Let's get two pennies together and make ten cents!

[Mr. SmartyPants]

http://news.yahoo.com/s/nm/20070122/us_nm/usa_pennies_shortage_dc

Coin shortage could turn pennies to nickels

By Kevin Plumberg Mon Jan 22, 4:39 PM ET

NEW YORK (Reuters) - Talk about pennies from heaven.

A potential shortage of coins in the United States could mean all those pennies in your piggy bank could be worth five times their current value soon, says an economist at the
Federal Reserve Bank of Chicago.

Sharply rising prices of metals such as copper and nickel have meant the face value of pennies and nickels are worth less than the material that they are made of, increasing the risk that speculators could melt the coins and sell them for a profit.

Such a risk spurred the U.S. Mint last month to issue regulations limiting melting and exporting of the coins.

But Francois Velde, senior economist at the Chicago Fed, argued in a recent research note that prohibitions by the Mint would unlikely deter serious speculators who already have piled up the coinage.

The best solution, Velde said, would be to "rebase" the penny by making it worth five cents rather than one cent. Doing so would increase the amount of five-cent coins in circulation and do away with the almost worthless one cent coin.

"History shows that when coins are worth melting, they disappear," Velde wrote.

"Rebasing the penny would ... debase the five-cent piece and put it safely away from its melting point," he added.

Raw material prices in general have skyrocketed in the last five years, sending copper prices to record highs of $4.16 a pound in May. Copper pennies number 154 to a pound. Prices have since come down from that peak but could still trek higher, Velde said.

Since 1982, the Mint began making copper-coated zinc pennies to prevent metals speculators from taking advantage of lofty base metal prices. Though the penny is losing its importance -- it is worth only four seconds of the average American's work time, assuming a 40-hour workweek -- the Mint is making more and more pennies.

Velde said that since 1982 the Mint has produced 910 pennies for every American. Last year there were 8.23 billion pennies in circulation, according to the Mint.

"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," he said.

[Mangafanatic]

*Counts her pennies*

[Puritan]

Hmm...perhaps taking the time to roll up $4 in loose pennies wasn't such a waste of time after all...I just have to wait for a while and then receive a quintuple return on my investment. *Thinks a while* But then again, I think it's more likely the Federal Reserve will just start keeping pennies for themselves and stop issuing new ones rather than revaluing pennies, largely because I suspect inflation would spike pretty quickly the instant this went through. That's alot of money. 823 million dollars of pennies turning to five cent pieces adds about 3.3 billion dollars to the economy overnight. That's not huge considering the sum total of our economy, but it is a whole lot of money.

[Roy Mustang]

I thought pennies were on the way out in a few years.


Wingzero22

[FarmGirl]

Interesting. Must tell Grandpa to keep that jar of copper.

[Ashley]

So....if we have a lot of pennies *cough cough me* is it good to cash them in now or not?

[uc pseudonym]

That's an interesting possibility. However, I remain skeptical of the removal of the penny as a one cent coin. I recall reading that various people have wanted to get rid of them due to their low value but that the general populace seems to want them.

Also, a lack of a one cent coin would require all stores to change their items so they came out to be a price divisible by five, otherwise giving change would be impossible. Given how taxes vary from city to city, that'd be an interesting bit of work.

[Raiden no Kishi]

Hrm. If they were going to make the penny worth five cents, one would think it'd be worth it to get a good amount of money changed to pennies now. If all else failed, you'd at least be able to go without losing any money.

.rai//

[jon_jinn]

i heard that on the radio. i'm starting to collect pennies so i'd better get as many as i can before the price officially goes up...

[Felix]

And we're going to lose our pinkies, next.

That's interesting though. I'll just wait and see what happens, you just never know what crazy thing the government might do next.

[Warrior4Christ]

Also, a lack of a one cent coin would require all stores to change their items so they came out to be a price divisible by five, otherwise giving change would be impossible. Given how taxes vary from city to city, that'd be an interesting bit of work.

Not necessarily. Australia hasn't had 1c or 2c coins since '90/91. It seems to work here.

From wikipedia:
"The one and two-cent coins were discontinued in 1990-91 and withdrawn from circulation. Cash transactions are rounded to the nearest five cents, or rounded down at the option of the retailer. "

[Yahshua]

Wait for few more years Ashley then to cash them with greater value.

[Tenshi no Ai]

From wikipedia:
"The one and two-cent coins were discontinued in 1990-91 and withdrawn from circulation. Cash transactions are rounded to the nearest five cents, or rounded down at the option of the retailer. "

I like that idea... that's the next best idea I've heard in the currancy world, next to our Canadian loonie and twoonie coins (and COLOURED money!) Seriously, America money confuses me :/ Dollar bills are just a pain to count out since they aren't in coin form, and the money looks pretty much the same (although now I hear that slight colour has been added). I dunno, Canadian money being colour-coded is just so much easier to "count" since you like, count by the colours and all^^

Back on topic, with the penny thing, I wonder if it would be the same up here? Or maybe I should just gather all the US pennies I find, since your value is still up compared to here, so then like, 10 cents to you guys might be around... 15 or so to us.

[mitsuki lover]

I wonder though if they would really discontinue the penny considering its one of the most ubiquitous coins in circulation.Then again Spanish Pieces of Eight used to be in circulation as legal coinage in the U.S. for a long time as well.We no longer
use Pieces of Eight.

[Doubleshadow]

I've wondered how they'll compensate for the presence of zinc in most new pennies. They have been using copper coated zinc for a while because zinc is a cheap alternative. I don't see the government altering the value of the penny. They'll probably try to phase it out of circulation if they find metal collectors too troublesome.

[Ashley]

Or maybe they'll just start using a new metal for pennies, like aluminum or something.

[Azier the Swordsman]

Maybe I should save those pennies from all that tip money I've been procrastinating about cashing?

Although I'm not gonna hold my breath just yet. As said before, it would take a tremendous amount of work.

[Shinja]

personally i think this is a good example of why we should go back to a valued system of currency, the penny like all coinage should have the same value as its purchasing power

[Nate]

From what I remember, going off the gold standard made sense at the time, but I think it would probably behoove us to go back.

At any rate, I agree with Puritan, the government isn't going to magically put billions of imaginary dollars back into the economy, it would completely mess things up. They'll either phase out pennies completely or find a cheaper alternative, but revaluing the penny at a higher amount is completely absurd and would never happen.

[uc pseudonym]

Not necessarily. Australia hasn't had 1c or 2c coins since '90/91. It seems to work here.

From wikipedia:
"The one and two-cent coins were discontinued in 1990-91 and withdrawn from circulation. Cash transactions are rounded to the nearest five cents, or rounded down at the option of the retailer. "

Ack, I can't believe I didn't think of that. Or, more precisely, I did, but I dismissed rounding out of hand. I'm somewhat of a mathematics person. That would be a logical and simple solution.

Dollar bills are just a pain to count out since they aren't in coin form, and the money looks pretty much the same (although now I hear that slight colour has been added). I dunno, Canadian money being colour-coded is just so much easier to "count" since you like, count by the colours and all^^

Coloring does make sense, but I don't think it's necessarily that much more effective. You just have to be able to read numbers instead of recognizing colors, which isn't that difficult of a skill. And I much prefer bills to coins as far as counting goes.

[samuraidragon]

I read a whole article on how a bunch of mathematicians want to replace the penny with an 18¢ coin. They're an eccentric bunch, those mathematicians. XD

You should read it, http://www.discover.com/issues/oct-03/departments/featscienceof/

[Roy Mustang]

Let's get two pennies together and make ten cents!

My musical sense is tingling!


By your pennies combined, I am Captain Money!

Captain Money. He's our hocky

Gonna buy us anime and pocky


*ack, that song brings back bad flashbacks of my youth*


edit: to make the fearless leader happy!


Wingzero22

[ShiroiHikari]

personally i think this is a good example of why we should go back to a valued system of currency, the penny like all coinage should have the same value as its purchasing power

I agree. It only makes sense.

[Mithrandir]

Wing... that didn't rhyme. You need something like... "He's our, um, hocky..."

[Doubleshadow]

Wing, you are evil! I cringed so hard when I read that I felt a twinge in my chest and cramped my left shoulder!

And samurai dragon, you are my hero. That is the best article ever.

[Nate]

My favorite quote was:

"Actually the United States does have an 18-cent coin. It's called the Canadian quarter."

Ba-dum-TISH!

Actually, I cheated a vending machine once, because it accepted Canadian quarters. I ended up paying only 54 cents for a 75 cent candy bar! Take THAT, vending machine price gougers!

[Doubleshadow]

Ah, is this becoming the cringe worthy humor thread? I've got one:

If your spouse makes bad coffee, is that grounds for divorce?

*dodges rotten fruit and pennies*

[Warrior4Christ]

I read a whole article on how a bunch of mathematicians want to replace the penny with an 18¢ coin. They're an eccentric bunch, those mathematicians. XD

You should read it, http://www.discover.com/issues/oct-03/departments/featscienceof/

Interesting article.. I wonder which coin we'd need?

I like that idea... that's the next best idea I've heard in the currancy world, next to our Canadian loonie and twoonie coins (and COLOURED money!) Seriously, America money confuses me :/ Dollar bills are just a pain to count out since they aren't in coin form, and the money looks pretty much the same (although now I hear that slight colour has been added). I dunno, Canadian money being colour-coded is just so much easier to "count" since you like, count by the colours and all^^

I like coloured notes too! You can glance at anywhere on a note and know what colour and hence denomination it is, but you have to look at a specific area on a note to read the numbers if they're all the same looking.


Another wikipedia quote:
"The 1 cent coins were then melted down to make bronze medals for the 2000 Summer Olympics."

XD

[mitsuki lover]

Bring back the Confederate dollar!

[Nate]

Bring back the Confederate dollar!

Wow, that's one of the most ignorant statements I've ever heard, considering that it would do nothing except increase racial tensions, the Confederate dollar was practically worthless even before the end of the war, and the money was so crudely designed that it was extremely easy to counterfeit.