Pennies And Nickels Worth More Melted Down
By Justin Gardner | Related entries in Money
You’re literally not going to believe this…
Because of the prevailing prices of metals, the cost of producing pennies and nickels exceeds the coins’ face value.A nickel is 25 percent nickel and 75 percent copper. The metal in one coin costs 6.99 cents for each 5-cent coin.
Modern pennies have 2.5 percent copper content with zinc making up the rest of the coin. The current copper and zinc in a penny are worth 1.12 cents.
Estimates put the amount of pennies in circulation at over 150 billion, worth $1.5 billion as is and $1.68 billion if melted down. That’s a loss of $180 million.
And let’s not forget our friend the nickel, who we lose almost 2 whole cents on. But I’ll still use the 1.99 cents to calculate the loss. Ready? 20 billion nickels in circulation worth $1 billion as is and $1.398 billion if melted down. $398 million lost by printing these things.
So what is the mint doing about this? What else? Making it illegal to melt your money…
U.S. Mint officials said Wednesday they were putting into place rules prohibiting the melting down of 1-cent and 5-cent coins, with a penalty of up to five years in prison and a fine of up to $10,000 for people convicted of violating the rule.
By the way, ABC has more about this from June of this year when the news first broke.
One last question…should we get rid of this coinage once and for all? Or at the very least get rid of the penny?
Ahh…how rich.
This entry was posted on Friday, December 15th, 2006 and is filed under Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
December 16th, 2006 at 4:40 pm
While on the surface this is an absurd situation. It is actually indicative of a much bigger problem, finite resources. Everyone on the planet wants to live the American life style.
Here is an article from the Asia Times on the subject.
http://www.atimes.com/atimes/Global_Economy/HL07Dj03.html
Another interesting point is that apparently world crude production peaked in December of 2005, yet the MSM is pretty much silent on that fact.
http://www.theoildrum.com/story/2006/11/30/8324/0934
December 16th, 2006 at 10:42 pm
To me, this indicates a need to reformulate US currency policy – why are we making pennies and nickels out of materials that are too expensive? Surely there are other alternatives…
One such alternative is to remove the penny from circulation entirely, which I know has been talked about for ages, rounding up or down as needed. In doing so, it would make sense to rethink the nickel as well, and perhaps make it smaller than the dime…I know I hate having nickels weighing my pocket down almost as much as quarters…
In fact, the only reason the dime is smaller than the nickel is because before 1965 it used to be made out of silver, which was (and is) far more valuable than nickel. Since then, their materials are far more similar, so it doesn’t make sense for the nickel to be bigger than the dime. Incidentally, that’s why you rarely see any dimes or quarters from before 1965, because when the silver market exploded a few decades back everyone was melting them down for the silver content. (I used to collect coins)
December 17th, 2006 at 6:03 pm
[...] Apparently, a pretty good investment. Start saving now, and buy yourself a smelter. Oh, and don’t get caught. [...]
December 17th, 2006 at 8:10 pm
Well, I’d opt for getting rid of the suckers. I really don’t have any use for change….
Of course, I don’t have any use for paper either. I carry plastic, which is better than money since I pay it off every month and get varying amounts from 2% to 5% back on it all….