CNNMoney has a good overview regarding the latest fiat quagmire. Apparently it now costs 1.4 cents to make a penny and under the guise of fiscal conservativism, Congressman Kolbe of Arizona wants to no longer produce it. Here is an interesting catch though:
Kolbe’s home state of Arizona is the largest copper producing state in the nation. Copper is the main material of the nickel which would benefit by becoming the lowest denomination of currency in circulation.
Interestingly enough, the article also points to another firm that benefited from contracts financed by tax payers:
Kolbe’s bill also takes aim at Massachusetts-based Crane Paper, which has been the exclusive supplier of paper to the Bureau of Engraving since 1879. Crane has benefited from legislation requirements that effectively makes it the only possible supplier of the paper.
Perhaps Crane will attempt to fight back, noting that this “ruinous competition” will destroy the marketplace.
More on counterfeiting: 1 2 3 4
Via Mike Ewens.
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Ahhh, the stares I get when I bend down to pick up a penny off the street. Or the laughs I receive at the bank, when I go to trade in my little green pieces of paper for Pennies. They wonder why anyone would want Pennies; I wonder why anyone would what green pieces of paper. For every dollar bill I give them I receive 100 pieces of metal, some are 2.5 grams and are made of 2.4% copper and 97.% zinc(pre-1982) and some are 3.1 grams and made of 95% copper and 5% zinc(1982+). Am I as crazy as everyone seems to think? Maybe, but I’ll take 100 pieces of metal over a green piece of paper with a one printed on it any day.
The way I see it is that the penny has become a commodity backed currency…of course the government and the federal reserve must act fast to put an end to that. Look out Nickel your next!
Corey,
That’s a funny story and a great example of the “wisdom” engendered in the “Convention Wisdom”.
A small correction, you have you’re dates mixed up. The “solid” Copper penny pre-dated the “Copperplate” penny.
I run into a similiar reaction when I ask for two Nickels instead of a Dime. :^)
oops,
I got the dates backwards. Thanks ME Hoffer.
I’m disappointed when the cashier takes a penny out of the “give a penny take a penny” bin to round out my change when I was due four pennies.
Kolbe should be careful with that logic. The last time i checked, the metal content of a nickel was worth well over 6 cents (coinflation.com).
Loose the penny, the nickle, the quarter, and the dollar bill. Use dimes, 50 cent pieces, dollar coins and two dollar bills. Some say we’ll loose out because everybody will round their prices up, but everytime somebody wants a competitive edge they’ll have to drop their price a full ten cents to be lower.
My guess is that the ability to ratchet up sales tax in politically unnoticeable increments still outweighs the revenue loss in producing small-denomination coins.
Corey, isn’t it a crime to destroy currency? Can you actually melt it down and separate them, legally?
If not, what is the point? I’m curious as to what you plan to do with them.
quincunx,
as I understand it (and I’m probably wrong), it’s a crime to melt it down (deface it) and *then try to pass it off as currency*
It seems that it’s not actually a crime to melt it down if you never try to pass it off as currency. (plus, if you did a good job of it, there’s no evidence.
)
On another note, though, it seems there may be another motive for the bill:
(from here.)
I don’t have to melt them down. I’m sure it wouln’t be difficult to find a buyer for them in the future, just look what happen with silver quarters(http://lynncoins.com/jsilv.htm). It’s an easy way to protect my purchasing power with no risk.
I don’t know about the legality of destroying a paper dollar, but as for pre-’65 US 90% silver coins (http://cmi-gold-silver.com/90circulated.html), they are melted daily for their silver content. For investing, 90% silver coins can be bought at or below the value of their silver content.
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