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deleted
4 Posts |
 Posted - 01/22/2007 : 18:41:50
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Seems to me like they would have to do it with the whole array of
clad coins, nickels on up, if they did it with pennies...
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Coin shortage could turn pennies to nickels
Mon Jan 22, 2007 4:34pm ET
NEW YORK, Jan 22 (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. Continued...
"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.
© Reuters 2007. All Rights Reserved.
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Canadian_Nickle
Penny Hoarding Member
Canada
938 Posts |
Posted - 01/23/2007 : 00:38:40
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So how about it, US penny hoarders: If you could take your hoard to the bank and cash it in for 5 cents/coin, would you do it?
HoardCode0.1: M28/5CAON:CA5Ni27615:CA1Cu1200:CA100Ag345:
CA10Ag250:CA50Ag100:CA25Ag30:CA500Ag48:US100Ag20:CA1000Ag16
How to read a HoardCode:
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just carl
Penny Hoarding Member
USA
601 Posts |
Posted - 01/23/2007 : 07:38:57
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I suspect articles like this are rather bogus or jus based on erroneous statistics. If there was a coin shortage, banks everywhere would just put our a request for customers to bring in thier change. Contrary to this numerous banks charge a fee for bringing in change. Some stores have coin accomelator and chager machines that will give ou dollars for your coins but also charge a percentage fee for the service. Therefore if there is a coin shortage these organizations haven't heard about it yet. In fact our toll system here in Illinois is trying to get away from people using change for the tolls by having automated, electronic methods of paying for tolls. This will eleminate some jobs, eleminate gates and eleminate massive coin accomeulations that are difficult to transfer, count and transpose into cash. (Cash is Money)
Carl |
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n/a
deleted
78 Posts |
Posted - 01/23/2007 : 13:33:38
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All the article really says is that some guy at the fed things it would be a good idea. This is a long way from getting Congress to do such a thing. I think it would make quite a mess, since everyone would be trying to get pennies as fast as possible right before the change.
If they did this, I'd be first in line to turn in my pennies, since I'd get more than twice the copper value. Then I'd go and buy some gold or silver coins or something. |
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Canadian_Nickle
Penny Hoarding Member
Canada
938 Posts |
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Metalophile
Penny Collector Member
USA
320 Posts |
Posted - 01/26/2007 : 07:52:40
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quote:
Originally posted by just carl
I suspect articles like this are rather bogus or jus based on erroneous statistics. If there was a coin shortage, banks everywhere would just put our a request for customers to bring in thier change. Contrary to this numerous banks charge a fee for bringing in change. Some stores have coin accomelator and chager machines that will give ou dollars for your coins but also charge a percentage fee for the service. Therefore if there is a coin shortage these organizations haven't heard about it yet. In fact our toll system here in Illinois is trying to get away from people using change for the tolls by having automated, electronic methods of paying for tolls. This will eleminate some jobs, eleminate gates and eleminate massive coin accomeulations that are difficult to transfer, count and transpose into cash. (Cash is Money)
Carl
I don't think the point of the guy at the Chicago branch of the FED was talking about a coin shortage. He's proposing eliminating one cent coins by declaring pennies worth five cents. That solves the twin problems of nickels and pennies costing more than face value to produce. I assume according to his proposal that the Mint would either quit making nickels and keep making copper colored coins which say "five cents", or the Mint would quit making copper colored "pennies" and change the composition of the current nickels to something else, whilst the billions of existing pennies would be "upgraded" to five cents. I don't see much chance of this happening, it's unprecedented, and the US Mint likes to follow precedent. More likely they'll just stop making pennies after 2009 and change the composition of nickels soon.
Funny thing . . . when someone says "cash" I think coins or specie, not paper fiat money. Must be a part of my Chinese heritage, even though I'm 2 1/2 generations removed from there. In the old days the Chinese had bronze coins with holes in them. They would tie up stacks of these coins with strings, and these coins were called "cash". I'll have to look for some next time I'm at a coin show.
Metalophile |
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 01/26/2007 : 09:42:30
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quote:
Originally posted by Metalophile
I don't see much chance of this happening, it's unprecedented, and the US Mint likes to follow precedent. More likely they'll just stop making pennies after 2009 and change the composition of nickels soon.
If the Mint likes to follow precedent, they're more likely to switch to clad steel cents and nickels. They've changed composition twice in 50 years, but they haven't retired a denomination for almost 120 years. Americans seem protective of keeping our currency as familiar as possible, and complain at major upsets of the status quo. Look at how people gripe about the changing bill designs. No, I think there's more support for a composition change than for penny elimination, which would necessitate price rounding. Think of the public uproar that would cause!
Inflation has gotten us away from small amounts that our coins traditionally hold, and yet are resistive to $1+ coinage. Inflation is the real criminal. If it were up to me, I'd arrange for controlled deflation, so that the penny would have buying power again. I don't want to see America 20 years from now where, say, Mexico was 15 years ago with 200 peso coins.
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Penny Search Totals:
806 zincs (1982-2006) 77.6%
227 coppers (1959-1982) 21.8%
4 wheats (1940-1950) 0.4%
1 dime (2004) 0.1%
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n/a
deleted
479 Posts |
Posted - 01/26/2007 : 11:22:52
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Monetary inflation has run rampant in recent years. Mr. Greenspan's span in office produced most of this green, but it continues unabated under BenJammin Soloman Bernanke.
All this monetary inflation MUST eventually result in an equivalent amount of price inflation, or else a crash.
The US dollar is quite frankly full of hot air and people are increasingly beginning to smell the blood in the water. Here come the sharks, let's throw them a hunk of fresh meat to keep them happy for at least a little while longer.
Enter Francois Velde, senior economist at the Chicago Fed.
His is the unfortunate fate of having blurted out the truth in a period of near universal denial.
Into the meat grinder he goes. I expect that he will be sacrificed (retired) now that he has served the function of GRADUALLY beginning to wake up the population to the notion that their money is in trouble.
.................................................
A billiard ball dropped from 1,362 feet (height of the South Tower) in a
vacuum would require 9.22 seconds to hit the ground. How then did the
towers collapse in 10 seconds and 11.4 seconds, and why has not one
member of the mainstream media insisted on honest answers from the
government in this regard?
"The individual is handicapped by coming face to face with a conspiracy
so monstrous [that] he cannot believe it exists."
- J. Edgar Hoover |
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Breaking: Pennies to be "Rebased"?
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