Eliminating the Penny
Call me crazy but I don't think pennies and nickels are our problem.
Paul Kedrosky via Infectious Greed:
The U.S. has a currency problem. No, not just the dollar, or even the staggering debt and deficit, but another one: It loses money making pennies and nickels. Here is some musing on the problem from the new White House budget docs:The Mint's primary cost driver is the price of metal, a factor over which it has no control. Daily spot prices of copper and zinc, the Mint's two main metallic materials, have fluctuated in excess of 100 percent, and the price of nickel by 500 percent in recent years. This contributes to volatile and negative margins on both the penny and nickel: in recent years the penny has cost approximately 1.8 cents and the nickel approximately 9 cents to produce. Costs have exceeded the value of these two coins by over $100 million in prior years.
Well, the White House and the Mint have a cost-saving solution:
The 2011 Budget would bring the costs of coins more in-line with their face values and create a more sustainable, cost-effective 21st Century use of materials in the minting process. The Budget enables the Department of the Treasury to explore, analyze, and approve new, less expensive materials for all circulating coins ...
Paper? Plastic? The return of the wooden nickel?
Who needs pennies when you're busy cranking out bazillions in FRNs?
Coin Update News:
Economic conditions caused a significant decline in the need for the United States Mint's circulating coins. Shipments to Federal Reserve Banks declined significantly, resulting in a corresponding decline in seigniorage. This article continues the coverage of the United States Mint 2009 Financial Results.
Circulating Coin Unit Cost by Denomination
FY2009 FY2008 Change Cents 0.0162 0.0142 14.08% Nickels 0.0603 0.0883 (31.71%) Dimes 0.0565 0.0436 29.59% Quarters 0.1131 0.1090 3.76% Dollars 0.3040 0.2641 15.11%
Like I said, who cares? Blipblipblip. When we're talking a deficit in the trazillions, what's a few pennies?