Friday, February 08, 2008

Why Mint the Penny When It Costs 1.675 Cents?

CBS 60 MINUTES--Should the U.S. Mint continue to produce pennies and nickels whose metal content is worth more than their face value? Why mint the penny, when it costs $134 million to make $80 million worth of what most people consider nuisance coins (see chart above of rising copper prices)?

The situation irks Edmund Mony, the director of the U.S. Mint, who would like Congress to find a solution. “You can’t sustain losses on pennies and nickels and expect to be a viable organization that benefits the American people,” says Moy.

Is that really a bureaucrat talking!

Watch "60 Minutes" this Sunday night at 7 p.m. on CBS for the story.

9 Comments:

At 2/08/2008 6:53 PM, Anonymous Anonymous said...

Yes they should keep minting pennies and nickles it's the closest thing to real money we have.

OT

Year of "denial" in U.S. subprime crisis

By New Year, consensus formed that the subprime crisis would indeed spread beyond the mortgage and financial market and into the broader economy, and potentially beyond U.S. borders.

"More recently people realized the theory of decoupling was a fairytale, that the U.S. really is the world's economic leader," Shilling said. "There's still a lot of denial. The consensus is begrudgingly admitting we're into or close to recession, but the consensus is now that it will be over in the first half of the year."

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN0848216520080208?pageNumber=2&virtualBrandChannel=10005

 
At 2/08/2008 7:00 PM, Anonymous Fred said...

First we lost gold coins through FDR's theft.

Then we lost silver coins as the silver in a U. S. coin was worth more than the face value.

Then we lost copper coins as the copper in a coin was worth more than the face value. Pennies haven't been copper since 1982.

Now we are down to zinc and even that is worth more than the depreciated dollar.

 
At 2/08/2008 8:08 PM, Anonymous dan said...

Maybe I can collect all the pennies I can find in the couch and sell them back to the Feds at 1.5 cents per penny. It's Win/Win.

 
At 2/08/2008 8:23 PM, Blogger Darryl said...

Without the penny, what would someone offer you for your thoughts? How would you weigh in on any issue if you were unable to contribute your 2 cents? These are questions that need to be seriously pondered before any attempts are made to eliminate the penny from our currency.

PS - Some may claim that $.01 is all my thoughts are worth.

 
At 2/08/2008 8:41 PM, Anonymous Anonymous said...

We should do away with money and all get microchips implanted.

Early adopters can get theirs today at VeriMed and while they aren't useable for financial transactions right now it's only a matter of time before you too can have your forehead swiped at your local 7-11.

 
At 2/08/2008 9:08 PM, Anonymous Anonymous said...

If you think that making pennies is idiocy, consider the coinage of the U.K. 1 pound is worth about $2.00 and buys what $1.00 would buy here yet coinage is as follows:

1 Penny (or pence)
two-pence
5 pence
10 pence
20 pence
50 pence
1 pound coin
2 pound coin

The Mad Hatter could not dream up a more nonsensical collection of sizes and shapes seemingly with no connection to their value. The penny is the largest coin, for example.

Next to the excentric coinage of the UK, American coin looks like heaven. Must agree with the Mint, the penny should be eliminated.

 
At 2/09/2008 9:30 AM, Blogger Ironman said...

If 60 Minutes is focusing on copper prices, they're focusing in the wrong area.

While copper prices are high, thanks to strong world demand led by booming Asian economies (China, India, etc.), most people don't realize that pennies aren't made from pure copper. Instead, since 1982, they're primarily made from zinc (97.5%), which is plated with copper (2.5%). Zinc has been falling in price.

You don't have to take my word for it, here's the most recent data for pennies minted after 1982 from Coinflation, and here's a snapshot of the same data from 2006.

As of 9 February 2008, the price of the base metal in a US penny has fallen from 70% of the face value of the coin to 63%. Pennies are getting cheaper to make.

Now, you can make an argument that the metal that the US Mint goes into the nickel needs to be re-evaluated, but what effect do you think that a slowing world economy would have on nickel prices?

And by the time the US Mint gets around to making any such change (pun intended), what is the likelihood that it will even be necessary?

 
At 2/11/2008 11:27 AM, Blogger Walt G. said...

If you buy into the theory that the amount it costs to make a penny is inherently tied to how much it’s worth, then you might as well re-establish the gold or silver standard.

Along the same line, governments supposedly take on jobs that cannot be done profitably in the private sector. So, using that logic, we should privatize all the coinage above the nickel and tax the companies’ profits while still minting the pennies and nickels as a public service.

Anyone who believes governments perform cost-benefit analysis before spending money should try that idea on the Iraq “war.” Let me know what you come up with.

 
At 7/06/2008 9:49 PM, Anonymous John Galt jr said...

Pennies and value Judgements...
The other day I was talking to a young man in a convenience store about the benefits and reasons behind my plans to rid the American people of the penny curse.
This particular young man said that pennies were invaluable in measuring the stature of a man. What I queried? He explained his theory that you can judge a man by how he deals with pennies. Basically his theory was that there are two kinds of people those who collect pennies (re: pick them up) and those who leave them in the give a penny dishes. Those who leave them are generous and those who collect them are cheap and miserly."
"or broke", I added as He continued "So fess up which are you?" he asked. I replied with all honesty, "that I pick up the pennies from the ground and leave them in the dishes..."
John Galt jr.

 

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