost. (I did some research with armored car companies up there). I realized that any proposal would have to include rolling the coins and boxing them. About this same time I got a call from the De La Rue tech. He said that he had picked up a massive coin conveyor from a Colorado casino (Bushwackers) that had converted to tickets. This conveyor was meant to feed 5 coin wrapping machines using a recirculating belt system that kept each of the machines constantly fed from a LARGE hopper. On the bottom it had a conveyor and lift system to take the wrapped coins to a table for boxing. We ended up buying it from him for $1,500 (original cost was $60,000). As far as I know, that conveyor is still sitting in a barn on my farm near Johnstown, CO.

    My proposal was for 10 sorting/wrapping stations. We would sort all of the coins brought to us, re-wrap the ones they wanted to keep, and send the others to be smelted for them. We just wanted a flat % of face value. The contract would have been worth $15M/year to us (but overhead would have been much higher because of employment costs and the need for a large facility). After they received the proposal at RCM we had a conference call with them. They loved the idea, but unfortunately the board of directors wasn't ready to do it. Their biggest concern was that they didn't currently have the capacity to replace coins as quickly as we could remove them from circulation. I suggested that they might consider expanding -- it would pay for itself quickly. But they had just finished an expansion of their minting facilities, and the directors wanted to make sure that they could keep the new larger facility occupied before further expansion.

    In the end, I was told that they looked forward to working with me in the future -- especially if Canada decided to eliminate the penny. WOULDN'T THAT BE THE CONTRACT! It was looking more likely in 2007 than in the deflationary environment we are in now.

    The next week after 12/14 was a sad week. We went into our warehouse to "un-sort" $75,000 in pennies. All of it was boxed on pallets ready for a truck to California. It took us an entire week to feed those pennies back through the machine and into bags to be deposited at the Fed. I felt like I was was holding my own funeral. To make matters worse, we got a massive blizzard (38" of snow), and had to wait a couple weeks to get a truck in their to return the pennies.

    Of the mistakes I made running Pincher Processing, this is the one that probably cost me the most -- like the last 5 years of my life. I'm a trusting person; I'm an honest person. Because the coins had been withdrawn on another company's line of credit I returned the coins for deposit on that account -- not ours. At the time we had just purchased our second sorting machine on our business credit card ($12,500) and were running a balance of $25,000 on our SBA line of credit. We also were paying off a loan on our forklift. We had $42,000 in debt that hadn't been settled. I was waiting for the guy in CA to settle up with us on the 100+ tons of pennies I had sent him. I wish I could go back and change the account into which that $75,000 was deposited. Even if all I did was settle our debts and send him the balance.

    I called in mid-January to find out when we could expect to receive our share of the profit. His response was that he didn't know what profit I was talking about. According to him he had a loss on it, and he was hoping we could reimburse him for his loss. Whatever. I realized I was completely at his mercy, and I had been whipped. I thought about suing, but I wasn't sure how I'd explain how I thought he had melted them all after the ban. In the end I let it go, and left him to God.

    Because my church, High Plains in Milliken, CO, was being heavily subsidized by Pincher Processing they took a huge hit also. By second quarter we had to slash the budget by 50%. I went from seeing $50,000/month in business profit (most of it unrealized), to living on $300 per week. There was no money for the mortgages, so I started getting nasty threats. I received a letter from the now-defunct Countrywide Mortgage that they were foreclosing my house in Fort Collins and were intending to sue me for a deficiency of $100,000 (this was the beginning of the housing collapse, so values had really fallen and I couldn't even get a short-sale buyer). My realtor strongly urged me to see and bankruptcy attorney, and in September of 2007 I was granted a Chapter 7 discharge.

    The next couple years we got by with just enough to live on. We got a sizable tax "refund" both years and were able to set aside $10,000 to buy 5 acres of land on my wife's family farm in Wisconsin. In 2009 we decided to retreat, regroup, and start over. That's where we are now.

    After we moved to Wisconsin our business debt had taken a sudden jump in interest rate and payment amount due to a change in law. My partner didn't want to continue making the minimum payments (I was paying 70% of the payment, and he was paying 30% -- minimum payment was all I could do), so he cashed in some investments and paid off the remaining $22,000. He was even willing to forgive me my portion of the debt ($15,500), but I couldn't let him take on more of his share than we agreed to, so I have been paying him back (interest free) ever since. Next month, when I get my tax "refund", I will finally pay off the last $3,250 that is my share of the debt, and Pincher Processing will be behind me.

    I can't describe the thrill of what we were doing. It was insane. Every day was an amazing adventure for the 8 or so months we operated. Nobody could believe we pulled it off. I still have a great deal of satisfaction in knowing I took and idea and made it very profitable... for a short time. I only wish I had benefited from the profit. In hindsight I learned several lessons from the experience that should make me a wiser person:

    1. Always operate financially as if disaster is right around the corner. Don't assume that you can take a risk and get away with it. If I would have managed our personal and business cash flow more defensively we would have walked away with a small profit (less than we deserved, but more than nothing).

    2. Business is business, and if it isn't in writing it doesn't mean anything no matter how nice you want to be or how much you like the other person.

    3. PAY YOURSELF FIRST. Make sure you cover your bases before trusting someone else to treat you fairly.

    4. Even attorneys can overlook something significant. Get a second opinion.

    Have you ever seen Robert Kyosaki's BI Triangle? I've spent a lot of time looking at this chart to figure out how we failed. I think it was on 2 levels: Legal and Cash Flow. Legal really hurt us, but Cash Flow could have been managed to give us a safety net.
    Attached Thumbnails Attached Thumbnails Set333_01.jpg   Set336_01.jpg  

    Set336_02.jpg   Set337_02.jpg  

    Set337_01.jpg   bi_triangle.jpg  

    Last edited by <SLV>; 01-02-2013 at 07:51 AM.

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    Default Re: The History of Pincher Processing LLC

    *** ALREADY INCLUDED IN FIRST POST ***
    Last edited by <SLV>; 01-02-2013 at 07:51 AM.

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    Default Re: The History of Pincher Processing LLC

    When you gonna finish the story SLV? I'm really enjoying the read

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    Default Re: The History of Pincher Processing LLC

    Glad you are putting it to digital paper SLV.

    I have told your story many times and am interested in learning the details I missed.

    I am sure that you are in a better place now than in December 2006.

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    Default Re: The History of Pincher Processing LLC

    Last I heard you moved to Wisconsin?

    I still have those silver coins btw...
    "...a Republic, if you can keep it!" Ben Franklin

    Derivatives are contracts whose value is derived from stocks, bonds, loans, currencies and
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    I'll try to write another segment once I get the kids to bed. I thought it was important to document what we did because it was so unusual and not many people know about it. I decided not to keep back any of the details. In the past I've only spoken generally about the experience, but I don't see what it can hurt to lay it all out there.

    I'd like to say we are in a better place than December of 2006... and maybe we are "better for it." But we are still recovering from the set-back. I should be paying off the last of my debt from Pincher Processing next month. That will be a great day!

    We have been living in Wisconsin now for 3 years. We are near La Crosse. This is where my wife and I are from originally.

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    Default Re: The History of Pincher Processing LLC

    Did you build your homestead on the five acres?

    You were converting an old outbuilding into a home, if I remember correctly?

    Admired your ambition.

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    Default Re: The History of Pincher Processing LLC

    The next chapter will have to wait until morning -- my wife has other plans for my evening.

    Quote Originally Posted by BeefJerky View Post
    Did you build your homestead on the five acres?

    You were converting an old outbuilding into a home, if I remember correctly?

    Admired your ambition.
    I'm not sure I admire my own ambition.

    Yes, we are converting a granary into a house. I found a newspaper on the wall dated 1869. Now It is on a new basement foundation. Windows are in and stairs are in. I'm ready to do roofing and siding as soon as spring comes around. My goal is to move in at the end of this summer. I'll start another thread detailing our homesteading progress after I finish telling this story.

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    *** ALREADY INCLUDED IN FIRST POST ***
    Attached Thumbnails Attached Thumbnails bi_triangle.jpg  
    Last edited by <SLV>; 01-02-2013 at 07:52 AM.

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    Default Re: The History of Pincher Processing LLC

    Great reading - like an exciting novel!

    The fact that you even tried to do a business that involved the Federal Reserve, US Treasury, Banks, and and a smelter with an $11M line of credit shows brass balls.

    Education is expensive, but there is another equally important lesson: Success is the ability to go from one failure to another with no loss of enthusiasm.

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    Default Re: The History of Pincher Processing LLC

    Wow. Thanks <SLV> for writing and posting this info. This is most interesting:

    "they responded, "The bearer of the coin is entitled to the face value that the coin conveys, but the actual coin is the property of the US Treasury, issued by the mint to facilitate commerce." In other words, that handful of coins in your pocket? It belongs to THEM as an instrument of exchange, and you merely have the right to exchange it at face value in the marketplace. How does that change the way you think about 90% and numismatics?"

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    Default Re: The History of Pincher Processing LLC

    I forgot to mention that the RCM was stunned with our table of alloys I provided with the proposal. They knew that it was not public information that they had experimented with other alloys in certain years. We made a big impression by demonstrating our ability to sort their coins.

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    Default Re: The History of Pincher Processing LLC

    BTW, there is $92,000 in pennies in the second to the bottom picture. When we were revolving semi trucks we would have $150,000 in pennies on hand at any given time. That is 15,000,000 pennies, or about 30 tons of pennies.

    We weren't too concerned with security at our place, but we kept quiet about it. Who would steal a ton of pennies? What would you do with them that would be inconspicuous.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by fasTTcar View Post
    Glad you are putting it to digital paper SLV.

    I have told your story many times and am interested in learning the details I missed.

    I am sure that you are in a better place now than in December 2006.
    TT,

    If I remember correctly, you were the one that found us a buyer for our sorters. I can't remember exactly when we sold them, but it must have been at least 2008. I only got something like 10-15% of what I paid for them, and the second machine was still like new (but both worked perfectly).

    It was really hard to find a buyer because, according to the De La Rue tech, the Mach 9 CDE is only used in major international banking centers. We had the only machines he had seen in Colorado.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by <SLV> View Post
    TT,

    If I remember correctly, you were the one that found us a buyer for our sorters. I can't remember exactly when we sold them, but it must have been at least 2008. I only got something like 10-15% of what I paid for them, and the second machine was still like new (but both worked perfectly).

    It was really hard to find a buyer because, according to the De La Rue tech, the Mach 9 CDE is only used in major international banking centers. We had the only machines he had seen in Colorado.
    Yep, that was me. I talked to a bunch of different people about them and ended up matching you with Will.

    Funny thing is, 4 years later, I own 2 Mach 9 CDE's that I paid more than you sold yours for.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by <SLV> View Post
    GET THIS, GIM... UNDERSTAND IT CLEARLY... they responded, "The bearer of the coin is entitled to the face value that the coin conveys, but the actual coin is the property of the US Treasury, issued by the mint to facilitate commerce." In other words, that handful of coins in your pocket? It belongs to THEM as an instrument of exchange, and you merely have the right to exchange it at face value in the marketplace. How does that change the way you think about 90% and numismatics?
    Very interesting. May need to change forms. Thanks, Mark
    Life is a coin, you can spend it any way you want but you can only spend it once.

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    Default Re: The History of Pincher Processing LLC

    Just was this thread for the first time. Wow! Thank you for putting yourself right out there and eloquently sharing your experiences!
    Truthfulness - Benevolence - Forbearance

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by newmisty View Post
    Just was this thread for the first time. Wow! Thank you for putting yourself right out there and eloquently sharing your experiences!
    I thought the story deserved telling on GIM since it was here that the idea was born.
    For behold, the day is coming, burning like a furnace;
    and all the arrogant and every evildoer will be chaff;
    and the day that is coming will set them ablaze
    so that it will leave them neither root nor branch.
    Without prejudice. All rights reserved

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    Default Re: The History of Pincher Processing LLC

    wow, thanks for posting.

    aside from trusting, i think the only thing you did wrong was you bit off a lot before it was tested - i.e. start small. but sometimes in life you have to swing for the fence or you will forever regret not trying.

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    Quote Originally Posted by Fiat Metaler View Post
    wow, thanks for posting.

    aside from trusting, i think the only thing you did wrong was you bit off a lot before it was tested - i.e. start small. but sometimes in life you have to swing for the fence or you will forever regret not trying.
    That's a tough call. I evaluated it as an economy of scale, and in order to be profitable you had to achieve a certain volume. There wasn't much difference between that volume and going "all out" (based on the amount of work necessary. I have to say that I've never felt so alive as I did when we were sorting 4 tons/day.
    For behold, the day is coming, burning like a furnace;
    and all the arrogant and every evildoer will be chaff;
    and the day that is coming will set them ablaze
    so that it will leave them neither root nor branch.
    Without prejudice. All rights reserved

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    That is one amazing story!!

    Ever think about writing a book about it someday?

    R.
    "Walk the gold trails of my good friend, do I. On my feet are "strong sole" of thick leather, purchased with much knowledge of physical gold. These shoes not go bare before our journey is done. On trail I see your "thin sole" gold investments cast aside and scavenged by beasts." - ANOTHER (THOUGHTS!) (04/14/01; 18:08:54MT - #: 51887)

    Personal best on calm water: SAE - 32 skips. GAE - 21 skips.

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    Quote Originally Posted by Ragnarok View Post
    That is one amazing story!!

    Ever think about writing a book about it someday?

    R.
    Not specifically. Everything I have to say about it I said in this thread. Perhaps it will make it into my autobiography...
    For behold, the day is coming, burning like a furnace;
    and all the arrogant and every evildoer will be chaff;
    and the day that is coming will set them ablaze
    so that it will leave them neither root nor branch.
    Without prejudice. All rights reserved

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    Default Re: The History of Pincher Processing LLC

    I have to say that I've never felt so alive as I did when we were sorting 4 tons/day.
    Those that spend their whole lives being time card punchers, will never have that feeling of putting it all on the line.
    Wish we were neighbors.

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    Whoa! I'm just now reading this for the first time <SLV>. What an incredible read, though unfortunately things did not go as planned. FWIW, sharing your story here may have helped others on their own journey although that doesn't make your mistakes any less painful I'm sure.

    Btw, I was asking about you roughly a year or so ago here on GIM2. I remember reading your homestead thread on GIM1, but I thought you were SLV/GLD or something like that. I was really wanting to hear what happened to your homestead as that thread really sucked me in. The last update I read you were fretting about the fact an inspector had just told you that you would need to have the grainery inspected since you had physically moved it. I guess it's been a couple years or more since then so is it safe to assume things worked out?

    Again, many thanks for taking the time to document your journey with pincher processing.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Fiat Metaler View Post
    wow, thanks for posting.

    aside from trusting, i think the only thing you did wrong was you bit off a lot before it was tested - i.e. start small. but sometimes in life you have to swing for the fence or you will forever regret not trying.
    The above sounds a lot like my first marriage.

    Seriously though, I have nothing but admiration for the OP as he has been in the arena in a big way.
    AND, unlike the majority, he is willing to share ups AS WELL AS downs.
    Unlike the many many many people who never seem to lose in the "Vegas" of life.
    If ya know what I mean and I think ya do.

    Regards to all.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by cpthnsolo View Post
    Whoa! I'm just now reading this for the first time <SLV>. What an incredible read, though unfortunately things did not go as planned. FWIW, sharing your story here may have helped others on their own journey although that doesn't make your mistakes any less painful I'm sure.

    Btw, I was asking about you roughly a year or so ago here on GIM2. I remember reading your homestead thread on GIM1, but I thought you were SLV/GLD or something like that. I was really wanting to hear what happened to your homestead as that thread really sucked me in. The last update I read you were fretting about the fact an inspector had just told you that you would need to have the grainery inspected since you had physically moved it. I guess it's been a couple years or more since then so is it safe to assume things worked out?

    Again, many thanks for taking the time to document your journey with pincher processing.
    I've got updates on our homestead in this thread: http://www.goldismoney2.com/showthre...d-solar-set-up.

    It is considered "new construction," and it has been a challenge to make the old building conform to current building codes. This fall I finished the garage (wood stove, drywall, insulation) as well as the lean-to for our goats on the back of the garage. All of the electrical has been roughed in, and we are running on off-grid solar. Right now I am soliciting bids for the plumbing rough-in because it must be done by a licensed plumber. I'm hoping to get the plumbing installed in February so I can continue with insulation, drywall, and flooring in the house. My revised move-in date is July 4th -- when the ground is ready we'll have to install well and septic this spring. I want to try to get the inside done as much as possible during the winter.
    For behold, the day is coming, burning like a furnace;
    and all the arrogant and every evildoer will be chaff;
    and the day that is coming will set them ablaze
    so that it will leave them neither root nor branch.
    Without prejudice. All rights reserved

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by glockngold View Post
    Those that spend their whole lives being time card punchers, will never have that feeling of putting it all on the line.
    Wish we were neighbors.
    We were flying high for a while -- making a $24k or so sale every week. The we lost EVERYTHING. I had no idea it could take so long to get over loosing everything. I'm a risk taker by nature because I see how it COULD all turn out rosy... I'm a little blind to the other side of things. I try to remind myself of this now.
    For behold, the day is coming, burning like a furnace;
    and all the arrogant and every evildoer will be chaff;
    and the day that is coming will set them ablaze
    so that it will leave them neither root nor branch.
    Without prejudice. All rights reserved

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    Default Re: The History of Pincher Processing LLC

    Crazy story, figured this deserved a bump for those who haven't seen it.

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    Default Re: The History of Pincher Processing LLC

    Just the other day I remembered something that deserved to be added to this story for the sake of posterity.

    Right after we started processing and returning zinc cents (in Federal Reserve $50 bags stamped "Pincher Processing") we ran into a little snag with the Federal Reserve. Seems that they weigh their pallets of stacked coin bags ($3,500 per penny pallet) to verify the value, and because we had taken out all of the heavier brass cents the pallets were coming in a couple hundred pounds under their acceptable range. Mark, the coin manager at Brinks in Denver, had to actually break open several of our bags and count them for the Federal Reserve to prove that the value was correct. He explained that we were taking out the heavier coins.

    BTW... not sure if I've mentioned this yet, but Mark at Brinks told me that their sorting machines were already set up to remove all silver dimes and quarters and these coins were sold to a smelter to bump up the profit at Brinks. They probably got a nice little bit since they were handling the Coinstar account for US Bank.
    For behold, the day is coming, burning like a furnace;
    and all the arrogant and every evildoer will be chaff;
    and the day that is coming will set them ablaze
    so that it will leave them neither root nor branch.
    Without prejudice. All rights reserved

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by <SLV> View Post
    We were flying high for a while -- making a $24k or so sale every week. The we lost EVERYTHING. I had no idea it could take so long to get over loosing everything. I'm a risk taker by nature because I see how it COULD all turn out rosy... I'm a little blind to the other side of things. I try to remind myself of this now.
    Rosy would have been you being put into a federal penitenary. My tax dollars were used to fabricate those coins. I have an issue with anyone here who thinks that you were entitled to the raw materials used to create the coins. The only work you did was to destroy something that was not yours to begin with. Only a 'renter' or a socialist would think otherwise. You were certainly not acting as an entrepreneur.

    That melt value belongs to the taxpayer. Let the treasury melt the coins and use the profit to defray the cost of minting new coins. You got off easy.
    Grover Norquist (and his brother from the same mother, Dick Morris) is a son of a wh_ore

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Shortstack View Post
    Rosy would have been you being put into a federal penitenary. My tax dollars were used to fabricate those coins. I have an issue with anyone here who thinks that you were entitled to the raw materials used to create the coins. The only work you did was to destroy something that was not yours to begin with. Only a 'renter' or a socialist would think otherwise. You were certainly not acting as an entrepreneur.

    That melt value belongs to the taxpayer. Let the treasury melt the coins and use the profit to defray the cost of minting new coins. You got off easy.
    Are you saying you consider coinage to be the property of the government and not the bearer?

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Shortstack View Post
    Rosy would have been you being put into a federal penitenary. My tax dollars were used to fabricate those coins. I have an issue with anyone here who thinks that you were entitled to the raw materials used to create the coins. The only work you did was to destroy something that was not yours to begin with. Only a 'renter' or a socialist would think otherwise. You were certainly not acting as an entrepreneur.

    That melt value belongs to the taxpayer. Let the treasury melt the coins and use the profit to defray the cost of minting new coins. You got off easy.
    "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

    What is the point of having gold and silver coinage if the bearer of the coin is not the owner of the metal of which they are made?
    For behold, the day is coming, burning like a furnace;
    and all the arrogant and every evildoer will be chaff;
    and the day that is coming will set them ablaze
    so that it will leave them neither root nor branch.
    Without prejudice. All rights reserved

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Silver View Post
    Are you saying you consider coinage to be the property of the government and not the bearer?
    They are a medium of exchange. On a small scale, no harm in saying they are yours do with them as you please. I think the mint fabricates enough so that each person can hold a reasonable amount needed for normal transactions. And because piggy banks are not against the law, saving coins is ok as well. Because the contents of a piggy bank are normally exchanged for paper currency sooner or later

    But he was Melting them on an industrial scale, using flat bed trucks for transport. What if 100 like minded skimmers/renters decided to follow his lead, increasing the scale of their "business" by 10x every year? There would be no penny's or nickels left. But hey, not your problem right? Let the sucker taxpayers fund the reminting of more coins.
    Last edited by Shortstack; 07-05-2013 at 11:55 PM.
    Grover Norquist (and his brother from the same mother, Dick Morris) is a son of a wh_ore

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Shortstack View Post
    Rosy would have been you being put into a federal penitenary. My tax dollars were used to fabricate those coins. I have an issue with anyone here who thinks that you were entitled to the raw materials used to create the coins. The only work you did was to destroy something that was not yours to begin with. Only a 'renter' or a socialist would think otherwise. You were certainly not acting as an entrepreneur.

    That melt value belongs to the taxpayer. Let the treasury melt the coins and use the profit to defray the cost of minting new coins. You got off easy.
    That's an assumption I would not make...


    I don't assume my tax dollars go to pay for anything when the government is $70 Trillion in debt... and they have an unlimited line of credit with the FED...
    "...a Republic, if you can keep it!" Ben Franklin

    Derivatives are contracts whose value is derived from stocks, bonds, loans, currencies and
    commodities, or linked to specific events such as changes in interest rates or the weather.

    "Money is the future idea of value." Armstrong

    "Pretend inferiority and encourage his arrogance." Sun Tzu
    Be the change you want to see in the world. Gandhi

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Goldhedge View Post
    That's an assumption I would not make...


    I don't assume my tax dollars go to pay for anything when the government is $70 Trillion in debt... and they have an unlimited line of credit with the FED...
    Fair point, perhaps borrowing from China covered the minting costs. That makes it even worse.
    Grover Norquist (and his brother from the same mother, Dick Morris) is a son of a wh_ore

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Shortstack View Post
    They are a medium of exchange. On a small scale, no harm in saying they are yours do with them as you please. I think the mint fabricates enough so that each person can hold a reasonable amount needed for normal transactions. And because piggy banks are not against the law, saving coins is ok as well. Because the contents of a piggy bank are normally exchanged for paper currency sooner or later

    But you are Melting them on an industrial scale, using flat bed trucks for transport. What if 100 like minded skimmers/renters decided to follow your lead. And you all increased the scale of your business by 10x every year? There would be no penny's or nickels left. But hey, not your problem right? Let the sucker taxpayers fund the reminting of more coins.
    So you consider a large horde of SAE's or silver dollars or 90% coinage to be the governments property, ultimately, since these coins were produced at US Mints? You make an exception for small amounts, why is that, you either own it or you don't. Talk about a renter mentality.

    US coinage is the property of the bearer. The reason the coinage is melted is because the face value of the coin has been debased, the metal is now the value. That is how the market should work. You don't see people melting the Cupro-Nickel coinage yet, but when the face value is debased to the point of the metal being more valuable than the value as money, they will - and should.

    I was buying some stainless steel washers recently, the washers were .22 ea and about the size of a dime - I'm going to just drill holes in dimes next time I need stainless washers, cupro-nickel is good material.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Silver View Post
    So you consider a large horde of SAE's or silver dollars or 90% coinage to be the governments property, ultimately, since these coins were produced at US Mints? You make an exception for small amounts, why is that, you either own it or you don't. Talk about a renter mentality.

    US coinage is the property of the bearer. The reason the coinage is melted is because the face value of the coin has been debased, the metal is now the value. That is how the market should work. You don't see people melting the Cupro-Nickel coinage yet, but when the face value is debased to the point of the metal being more valuable than the value as money, they will - and should.

    I was buying some stainless steel washers recently, the washers were .22 ea and about the size of a dime - I'm going to just drill holes in dimes next time I need stainless washers, cupro-nickel is good material.
    SAE's are not even used for every day transactions, ever. How is it that you don't know that? How is it that you cannot differentiate between bullion ASE's and regular coinage?

    While silver dollars or 90% coinage may be used by ignorant people, most are saved. Their replacements were made 50 years ago, and contained no silver FYI. You won't see may people using morgan silver dollars for everyday transactions. And a "large horde" is not multiple flatbed trucks is it? And if someone did have 1 million face of silver quarters? Does not matter here because their replacements were made long ago.

    Yes, I agree common use coinage like copper pennies should be melted if the metal is worth more than face, but this should be done the Treasury, to help pay for the replacement coins. So if pennies are retired, the Treasury should be doing the melting, else the taxpayer (or borrowed funds) will be needed to pay for replacement coins.
    Grover Norquist (and his brother from the same mother, Dick Morris) is a son of a wh_ore

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    Default Re: The History of Pincher Processing LLC

    [QUOTE=Shortstack;571795]
    SAE's are not even used for every day transactions, ever. How is it that you don't know that? How is it that you cannot differentiate between bullion ASE's and regular coinage?
    SAE's are not used in everyday transactions because they have a face value of $1 - if they had a face value of $100 (that was honored), they would circulate, that is until the face value was debased where once again the metal was more valuable than the face value.

    You seem to be the one that can't differentiate between face value and metal value - but the bigger disconnect is you don't understand ownership, the government merely coins the metal but the bearer of the coin is the owner - and to think otherwise is the mental conditioning of a government subject.

    While silver dollars or 90% coinage may be used by ignorant people, most are saved. Their replacements were made 50 years ago, and contained no silver FYI.
    I wouldn't be so quick point fingers at ignorant people,since you don't seem to know the difference between owning and renting.


    You won't see may people using morgan silver dollars for everyday transactions.
    When Morgan's were minted, they were used for everyday transactions - again, until the face value was debased to less than the metal value (or collectable value) at which time people withdraw them from circulation. Coinage is not the governments to take from the people.

    And a "large horde" is not multiple flatbed trucks is it? And if someone did have 1 million face of silver quarters? Does not matter here because their replacements were made long ago.
    A large horde is relative - how about Kyle Bass buying one million dollars worth of nickles - how many flatbeds do you think that took? Do you want to take them away from him?

    Yes, I agree common use coinage like copper pennies should be melted if the metal is worth more than face, , to help paybut this should be done the Treasury for the replacement coins. So if pennies are retired, the Treasury should be doing the melting, else the taxpayer (or borrowed funds) will be needed to pay for replacement coins.
    I give up.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Shortstack View Post
    Rosy would have been you being put into a federal penitenary. My tax dollars were used to fabricate those coins. I have an issue with anyone here who thinks that you were entitled to the raw materials used to create the coins. The only work you did was to destroy something that was not yours to begin with. Only a 'renter' or a socialist would think otherwise. You were certainly not acting as an entrepreneur.

    That melt value belongs to the taxpayer. Let the treasury melt the coins and use the profit to defray the cost of minting new coins. You got off easy.
    WTF? Your ideas are coming from FARR left field.

    Perhaps you are only being passive aggressive in regards to SLV's other claims about state assistance. I personally find nothing ignoble in melting coins--> consider the 90% silver.

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    Default Re: The History of Pincher Processing LLC

    What part of "you cannot melt everyday circulating coins" did you not understand silver? I mean really. Your suggestion that ASE's are owned by the mint is really over the top. Again, these are bullion coins sold to the public at the current price of silver plus a minting premium. So the purchaser owns the bullion coins. What are you going to suggest next? That the government of South Africa owns my kruggerrands? Makes me think that you do not own a single bullion coin.

    Again, my position is that the government is being reasonable, and watching out for taxpayers like me, to the detriment of wards of the state like the OP (who told us how he lives on government subsidies). I don't mind my tax dollars going to truly needy people, times are tough and many are down with their luck. But to suggest that it's OK for a skimmer/renter to melt much needed common coinage in order to sell the metal to refiners means that you have no problem with an individual causing taxpayers to subsidize their 'business'.

    And Kyle Bass has no plans on melting his Nickel horde I am sure. If the treasury takes nickels out of circulation, and Kyle has them melted, then what he is doing is stealing from the taxpayers who originally had to pay for the raw materials and minting costs. If he did so, he would be the laughing stock of his peer group. And common taxpayers would not appreciate his actions either.

    And to compare Morgan Silver Dollars to common use pennies? That is simply over the top. Back when coinage was made out of silver and gold, it was understandable that people would take them out of circulation if the metal became worth more than the face value. But guess what, we are talking about nickels and pennies here, not historic numismatic coinage.

    I am done with you...
    Grover Norquist (and his brother from the same mother, Dick Morris) is a son of a wh_ore

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by WhyKnow View Post
    WTF? Your ideas are coming from FARR left field.

    Perhaps you are only being passive aggressive in regards to SLV's other claims about state assistance. I personally find nothing ignoble in melting coins--> consider the 90% silver.
    WTF???

    You really have no problem with someone using taxpayer dollars to subsidize their business? If self reliance is a "FARR left" trait than sign me up. And no, a self reliant person does not make money by melting common coinage on an industrial scale. Their "business model" relies on the US Mint replacing what they melted for a profit. So the US Mint will spend money re-minting the melted coinage, which will ultimately be paid for by taxpayers like me, or worse yet, through borrowings from China.

    I guess you FARR right 'renters' are fine with causing the US Mint to spend massive amounts of money to re-mint and distribute new coinage. What is not to love? It's free money for you right? Who cares if your actions cause your taxpaying neighbor to pay more taxes? Or they pay the same, but some veteran gets less in benefit payments because the US Mint has to re-mint coins to counteract the industrial scale melting of existing coinage. And make no mistake, there are many skimmers/renters like the OP, so if he started making money doing this, thousands would soon follow suit until the US Mint was running 24/7 making coins to replace the melted ones..
    Grover Norquist (and his brother from the same mother, Dick Morris) is a son of a wh_ore

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    Default Re: The History of Pincher Processing LLC

    Because we as taxpayers pay for fabrication of coin and currency, it is our right and the right of the representatives in our government to prohibit the melting of coin for profit of it's base metal. Likewise, the lifting of such a ban can certainly become law by decree at such a time when replacement costs are minimized and policing becomes cost prohibitive to continue. Common sense logic, IMO.

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    Default Re: The History of Pincher Processing LLC

    The US Mint is not a net expense for the citizens:

    The United States Mint (Mint) operates two fiscally separate programs: a circulating
    program
    and a numismatic program that includes both collectible coin products and
    precious metal bullion coins. The Mint enjoyed strong performance throughout fiscal
    year (FY) 2012 in both programs. Though revenue decreased in each program in FY
    2012, as a result of our continued focus on costs, we generated positive seigniorage
    in our circulating program and positive net income in our bullion and collectible
    coin programs

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Dude View Post
    Because we as taxpayers pay for fabrication of coin and currency, it is our right and the right of the representatives in our government to prohibit the melting of coin for profit of it's base metal. Likewise, the lifting of such a ban can certainly become law by decree at such a time when replacement costs are minimized and policing becomes cost prohibitive to continue. Common sense logic, IMO.
    The US Mint sells the coins it produces - once they are sold, they don't own them anymore.

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    Default Re: The History of Pincher Processing LLC

    Your logic falls down when confronted with the real world, as usual. Profits from the mint go back into the general fund. Since the government is operating under massive deficits, every additional contribution received from profitable agencies means less borrowing.

    I am done with you.
    Grover Norquist (and his brother from the same mother, Dick Morris) is a son of a wh_ore

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by WhyKnow View Post

    Perhaps you are only being passive aggressive in regards to SLV's other claims about state assistance.
    Quote Originally Posted by Shortstack View Post

    Again, my position is that the government is being reasonable, and watching out for taxpayers like me, to the detriment of wards of the state like the OP (who told us how he lives on government subsidies).
    Ahh, there was an axe to grind. I suspected as much.

    Your rhetoric is EXACTLY the same as those who confiscated gold, calling them "slackers" and hoarders. The ban on melting brass cents is very similar. Perhaps we renters should turn in our cents and pre-'33 gold??

    http://www.goldismoney2.com/showthre...light=slackers

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  66. Post #47

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Dude View Post
    Because we as taxpayers pay for fabrication of coin and currency, it is our right and the right of the representatives in our government to prohibit the melting of coin for profit of it's base metal. Likewise, the lifting of such a ban can certainly become law by decree at such a time when replacement costs are minimized and policing becomes cost prohibitive to continue. Common sense logic, IMO.
    Common sense would be not minting a coin that's face value is worth less than its metal value, or debasing the currency so that previous years coinage metal value exceeds face.

    Both the penny and nickel are cost prohibitive at this point and as such shouldn't be minted anymore. If someone wants to melt down the coins they lawfully obtained where the metal value exceeds the face value they by all means should be allowed to do so. If the government doesn't want this type of activity to commence then stop stealing the American peoples wealth through inflationary activities aimed at enriching select business men and corporations that control the government.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Tinbox View Post
    Common sense would be not minting a coin that's face value is worth less than its metal value, or debasing the currency so that previous years coinage metal value exceeds face.

    Both the penny and nickel are cost prohibitive at this point and as such shouldn't be minted anymore. If someone wants to melt down the coins they lawfully obtained where the metal value exceeds the face value they by all means should be allowed to do so. If the government doesn't want this type of activity to commence then stop stealing the American peoples wealth through inflationary activities aimed at enriching select business men and corporations that control the government.
    The govy stopped using so much copper in pennies because of it's cost years ago. I don't think that currency debasement created the higher copper price as much as the Chinese and other worldwide demand of the metal. If we went to 10% silver in dimes and quarters after the 40% years and then went through $6 silver, then $30, then $9, then $49, then today's $19, you think the govy can move fast enough to mix the correct percentage? Yes, pennies and nickels cost the taxpayer, but there's no reason to allow anyone to take advantage of the swings and cost the taxpayer even more. It's fabricated at a cost, it's legal tender, we paid for it; don't allow people to melt it for their own profit at our expense until it is decreed legal to do so.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by Dude View Post
    The govy stopped using so much copper in pennies because of it's cost years ago. I don't think that currency debasement created the higher copper price as much as the Chinese and other worldwide demand of the metal. If we went to 10% silver in dimes and quarters after the 40% years and then went through $6 silver, then $30, then $9, then $49, then today's $19, you think the govy can move fast enough to mix the correct percentage? Yes, pennies and nickels cost the taxpayer, but there's no reason to allow anyone to take advantage of the swings and cost the taxpayer even more. It's fabricated at a cost, it's legal tender, we paid for it; don't allow people to melt it for their own profit at our expense until it is decreed legal to do so.
    Dude, you're missing the point. Gold is Money! You are using FRNs to value the silver. While yes, that is how we do business now, it is unconstitutional. The mint should not have to be re-valuing our coinage on the daily swings of PMs, because everything else should be valued in gold and silver.

    Also, consider melting coins similar to removing them from circulation. Removing them is the same thing "slackers and hoarders" were doing for the past hundred years.

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    Default Re: The History of Pincher Processing LLC

    Quote Originally Posted by WhyKnow View Post
    Dude, you're missing the point. Gold is Money! You are using FRNs to value the silver. While yes, that is how we do business now, it is unconstitutional. The mint should not have to be re-valuing our coinage on the daily swings of PMs, because everything else should be valued in gold and silver.

    Also, consider melting coins similar to removing them from circulation. Removing them is the same thing "slackers and hoarders" were doing for the past hundred years.
    Bah, no time to explain. But just consider the fluctuations of silver and gold over the last 4 years.

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