Mint bans melting coins now worth more as liquid than loot

[Mind_your_head]

WASHINGTON -- Given rising metal prices, the pennies and nickels in your pocket are worth more melted down than their face value -- and that has the government worried.
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.

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.

http://www.suntimes.com/news/nation/172582,CST-NWS-mint14.article

[Rex]

1. How fucked up are we really? Well read this and consider.

'the cost of producing pennies and nickels exceeds the coins' face value'

That's called simple stupidity and will ruin America.

[JVS]

5. Not really. The cost of making $5, $10, $20, $50 and $100 bills...

is about $1.50 last time I heard about it. So even if we fall behind on some monetary items, we make it up in the creation of higher value items.

[Rex]

27. Just doesnt seem worth it in the longrun.

IMO.

[enki23]

2. a penny's worth of chemistry...

.

[yella_dawg]

3. Steel pennies again? n/t

[Beetwasher]

4. Doesn't That Sort of Defeat The Purpose Of Money

If it costs more to produce it than the coin itself is worth?? :wtf:

[JVS]

6. See #5

[Beetwasher]

7. Does It Work Like That Though?

:shrug:

But that also means it probably costs $1.50 to make a dollar, and I would have to think there are more $1 bills, nickels and pennies made than there are the other denominations.

I dunno, it's all so confusing.

Is this what it means when they say "It takes money to make money"? :evilgrin:

[JVS]

9. Actually the Mint and Engraving (paper money) are different departments, but it works alike

From the US mint FAQ

1. Does the United States Mint operate using taxpayer money?

No. Most of the United States Mint’s revenue comes from "seigniorage" – that is, the difference between the cost of making a coin and its face value. The Mint also earns revenues through the sale of numismatic products, such as coins, medals, and related items. In the last 2 years, the Mint has earned $1.65 billion in returning $600 million to the U.S. Treasury General Fund in FY 2004.
http://www.usmint.gov/faqs/index.cfm?action=FAQSearchResult


Hey Check this out. In 2016 Richard Nixon will be on a $1 coin similar to the sacajawea dollar!
http://www.usmint.gov/mint_programs/$1coin/index.cfm?action=schedule

[Beetwasher]

16. Nixon!?

Oh man...I'll bet they'll be popular though as collectors items. Heck, I might even pick some up, just for absurd posterity of it.

[JVS]

17. I'm getting a roll

But when they get the FDR ones, I'm going to get a year's worth of bar money in those babies

[Ian David]

8. Two things

1) Even if it costs 7 cents to make a 5-cent nickel, it's not like you're only using the coin once. That coin is going to circulate for years and years. The average lifespan of a coin in circulation is 25 years.
http://www.frbatlanta.org/invoke_brochure.cfm?objectid=83FD41E6-9AF0-11D5-898400508BB89A83&method

2) Paper money and modern coins used to just be a stand-in for gold. A one dollar bill was worth a dollar's worth of gold, which we dutifully kept in federal banks. It didn't matter how much the dollar bill cost to make. But then we moved away from the gold standard and added "In God We Trust" to our money, because... well... we had to trust SOMEONE, because we sure didn't have the gold anymore! So now, our money should be stamped with, "In China We Trust."

[Beetwasher]

14. "In China We Trust"

:rofl: sad but true. I probably shouldn't laugh. Actually, I should probably be learning how to speak Chinese.

[Mind_your_head]

15. It still seems like it would be better if the metal in the coin itself

were worth less than the denomination of the coin. I guess if it's anticipated to be a temporary price fluctuation in metals it won't make a difference, but if it's a permanent increase (inflation?), they could always change the nickel's value to 7 or 10 cents. :silly:

[mainegreen]

10. Well, that's the bite of a floating currency.

If they don't like it, then peg it to something inherently more valuable.

[eggplant]

11. I fail to understand how they can criminalize it

It's my damned penny, I can do whatever I want with it.

Can someone explain this to me?

[lillilbigone]

12. They can criminalize because they have hired people with guns.

And if you don't do as they say, those people will point those guns at you, and maybe even shoot you, if necessary to force you to comply with their laws.

[Richard Steele]

19. Bingo. nm

[Redstone]

13. No, I think it's actually THEIR money, not yours. Kinda like a software license.

You can spend it or keep it, but that's it. In fact, it was illegal to use coins for jewelry for a LONG time, because it was illegal to alter a coin.

Redstone

[Starlight]

21. Exactly. The face value is yours, but the coin itself still belongs to the government.

[Redstone]

23. Thanks for the confirmation.

Redstone

[NoPasaran]

25. Just imagine explaining to your cellmate

You're there on a penny-melting rap.

[Big Sky Boy]

18. This is nothing new

Pennies were made of solid copper until 1982 when they started using copper coated zinc.

All dimes and quarters prior to 1965 were made of solid silver when they started inserting copper disks. They called it "Johnson's Funny Money."

Coins are still more valuable to collector's then they are for their bullion. A 1964 dime can fetch $10.00 or more at a coin sale, but has less than 99 cents worth of silver.

If the Treasury is really threatening criminal prosecution, that's just silly.

First you have to find someone willing to buy scrap zinc. The energy to melt it down and reprocess it to remove the copper would cost more than anyone would be willing to pay right now -- that is unless we start experiencing hyper-inflation, which is likely.

The last time we had a stupid Texan in office who refused to raise taxes to pay for his war we ended up with a decade of double-digit inflation, double-digit unemployment and double-digit interest rates.

[Mind_your_head]

22. Great! Something to "look forward to"

unfortunately I think you're right about this:

"The last time we had a stupid Texan in office who refused to raise taxes to pay for his war we ended up with a decade of double-digit inflation, double-digit unemployment and double-digit interest rates."

Btw, welcome to DU Big Sky Boy! :hi:

[Big Sky Boy]

26. I hope it doesn't happen

but all indications are leading that direction...

Declining dollar. 17 consecutive interest rate hikes. Slow job growth.

Dems are going to have a tough row to hoe with virtually no fiscal flexibility thanks to dubya's spending spree.

And thanks for the welcome!

[wuushew]

20. Why is inflation tolerated?

Seems like a lot of material waste on the metal side as well as on the labor side as new catalogues, signs and fliers are needed to reflect new prices. Company valuation based on book value of assets is not helped by inflation either.

Why can't the total money supply both physical and that created through lending be tied to population growth?

I realize deflation would be bad for anybody who borrows money but why must a soda and snack bar cost more and more every year? :(

[JVS]

28. Inflation is tolerated because tight money often restricts growth.

Read up on German monetary policy of the late 1960's and early 70's. Memories of bad inflation back in the day had created a climate where Germany was actually revaluing (rather than devaluing, which is what every one else had always done under the bretton woods system) their currency. It actually stunted the economy.

[Katzenjammer]

24. Easy to solve. Move the decimal two places to the right and make new designs

Now the new copper penny will buy what the old dollar bought. Then we could bring back silver coinage.