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United States The Almighty Buck

US Pennies To Be Worth Five Cents? 729

Posted by kdawson
from the new-nickel dept.
Z-MaxX writes to point out Reuters coverage following up on last month's news that the US Mint has made it illegal to melt or export US coins in bulk, since the value of their constituent metals — in the case of pennies and nickels — now exceeds their face value. The new story quotes Francois Velde, senior economist at the Federal Reserve Bank of Chicago, who thinks the new rules will not be enough — he believes that determined speculators are already piling up pennies. Velde suggests "rebasing" the penny to be worth five cents. Quoting Velde: "These factors suggest that, sooner or later, the penny will join the farthing (one-quarter of a penny) and the hapenny (one-half of a penny) in coin museums."
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US Pennies To Be Worth Five Cents?

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  • Yogi-esque (Score:5, Funny)

    by badenglishihave (944178) on Friday January 26, 2007 @08:21AM (#17767146) Homepage
    A nickel ain't worth a dime anymore
    • by Mr2cents (323101) on Friday January 26, 2007 @09:12AM (#17767788)
      I fear I might have to rebase my login name..
    • by cryptoguy (876410)
      So surely the government will give me a discount if I pay my taxes in pennies and nickels!
    • I knew you guys had nickels and dimes, but nobody told me you guys had pennies, farthings, and ha'pennies!

      You'll be telling me you've got thruppenny bits and silver sixpences next...

      Somebody just let me know how many US guineas there are to the dollar ;-)
      • by mr_mischief (456295) on Friday January 26, 2007 @09:44AM (#17768244) Journal
        Once upon a time, there were mille coins [wikipedia.org] in the U.S., and my parents remember them. The individual states often minted them, which would likely not be allowed under our increasingly powerful central government of today.

        We do not have anything smaller than a penny actually minted any more, specifically because each of the smaller coins experienced this same situation of costing more than its own value. Many things are still priced in half-penny or tenth of a penny denominations, especially things sold in bulk. The final price is just rounded to the nearest penny. (Or sometimes bumped up to the next penny in favor of the vendor for any fraction).

        If the penny goes away, the same thing will probably still be done, only we'll be rounding to nickels or dimes.
        • by itlurksbeneath (952654) on Friday January 26, 2007 @10:20AM (#17768908) Journal

          The individual states often minted them, which would likely not be allowed under our increasingly powerful central government of today.
          Not true. It's perfectly legal for states or cities to mint their own currency, as long as the value of the currency is pegged 1 to 1 to the US dollar. Quite a few local cities/areas have local currencies. See the full list. [wikipedia.org].
          • Re: (Score:3, Informative)

            From the US Constitution... one of the things the Legislative branch has power over:

            Those are not legal tender, and it is in fact illegal for anyone except for the Federal Gov't to print money. It was a total disaster when it was allowed to happen under the Articles of Confederation. It was one of the significant changes that was made when the gov't was re-formed under the constitution. Und

            • by cayenne8 (626475) on Friday January 26, 2007 @11:53AM (#17770622) Homepage Journal
              "Those are not legal tender, and it is in fact illegal for anyone except for the Federal Gov't to print money."

              Then, that does give some weight to what I've read recently that the Federal Reserve bank is constitutionally illegal?!?! They are privately owned, not a branch of the Federal Govt. This is a new argument to me, and I'd not known it in the past, but, it bears some looking into...?

              Reference 1 [wikipedia.org] and Reference 2 [worldnewsstand.net] ....are among many links I found Google pertaining to this.

              Any opinions out there? I've read on some sites, that if we did away with the Fed tomorrow...we could wipe out our debt almost overnight...due to the bonds and such they give out...and the Fed. Govt. would then own the money it has 'borrowed' from the Fed....

              I don't know much about finances, but, it sounded interesting.

  • by Shivetya (243324) on Friday January 26, 2007 @08:23AM (#17767170) Homepage Journal
    Hell telling people not to do this is like inviting every crook and wannabe to do so, hell now even the dumb ones will know about it.

    Just make them out of something worth less than 1c, hell it doesn't even have to be a long term item... plastics should work fine. I would go ceramics but I bet they would break too easily.
    • by duguk (589689) <dugNO@SPAMfrag.co.uk> on Friday January 26, 2007 @08:34AM (#17767326) Homepage Journal
      Well I'm from the UK and I've been reading the Wikipedia Cent (US coin) [wikipedia.org] article, which says:

      1982- present 97.6% zinc core, 2.4% copper plating 2009 (planned) New designs in bronze per the Presidential $1 Coin Act of 2005 [wikipedia.org]

      Rather than getting rid of the cent, will it be replaced with bronze? Is this worth any less?

      DugUK
      • Re: (Score:3, Interesting)

        by TheMeuge (645043)
        Bronze is tin and copper. I presume it'd be worth MORE, if anything.
        • Re: (Score:3, Funny)

          by crawling_chaos (23007)
          Perhaps the US Mint doesn't get skill from Smelting plain old copper anymore? Personally, I'll hold out for Arcanite or Dark Iron.
    • by bogeyjlg (917473) on Friday January 26, 2007 @09:28AM (#17768034)
      I don't know. Making pennies out of plastic might make them seem cheap and not really worth anything.
  • by Vengeance (46019) on Friday January 26, 2007 @08:24AM (#17767188)
    If this were to happen, any funds you had in penny form would immediately grow by a HUGE percentage... And it couldn't really be tracked by anyone, so the tax liability wouldn't exactly be an issue.

    So is it time to begin acquiring rolls of pennies? I've got space in the basement...
  • Pennies are often used only in POS transactions, not vending machines. So why not just make the damn thing smaller?

    Clearly I'm a genius...

    Tom
  • Steel (Score:5, Interesting)

    by jhines (82154) <john@jhines.org> on Friday January 26, 2007 @08:25AM (#17767214) Homepage
    We had steel pennys during WWII for a couple of years, they work fine, bring them back.
  • by siliconwafer (446697) on Friday January 26, 2007 @08:26AM (#17767220)
    Does this mean if I buy something priced at $1.96, I have to pay $2.00 because I won't be able to make exactly $1.96?
    • by travdaddy (527149)
      Does this mean if I buy something priced at $1.96, I have to pay $2.00 because I won't be able to make exactly $1.96?

      Definitely, retailers always round up. Notice the next time that if you buy only one item that is 3 for $10 ($3.33333), you get charged $3.34.
    • by CastrTroy (595695)
      No, it means you pay 1.95. Because that's closer to 1.96. If you buy something that's 1.98, then you pay $2. 0.98,0.99, 1.01, 1.02 round to 1.00, and .97, and .96 rounds to .95, and 1.03, and 1.04 rounds to 1.05. So over the long run it all evens out just fine.
    • No, it means you just use your damn credit card like everybody else!
    • $1.96 and $1.97 would be rounded down to $1.95, $1.98 and $1.99 would be rounded up to $2. This is how it works in Australia, where they discontinued the 1 and 2 cent coins in the early nineties. It only applies to the sum total of your purchases, so if you go to the supermarket and buy $95.54 worth of goods, the price gets rounded up to $95.55 rather than performing the rounding operation on every single item.
    • Does this mean if I buy something priced at $1.96, I have to pay $2.00 because I won't be able to make exactly $1.96?

      Ideally, no. Your purchase would be $1.95. The US military did this over a decade ago on bases overseas. No pennies, except in the Post Office. Round down or up as appropriate.
      Seems to work well.
    • by skribe (26534) on Friday January 26, 2007 @08:55AM (#17767554) Homepage
      Oz did away with 1c and 2c pieces in the early 90s. If bought here your $1.96 item would actually be cheaper at $1.95 because we round to the nearest 5c.
    • by fossa (212602) <<pat7> <at> <gmx.net>> on Friday January 26, 2007 @08:55AM (#17767562) Journal

      Oh the humanity! There was a time, as the summary implies, when one could pay with half-pennies and quarter-pennies (in Britain at least). A loaf of bread cost a dime at some point in the past. Below twenty cents (dime + 100%), there are only twenty possible prices, thus the price of some loaves was probably a little higher than it should have been. Today a loaf is around $2. There are 200 different prices between $3 and $1 ($2 +/- 100%). Do we really need this fine grained pricing? Why didn't we need it in the past? Axeing the penny gives you about 40 different prices in that range. If the penny is more trouble than it's worth, let's ditch it. Keep in mind that prices are already rounded to the nearest cent, so you're already paying tenths of a penny more or a less. Also keep in mind that price is determined by what people are willing to pay. I understand Austrailia has done away with the penny, final price is rounded up or down at checkout, and the economy has not collapsed.

  • by Junior J. Junior III (192702) on Friday January 26, 2007 @08:26AM (#17767222) Homepage
    Why not make ten bigger?
  • Why (Score:3, Insightful)

    by delt0r (999393) on Friday January 26, 2007 @08:27AM (#17767230)
    didn't they start taking them out of circulation when there value was getting close to the cost of the raw materials, rather than waiting untill after the fact?
    • by Vengeance (46019)
      It's GOVERNMENT, duh!
    • by cowscows (103644)
      Prices on raw materials fluctuate unpredictably over time periods that are much shorter than the lifetime of a coin. The price of copper, for example, has fluctuated significantly over the past couple years. Look up some copper price graphs on google. The london metal exchange graph that I'm looking at right now had copper tripling in price over the course of a year, peaking around the middle of 2006, but now down to only around twice the 2005 price.

      I think I read that the average coin lifespan is around 30
    • Re:Why (Score:5, Informative)

      by walt-sjc (145127) on Friday January 26, 2007 @08:54AM (#17767544)
      That's a fair question - fortunately the answer is fairly simple.

      The value of the metals used to make pennies didn't just increase along a gentle slope, they jumped. A lot. According to kitco.com, zinc went from 40-50 cents per pound in 2003-04, to over $2 per pound this month.

      Copper is similar (although pennies don't use much copper anymore.)

      As everyone knows, the government does not move fast. They knew the day was coming, they had no idea it was going to happen this fast. Now they are scrambling, and that scrambling could take a few years yet.

      The easiest thing to do is not to "re-base" the penny, but simply pull it from market and eliminate it. Re-basing would make the penny the same value as the nickel, which would cause havoc.

      Nickels have the same problem actually, the price of nickel has nearly tripled in the last year. We probably need to get rid of both the penny and nickel, or at least make nickels out of much less expensive metals (which will fuck up machines that take coins.)
  • Follow Australia (Score:5, Informative)

    by ill dillettante (658149) on Friday January 26, 2007 @08:27AM (#17767232) Homepage
    and get rid of the useless penny! What we did was phase out our 1 and 2 cent coins and now just round up or round down to the nearest 5 cents. Works well.
  • Melt em! (Score:5, Insightful)

    by FireBug (83228) on Friday January 26, 2007 @08:28AM (#17767236) Homepage
    Just stop making pennies and let the public melt them down - that way the Mint won't have to deal with disposing of them and they'll be put to some better use (recycle! or something) ... but that's just my 10 cents
  • Copper (Score:4, Interesting)

    by Dachannien (617929) on Friday January 26, 2007 @08:28AM (#17767242)
    Copper is valuable enough that thieves are routinely stealing it wherever they can get it, even if that means taking live phone wires. [cleveland.com]
  • Inflation! (Score:5, Insightful)

    by Anonymous Coward on Friday January 26, 2007 @08:29AM (#17767254)
    Weird how you focus on this topsy-turvy.

    The U.S. is suffering inflation. It's not that the cost of metal is increasing, it's that the value of your currency is falling. Fast.

    This week it very, very, nearly reached £1 = $2 for the first time in my lifetime.

    You REALLY NEED TO WORRY ABOUT THIS INFLATION, not the value of the metal in your coins.
    • Re:Inflation! (Score:4, Insightful)

      by slughead (592713) on Friday January 26, 2007 @09:11AM (#17767766) Homepage Journal
      The U.S. is suffering inflation. It's not that the cost of metal is increasing

      Actually, it's both.

      There's a higher demand for copper nowadays and supply is remaining constant.

      All the metals are in higher demand because of little things like oh, I donno, China?

      I agree, inflation's a huge problem (and getting worse), but it's not solely responsible for this.
    • Re:Inflation! (Score:5, Informative)

      by Wylfing (144940) <(brian) (at) (wylfing.net)> on Friday January 26, 2007 @09:29AM (#17768044) Homepage Journal

      This week it very, very, nearly reached £1 = $2 for the first time in my lifetime.

      You must be about 13 years old then. I seem to recall that back in the early 90s the USD:GBP exchange rate was about 2:1.

      Also, the U.S. inflation rate is currently about 2.5%, which, while not spectacularly good, is not that terrible either. By contrast, the U.K. inflation rate is at 2.7%. Maybe try waiting until you need to shave before doling out your stunning economic advice.

      • Re:Inflation! (Score:5, Interesting)

        by whathappenedtomonday (581634) on Friday January 26, 2007 @09:56AM (#17768476) Journal

        the U.S. inflation rate is currently about 2.5%, which, while not spectacularly good, is not that terrible either.

        Quote from this interview [capitalspectator.com]:

        That's deceptive. The rate of inflation is actually horrendous, especially for low-to-middle-income people, who spend their money on food and fuel, and clothing and medical care. Even if inflation was as low as stated, it's the same type of deception that occurred in the 1920s. They kept saying there's no inflation. Inflation is measured by the increase in the money and credit. The distortions sometimes lead to higher prices, but many times you can't predict where those higher prices will emerge. Sometimes it's in a stock market bubble, sometimes it's in commodities, sometimes it goes into the consumer price index. So inflation emerges in different ways. Meanwhile, the biggest problem is the deception that interest rates are low, which causes people who save, people who invest, people who spend to do things they otherwise wouldn't do.

        Interestingly, the Federal Reserve does no longer publish M3 [wikipedia.org] - the interview with Ron Paul might explain why.

    • by Rob the Bold (788862) on Friday January 26, 2007 @09:32AM (#17768076)

      You REALLY NEED TO WORRY ABOUT THIS INFLATION

      OK, OK, Jeez. I'm worried, OK? If I promise to worry, will you quit yelling at me?

      Actually, you're referring to the dollar/pound exchange rate, not necessarily inflation in the US. Since most goods and services purchased in the US are denominated in dollars, not pounds, the relative strength of the pound has little to do with prices in the US. In fact, consumer and manufacturer price inflation is pretty low.

      British products may be more expensive in America, but this only really affects the price of my cheesy comestibles. That's not trivial, but I can make do with less. In the meantime, you should take advantage of the situation and purchase cheaper US goods. I wish I could recommend a visit here to you, but ever since the "Department of Homeland Security" was created this country has had all the charm of a prison camp.

      Exchange rates are rather volatile. When I was visiting Canada on vacation in Fall 2000, the USD:CAD exchange was 0.65 USD per CAD. Canadians I talked to were concerned about two things: that their currency was going to become worthless and that it looked like a bloodthirsty Texas redneck might get elected US president. At least their currency rebounded.

  • other idiocies:

    1. the nickel itself is worth more than a nickel for the same reason the penny is worth more than a penny. the penny should just be gotten rid of
    2. bills are the same color (the salmon pink $10 bill is a recent relief from that) and size so they are hard to tell apart easily, and impossible to tell apart for the blind... who in fact recently sued and won the us govt over this fact [cnn.com]
    3. a dollar coin you can't tell apart from quarters easily (still, i am talking about the sacagawea: same approximate size/ weight)

    the usa is the largest important economy in the world, but its currency is designed worse than the coinage/ bills of some third world countries. i wrote a story about it recently on kuro5hin [kuro5hin.org]. i think australia has some of the best designed currency in the world (different colors/ sizes for the blind, made of plastic, not linen, etc.)

    the us should do a dramatic rethink of the design of their bills and coins, what we have now is depressingly outdated, archaic, and not very user friendly
    • well, in Canada (Score:3, Interesting)

      by 1800maxim (702377)
      Our bills are different color ($5, $10, $20, $50, $100). However, they are still the same size. What's interesting is that all bills have braille, so that the blind can read them.

      I always thought, what happens to braille in very used bills, say, after 10 years...

      Because of colouring, though, our money looks.umm... colourful. It's OK for what it is, but it doesn't have that striking appearance of the US dollar. When you hold US bills in your hands, it looks like real, solid money, and the graphics/print on t
      • the equating of the look and the feel of the american dollar and its "heft" is just a subconcious connection that depends upon factors going on in your emotions, not in any intrinsic value to the actual design or look or feel of the bill. pick up a roman coin and you will think "gee, nice old coin" and thats it. but a germanic tribesman from roman times though would pick up the same coin and fell the "heft" you are talking about, because he equates that coin with the dominant military and economic machine of his time in his mind. same with you

        you have no such equating going on in your mind about the roman coin. and that same germanic tribesman, upon seeing an american dollar, would not feel the "heft" you speak of either. he'd just think it was pretty paper, and probably wipe his ass with it. so the design of the dollar itself is not what gives you the feeling you get when you see it, it is your own mind. therefore, the design of the dollar can be changed, and 20-30 years from now, assuming the usa remains a strong country, a younger canadian tha yourself would feel the same "heft" you speak of, no matter what fruity colors a new radically different dollar would sport

        i remember picking up a nazi coin in a friend's collection of coins when i was a teenager, and the thing had menace. i thought it was evil. it definitely had "heft" in my mind. but in actuality, it was quite worn and light weight and cheap looking, since the nazis needed all of their valuable metals for their war efforts. in essence, there was nothing intrinsic about the design of the nazi coin that gave it the "heft" i felt... in fact, it was quite cheap in design. my feeling about it was all psychological, and it all went on in my mind, and that feeling depended completely upon factors that had nothing whatsoever to do witht he actual look and feel of the coin itself. same with your feelings and the american dollar

        in short, your canadian currency is superior to american currency. simply because its more usable than ours. and that concept completely trumps your weird psychological feeling of "heft" that you speak of
  • debasement (Score:2, Interesting)

    by gp310ad (77471)
    damn pennies
    always messing with the man
    wearing a hole in the pocket of his grey flannel suit
    tasting funny in his mouth
    too small to cover his dead eye's
    won't buy penny candy for the undertaker's kid
    to small to keep up with marching time
    poor pennies ...
    damn nickels
  • by GroeFaZ (850443) on Friday January 26, 2007 @08:33AM (#17767306)
    That's ok, 1 == 5 for sufficiently large values of 1.
  • Why not just discontinue the one-cent coin and be done with it? The fact that their face value is less than the value of the metal is just one more indicator that they aren't worth bothering with anymore. Stores routinely put out penny cups for people to add/remove them to make exact change at the cashier, because they're required to conduct transactions to the nearest cent. But if we'd just discontinue the penny and round cash transactions to the nearest five cents, it'd all come out equal in the long t
  • In the late sixties or early seventies, a local bank for a would pay sixty cents for a roll of fifty pennies. The offer lasted a week or two, I think.
  • Similar stories (Score:5, Interesting)

    by Anonymous Coward on Friday January 26, 2007 @08:41AM (#17767382)
    A few similar stories...

    About 15-odd years ago, South Africa replaced all their coinage (and paper currency too). One unexpected side effect was that the new 20 cent coin was a similar size to the old one cent coin. Some older badly calibrated vending machines, notably parking meters, were unable to tell them apart, so there was a sudden rush to aquire old one cent coins, and lots of people got away with very cheap parking for a while.
    The problem was fairly short-lived, though -- all the old one-cent coins used this way went straight to the banks and were destroyed, so although it caused a short-term revenue issue for vending machines, it did a very effective job of removing all those old coins from circulation much quicker than they would otherwise have been.

    Further back, the British decimalised their currency in the 1970s, but kept the same sizes of coin, so they were interchangable. The older silver coins (shilling, two shilling, etc) had previously been made with a pretty high content of actual silver metal, the older the coin, the more it contained. And since the coins were still in circulation, it was possible occasionally to get in your change a hundred year old coin worth a lot more than the ten pence (two shilling) face value. My grandparents kept a collection of the really old ones they got for years. I don't know what happened to it in the end, but it would probably be quite valuable. (The UK coin sizes were changed relatively recently, so you won't get the really old coins any more)

    More recently, again in Britain, the news media carried excitable stories about the two pence coin being worth three pence for it's scrap copper value. It has been illegal to deface British currency for a long time, and you'd have to collect a vast number of two pence coins to make it worth the effort, so as far as I know, no-one has bothered actually trying to make any money from it, but in theory it is possible.
  • Coins (Score:2, Flamebait)

    by JoshJ (1009085)
    Why the hell are we still using coins and bills? Fiat currency is arbitrary anyway, can we please just move over to plastic entirely?
  • It is silly to have such a small denomination of currency. Every time you buy something you go through this stupid ritual of counting pennies that make no material difference to either the merchant or the purchaser. Or else have some obsequious interaction about whether or not to offer/accept them. Vending machines don't even take pennies. They wear out our pockets.

    So get rid of them. And if you get rid of nickels too, the arithmetic will be even simpler.
  • by fudgefactor7 (581449) on Friday January 26, 2007 @09:01AM (#17767644)
    In the way back of American currency, there were these strange things called "folding quarter dollars" that were paper money worth 25 cents. Perhaps now would be a time to stop all metal coin production and switch over to all paper currency? Hell, it wouldn't even need be paper, could be something like polyester or other durable plastic that's a recyclable.
  • by Wansu (846) on Friday January 26, 2007 @09:02AM (#17767658)

    The US dollar is losing it's value so rapidly, base metal slugs used as coinage are worth more than face value.

    See, we stopped making pennies of copper in 1982. Pennies made after 82 are copper plated zinc alloy. Now even that is worth more than a penny (1.73 cents). A pre 83 copper penny is worth about 3 cents.

    Pre 65 dimes, quarters and halves, also referred to as "junk silver coin" are fetching about 6 and a half times face value.

    The US dollar may soon lose it's status as reserve currency in the world. When that happens, we will be faced with hyperinflation. This is happening because of our burgeoning trade deficit causing by offshoring, our rapidly growing budget deficit caused by this insane war and the government printing currency like there's no tommorrow.

    Tommorrow will come and we will be confronted with a bitter reality.

    • by numbski (515011) * <numbski@@@hksilver...net> on Friday January 26, 2007 @09:30AM (#17768058) Homepage Journal
      You stopped short of the "bitter reality". Not everyone here has studied economics, so you're going to have to spell it out for them:

      When inflation hits a certain point, your currency becomes worth next to nothing, salaries fail to keep up, mortgages are too high (those real estate deals people are so happy about making cash off of...), and we fall into a deep depression. Happened in the early 90's, happened when the tech bubble popped, and the parent is talking about us being on the verge of it happening again.

      It's a lousy hole to dig yourself out of, because it's a cycle that no one knows exactly how to break. It just seems to take time (and lots of it) for values to fight their way close enough back to equilibrium and life goes on.

      It makes me sick every time I see articles about people flipping real-estate. They HAVE to know properties are over-valued. They just have to. With each sale, the next owner expects the property to either keep its value or go up. When people are flipping properties so quickly, everything has a sale price higher than its actual value. Here in St. Louis, the impact of it has already started to take hold: no one is buying. The market will only bear so much insanity.

      As for the mints running money like mad, he's mostly right. For each dollar in circulation, the less each dollar is actually worth. The catch there is circulation. I know many older bills have been coming out of circulation, but I don't know at what rate, so I can't start jumping up and down at that point just yet, but he may very well be right. So we're over-valuing the land we live on, we over-value our money. We're in debt up to our eyeballs to other nations, and we're fighting a war with no clear-cut objective for victory or retreat. Without any bias toward or against our president, we are nearing par with Vietnam, the difference here I have to say is that our body count is not anywhere near the same (thank goodness!) and there is no draft.

      Those who study economics have to realize something here too: all of our really serious depressions in the past have been resolved by wars. War creates jobs. War stirs the economy, makes individuals wealthy. Morality aside, each time we've gotten into a bind, a war has bailed us out. This may very well be the first time that *while* at war, this is happening. A war won't bail us out this time (or at least, we'd all best pray it doesn't, because if it does, it means we as a country p*ssed off the rest of the world and they come here to set us straight).

      It really is sad to see. I bought my first home 3 years ago. I *thought* the value was a bit high, and managed to buy it just short of what it was appraised at, and was praying my wife and I didn't become too screwed by the real-estate market bombing. Here's to hoping. :\
  • by LinuxParanoid (64467) on Friday January 26, 2007 @09:02AM (#17767660) Homepage Journal
    This is kinda a side-note, but I found the article didn't explain what was going on very well.

    The article implies that copper prices ($4.16/pound last May) are the reason pennies can be melted down profitably.

    Since pennies are 97.5% zinc, 2.5% copper (says US Mint via google), the issue is that, at 154 pennies per pound, it's the zinc price rising above ~$2.00 that becomes an issue. And that happened last November (although it's now ~$0.77/pound for Zinc.) Zinc prices are the problem, not copper.

        --LP
  • by kabocox (199019) on Friday January 26, 2007 @09:21AM (#17767934)
    It's actually a "good" thing that our pennies are worth 5 cents in metals. The "bad" part though is that we kicked the gold standard so our dollar isn't actually worth as squat compared to what it once was. If we really wanted an honest currency, all our currency would hold its face value in metal or other hard resources. We might have to redo our currency where one penny is equal to such and such grams of x metal. All our other coinage could change sizes and weights to match their relative worth. The problem comes with paper money. Let's be honest, our paper money is worthless except for whatever value we currently give it. At this time, it would be more practical just to eliminate paper or coinage as form of currency in the US. The US Treasury could issue every entity that currently holds US currency an ID/debit card with 0.00$ on it. The treasury, banks, or other places could credit/debit the amount from the card as needed. I see problems in that it would be possible to walk around with all your savings on this card instead of somewhat secured behind a bank and through fraud the entire amount gets drained away. I don't think that we are quite ready for that, but it would be the easiest tech thing within our reach to replace our paper and coinage with. One bonus as well is that they could define units of currency of less than a penny by just extending the decimal place and removing a smaller slice. This would help in the on-line world where there is the crowd that wants micropayments for things.
    • by Control Group (105494) * on Friday January 26, 2007 @10:09AM (#17768690) Homepage
      I was going to lay down a thick bed of sarcasm here, but instead I'll just ask you to consider the surveillance, privacy, economic, and tax implications of replacing a fungible, untraceable medium of exchange (cash) with one that's inextricably linked to your identity, records every transaction as an inherent part of the transaction, and can be watched in real-time from anywhere on the planet.
    • Re: (Score:3, Insightful)

      by corbettw (214229)
      There are two problems with that:

      1) "Hard currencies" and metal only have value because people agree on it beforehand. Gold has no intrinsic value assigned to it by the universe, only by human beings. So keeping your money on a gold standard is only marginally less absurd than our current system.
      2) Money is a reflection of wealth, and limiting the money supply limits wealth creation and distribution. There's a reason why there are more millionaires (and billionaires) in the US today than in the 19th century
      • Re: (Score:3, Insightful)

        by Control Group (105494) *
        1) "Hard currencies" and metal only have value because people agree on it beforehand. Gold has no intrinsic value assigned to it by the universe, only by human beings. So keeping your money on a gold standard is only marginally less absurd than our current system.
        2) Money is a reflection of wealth, and limiting the money supply limits wealth creation and distribution. There's a reason why there are more millionaires (and billionaires) in the US today than in the 19th century: there's more money available. W
  • True story (Score:3, Funny)

    by smooth wombat (796938) on Friday January 26, 2007 @09:43AM (#17768236) Homepage Journal
    Both my parents and I keep an eye out for abandoned pennies. Walk across a parking and we scan the ground to see if one is lying around. You'd be surprised how many pennies one finds this way. They've thought about putting all these found pennies in a jar and see how much they could collect over time.

    Anyway, I took them down to D.C. a year or so ago to visit one of the Smithsonian museums. As my mom is standing on the sidewalk, waiting for me to get out (traffic coming), I notice she walks between the cars and bends down. When I get out of the car I see there is a penny lying in the street.

    Only problem is, she can't pick it up. She calls my dad over who also tries to pick it up. The penny has been lying on top of joint sealant which has softened enough that the penny is now held fast to the street unless one has a screwdriver to pry it out.

    As I'm standing there watching this, I remark to them, "You know, I'll bet there's a camera somewhere recording this. I'll bet someone put that penny there and is trying to find out how many people are desperate enough to try and pry that penny off the ground. Congrats, you're on Candid Camera!"
  • Modest proposal (Score:3, Interesting)

    by Spazmania (174582) on Friday January 26, 2007 @10:14AM (#17768790) Homepage
    A modest proposal:

    1. Release a new half-dollar coin that is about the size and cost of a nickel. Make it maybe a little smaller with a rough edge so that coin mechs won't see it as a nickel. The existing 50-cent coin is too big, too expensive to produce and unsupported by automated coin mechs.

    2. Release a new dime design that looks and works just like current dimes except its a "tenth dollar," not ten cents.

    3. Cease production of the penny and nickle.

    4. Phase out production of the quarter over the course of a decade. The new system calls for tenths of a dollar and the quarter is an odd quantity.

    5. At the same time, increase the mass production of the dollar coin. With room for it in the cash register, it'll see increasing use.

    The result: US currency moves to a system of dollars and tenths of a dollar, leaving the old system of cents behind. Nobody feels cheated by rounding because its no different than rounding to cents is now.

    It also creates a precedent for phasing out the sub-dollar coins 50 years from now.
  • by AusIV (950840) on Friday January 26, 2007 @02:33PM (#17773698)
    Lots of people seemed to be concerned about how transactions will be rounded. Will something that costs $1.96 be rounded to $1.95 or $2.00? My big question is, what happens to those of us who seldom pay cash for anything? If I have the option at all, I pay with my debit card, so there's no reason I can't pay $1.96 even. Would rounding apply to credit/debit cards, checks, and other method payments that don't involve cash?

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