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jadedragon
Administrator
Canada
3788 Posts |
 Posted - 02/12/2010 : 03:10:47
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From the 2011 Budget Proposal - TERMINATIONS, REDUCTIONS, AND SAVINGS document You must be logged in to see this link.
Page 100
OTHER SAVINGS: COINAGE MATERIAL
Department of the Treasury
The Budget proposes to provide the U.S. Mint with greater flexibility in the material composition of coins
to reduce its losses on some coins and the production costs associated with volatile metal prices.
Justification
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.1 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.2 Costs have exceeded the value of these two coins by over $100 million in prior years.
Through its gains on other coins, the Mint annually returns hundreds of millions of dollars to the Treasury
General Fund (GF) and is funded by the Mint Public Enterprise Fund.
Greater flexibility in the composition of coinage materials could enable the Mint to utilize less expensive
metals in the minting process and substantially reduce its production costs. Using alternative coinage
materials could save $150 million annually after an initial period of development and capital adjustments.
These savings result from increased seigniorage, or the difference between the face value of the coin paid
by the Federal Reserve and the cost of production. Seigniorage increases the available means of financing,
but has no direct budgetary impact. Specifically, the Budget includes provisions that authorize the
Department of the Treasury to approve alternative coinage compositions and weights across five
denominations (half dollar, quarter, dime, nickel, and penny).
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 based on factors that will result in the highest quality of coin production at the most cost-effective
price. Such factors may include physical, chemical, metallurgical and technical characteristics; material,
fabrication, minting, and distribution costs; materials availability and sources of raw materials; durability;
effects on sorting, handling, packaging and vending machines; and resistance to counterfeiting. The added
flexibility the Budget proposes will improve the minting process and enable the Mint to mitigate the high,
volatile costs of commodity metals.
Citations
1 Global InfoMine, Metals Prices, You must be logged in to see this link. (January 2010).
2 USA TODAY, Coins Cost More to Make than Face
Value, You must be logged in to see this link. (May 2006).
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“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
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dakota1955
1000+ Penny Miser Member
2212 Posts |
Posted - 02/12/2010 : 07:37:48
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| I'm suprise that it has not happen yet but we know that is how the goverment works. |
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uthminsta
1000+ Penny Miser Member
USA
1872 Posts |
Posted - 02/12/2010 : 09:26:41
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quote:
Originally posted by jadedragon create a more
sustainable, cost-effective 21st Century use of materials in the minting process.
21st century use of materials. Hmm. Literally, that's how all coins have been made since 2001. I wonder exactly what they mean, with the phrase 21st century use of materials. We're now in the tenth year of the 21st century, what's the holdup?
And what I really want to know is...
Aluminum, steel, zinc? Manganese? PLASTIC?!? |
Come to the new and improved realcent: http://realcent.org
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Proposed change in metal in coins
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