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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 07/18/2006 : 09:15:21
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Kill-the-penny bill on its way
Citing spiraling zinc costs, Rep. Jim Kolbe on Tuesday will continue his quest to eliminate the 1-cent piece.
By Christian Zappone, CNNMoney.com staff writer
July 18 2006: 9:36 AM EDT
NEW YORK (CNNMoney.com) -- Representative Jim Kolbe (R-Arizona) on Tuesday will unveil details of legislation to eliminate the penny. The move is in reaction to the rising cost of zinc - the penny's main ingredient - which at current prices brings the cost of making the coin to 1.4 cents each.
Kolbe says his bill will address both the rising production costs as well as other provisions for modernizing the currency system.
Representative Jim Kolbe (R-Arizona)
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Kolbe was the sponsor of the Legal Tender Modernization Act of 2001, which failed to gain much support in Congress.
Over half of the U.S. Mint's coin production comes in the form of pennies, which are made of 97.5 percent zinc.
The cost of producing the coin has risen from 0.97 cent per penny in 2005 to 1.4 cent per penny. At that rate, the Mint would spend some $44 million producing pennies this year, nearly $14 million more than in 2005.
The world market in zinc has been squeezed by cyclical price rises, increased demand from industrial nations and a production bottleneck.
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.
Kolbe's 2001 legislation proposed that cash transactions ending in 1, 2, 6, or 7 cents should be rounded down to the nearest 5 cents, while transactions ending in 3, 4, 8, or 9 cents would round up. Credit and debit card transactions could still be valued to the nearest cent.
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If you can conceive it, you can achieve it. -Napoleon Hill
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 07/18/2006 : 09:29:03
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"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."
This doen't make sense. Going over to nickels made out of 75% copper and 25% nickel would be more expensive than zinc cents. A zinc cent cost about 95% of its face value. A nickel cost about 134% of its face value. So if the mint has to make more nickels to replace zinc pennies where would the savings be?
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If you can conceive it, you can achieve it. -Napoleon Hill |
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ImperialFleet
Penny Pincher Member
USA
217 Posts |
Posted - 07/18/2006 : 15:17:45
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It would benefit Kolbe's constituency.
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“Ultimately, the Fed can flood the system by buying any kind of asset, or even dropping bank notes from helicopters" -Fed Chairman Ben Bernanke |
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5 Posts |
Posted - 07/25/2006 : 01:03:28
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| Won't they just replace the copper in the nickel with zinc? |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 08/03/2006 : 17:04:08
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| Ballcopper, at first I thought the link was a joke when I saw the guest's name. The announcer did a good job pronouncing it, and could have gotten himself in trouble with the wrong pronounciation. Interesting views on the whole metal market. |
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44 Posts |
Posted - 08/03/2006 : 21:46:22
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| Thanks for the link Ballcopper, much appreciated |
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Kill-the-penny bill on its way.
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