So Why Are We Still Minting Coins?

The run-up in nickel prices is lifting the value of the metal in a nickel, which cost the U.S. Mint more than its face value of 5 cents to produce even before the surge in nickel prices. The U.S. coin is 25% nickel and 75% copper.

Nickel prices spiked to $100,000 per metric ton on the London Metal Exchange earlier this week before trading was halted. The metal had traded around $25,000 a ton before the run-up.

It cost the Mint 8.52 cents to produce a nickel in the government’s latest fiscal year ended in September. That is when nickel averaged about $17,500 a metric ton. Pennies also cost more to create, about 2 cents, than their face value, while other U.S. coins had less metal value than their face value.

https://www.barrons.com/articles/how-much-is-a-nickel-coin-w…

It’s the sales tax that creates the need for the penny and nickel. Easy enough to have the price of goods set at a dime minimum, but sales tax creates a bill that can’t be in multiples of a dime. Perhaps it’s time to round up or down the taxed transaction to the nearest dime? Seems insane to be continuing to mint coins that cost more to make than their face value. I wonder what the impact of rounding tax down to the nearest dime would be given the cost of the coins themselves. Of course that ignores the impact on local taxes, with local gov’t not responsible for minting coins.

IP

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Most things are paid for on credit cards so going to the dime is not necessary.

The coins are a subsidy for the states. De facto.

Perhaps it’s time to round up or down the taxed transaction to the nearest dime?

Compared to now, priced were rounded fifty years ago.

Thanks to inflation, $1 today buys what cost 14 cents in 1971. Turning that around a nickle today buys what cost less than a penny in 71. We didn’t have half pennies anymore, so, in 71. the price was rounded up to a penny.

Compared to my formative years, we are close to being able to drop pennies, nickles and, probably, dimes.

Of course, any change in the currency system would bring all the conspiracy nutters out of the woodwork. Remember the nonsense about the peach colored $10 bills, how they were supposedly open to being repudiated by the government and the people thus robbed?

Or, we could revalue all the denominations at a ratio of 1:10, like a banana republic, so that dimes, nickles and pennies would be worth something. Emblazon the new coins and bills with portraits of the “heros of supply side economics”. then the cranky old phartz would be happy, because prices would be back to what they remember from fifty years ago…happy until their see their paycheck shrink.
/sarcasm

Steve

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Eliminating the penny is inflationary. The “job creators” would round up everything. Even worse if you eliminated the nickel.

https://www.researchgate.net/publication/5220726_Eliminating…

intercst

Does that mean we should bring back the ha’penny to keep inflation down?

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Eliminating the penny is inflationary. The “job creators” would round up everything. Even worse if you eliminated the nickel.

My example shows how, fifty years ago, prices were being rounded up to a penny, as there was no smaller denomination. The purchasing power of a Dime today a little more than that of a penny fifty years ago. A penny in 1970 is the equivalent of 8 cents now.

I figure you are correct that some will feel cheated, sure they are being charged two or three cents more, when the value of two or three cents is effectively zero. What can you buy for a penny today, other than a ride on a mechanical pony at Meijer?

Sandy, the Meijer Pony – is She Finally Back?

I was in Meijer the other day when I did a double-take. Wait a minute…Sandy the Pony is back on the floor! I hadn’t seen Sandy for…well, quite a few months. And she’s still only a penny.

In spring 2020, thanks to COVID, Meijer made some radical chnages…one of them was shutting down and removing all the Sandys in every location. But now she seems to be back.

Read More: Sandy, the Meijer Pony – is She Finally Back? | https://99wfmk.com/sandy-the-meijer-pony-is-she-finally-back…

I noticed the pony’s absence in 20. There was a sign where the pony usually sat, saying “Sandy is resting in her stable”

So, I proposed the “banana republic” solution: revaluation at a 1:10 ratio, so the new penny is equal to a Dime, and a ten dollar bill becomes a one dollar bill. No one feels “cheated” because they have all the denominations they are used to.

Steve

1 Like