Posted on 08/21/2008 10:33:44 AM PDT by djsherin
Johnny Carson might have quipped about the economy, "Inflation is so bad these days… that pennies are now selling on the street for two cents."
This joke may not be all that funny, even with the great Carnac delivering it, but it does have the underpinnings of good comedy: an absurd story based on a kernel of truth.
Old pennies are routinely traded at premium prices, sometimes twice or more their face value. This is not because they are rare or precious — they were minted by the tens of billions — but simply because they are worth more as metal than as money.
Because of this "bullion premium" on the older pennies, a small cadre of penny hoarders is actively searching through America's stock of pennies to pick out these undervalued coins.
Casual observers are not struck with a deep sense of economic import when they learn about penny hoarding. Neither are most economists. The government dealt with the problem by simply making the coin out of a much cheaper metal: zinc. So what's the big deal?
Well, it turns out that the cheaper metal didn't stay cheap forever, and again it costs the US mint more than a cent to make a penny (and, incidentally, more than 5 cents to make a nickel).
(Excerpt) Read more at mises.org ...
I really don’t even know why we still use pennies. All they are good for is paying sales tax in a more precise manner. It takes a roll of pennies to buy anything.
Gresham’s Law is alive and well. I saw it work with amazing rapidity when the clad coins came out in the ‘60s.
Pennies were designed so women would have to look for them in the bottom of their purse at the local store while men wait on line behind them.
I save copper pennies.
Everytime I go to the bank, I ask for 2 rolls of nickels. It’s like getting $8 back in trade for $4, at the current melt value. In a year or two, count on the mint making new nickels out of painted zinc or steel.
Rome started out with silver denarii and finally went to base metals with a silver finish over them (so that they looked like the real thing).
The next thing that happened was that the barbarians overran
the empire.
(not that I’m suggesting any kind of parallel, though. . .)
did the barbarians come over Rome’s southern unprotected undefended border?
Actually it was mostly their northern border, and they granted them what amounted to amnesty.
Get rid of pennies and dollar bills. I use $1 coins.
Suggestion...
Make pennies and nickels which are smaller than dimes.
The present price of copper is about $4 per pound, but let's assume $4.54 per pound so that it works out to 1¢ per gram.
The present price of nickel is about $9 per pound, but let's assume $9.08 per pound so that it works out to 2¢ per gram.
Again make a copper penny but make them 10 mm in diameter, 0.7 mm thick, and 0.5 grams -- which would cost 0.5 cents in copper.
Make a nickel nickel which is 14 mm in diameter, 1.0 mm thick, and 1.37 grams -- which would cost 2.74 cents in nickel.
hence my tag....
Thank Mr Nixon for destroying the dollar!
How dare you insult a Republican! /s
We also have FDR to blame who seized all our gold at $20.67 per ounce then jacked up the exchange rate to $35 per ounce.
No. Mr. Nixon inherited a helluva mess left by Kennedy and Johnson. See Bretton Woods System
Great suggestion!
Estimated M2 (The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency plus the amount in demand accounts ("checking" or "current" accounts) plus most savings accounts, money market accounts, and small denomination time deposits (certificates of deposit of under $100,000)) is about $ 8 trillion (8 million millions). The present US gold reserve is about 260 million ounces. Fully gold backed US currency (including short term deposits) works out to about $30,000 per ounce!
You do understand why dimes, quarters and fifty cent pieces were made those sizes?
That’s fine, and I promise not to melt down my pre-64 silver coins either. But they’re still worth the silver spot price. Just like real nickels will always have a value, even when our debased modern coinage goes the way of the zinc and aluminum DDR Mark coins.
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