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Melting Coins Now Illegal In the U.S.
A number of readers have noted the action by the U.S. Mint to outlaw the melting down or bulk export of coins. This has come about because the value of the precious metals contained in coins now exceeds their face value.
The Mint would rather not have to replace pennies (at a cost of 1.73 cents per) or nickels (at 8.74 cents). The expectation is that Congress will mandate new compositions for some U.S. coins in 2007.
If this keeps up, .002 cents really will = $.002
(Sorry, but it had to be said...)
Can I continue to light my cigars with hundreds?
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They stopped making em out of copper before the 50's (I forget exactly when its finals week XD)
they make them out of an electroplated nickel alloy now..
Dare i say it shouldn't just be oil we should be concerned about running out?
JUNK METAL coins are now worth more than their face value... I think this is a sign that asteroid mining could be feasible (the average nickel iron monster is worth several trillian.. not counting any incidental precious metals)
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A worthless coin anyway.
Dada21 will be along to spout something about precious metals, followed at 11 by a film.
Only three things are certain; death, taxes, and apocryphal quotations - Ben Franklin.
As much as I can understand why they do not want people melting down these coins, how much is the metal really worth in it's "raw" form unrefined?
My second question is how much would it cost to refine these metals to make them worth the most? Copper prices are sky high right now but a lump of melted pennies probably wouldn't be able to be sold as a "copper" since there are a number of other metals involved. Is this something that can really be profitable?
Dedicated Cthulhu Cultist since 4523 BC.
It might just be more feasible to get rid of pennies altogether.
l
here is an article i have found to be particularly illuminating.
http://www.straightdope.com/classics/a981009a.htm
I wonder how much of this is because of "increasing value of precious metals" and how much is "The devaluing of the American dollar" (I recognize that from the perspective of Americans this would be the same thing); if it is based on the dollars value, why wouldn't you attempt to correct the problem with the dollar (by not running a 1/2 trillion dollar deficit) rather than finding cheaper materials?
Since they only penalty is a fine, can you pay the fine out of the money you made selling the metal from the melted down coins?
Apology to Ubuntu forum.
lemme just grab some tin foil out of the kitchen....... Seriously though, I wonder what they will use for the new coins....
Plastic?
I mean, it's not like we're running short on oil.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
And for folks who'll ask, replacing cash with electronic transactions isn't the answer. I for one like the anonymity of cash and the fact that I'm carrying a physical object of known value that can handle some pretty heavy abuse before becoming worthless.
-b.
How can the US Mint make something illegal, only Congress has the power to pass laws. Someone please explain.
I'm too busy straining the gold out of seawater and reclaiming the platinum out of old catalytic converters to mess with melting down pennies and nickels...
Insisting on "correct" English is like saying that there is only one, definitive recipe for chili.
Perhaps it's time to start seriously thinking about withdrawing the penny from circulation. You can't buy anything with a penny anymore. You only really use them for two reasons:
1. Stores like the $X.99 price point, because it subtly makes people think they're paying $X rather than $X+1. $X.95 is also popular, and could work with only nickels.
2. Sales tax is based on percentage, so even if you have a round price like $1.00, you may end up with something like $1.07.
OK, 3 reasons if you're paying for gas with cash. But note that gas stations already advertise prices to the thousandth of a dollar -- as far as I know, the US has never actually minted a mil -- and they already get rounded up to the nearest penny. I'm sure gas stations would be quite happy to round to the nearest nickel instead.
Of course, given how many transactions are electronic these days, withdrawing the penny wouldn't necessarily alter credit or debit transactions.
Take them out of circulation, and then the Mint can do whatever they like with the alloys. Or if they're smart, they'll use alloys for a $1 coin and stop making the $1 bill.
Under what authority can the US Mint create new law? The US Mint, the Secret Service and the Treasury are all in the enforcement, not the legislative branch.
Some AC said it was illegal to mutilate or deface paper money. Uh, no, it's not. It's also not illegal to cut up a US coin in some artistic fashion and sell it for a higher amount; this is done all the time. In terms of defacement, you can't stick a picture of Kennedy on a quarter and try to redeem it as a half-dollar, and the same goes for gluing a "20" on the corner of a one-dollar bill. That's simple fraud, in this case called counterfeiting.
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Realizing pennies aren't (any more) made out of copper: Priceless
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Making melting down the coins illegal is one of those things that will just give petty criminals ideas.
They should just add some sulphur to the coins. It makes them more machinable (not much use for stamped coins though) and utterly destroys their value for recycling.
Maybe the real reason they're doing this is that they've added RFID chips to coins and they don't want people destroying lots of them.
the more they over-think the plumbing the easier it is to stop up the pipe
Time to start melting Canadian cents for all your copper-reclaimation needs -- 98% copper until 1996.
Computers are useless. They can only give you answers.
-- Pablo Picasso
youre talking to a certified economist who is essentially done with the relevant courses at a top 20 institution.... who also happens to be on his 36th hour awake doing mind numbing research, papers, and studying for finals.
Wow.. I made a mistake which, though avoidable, was not a high enough priority to me to avoid.
Maybe I should be shot?
seriously.. for all i know you could be just as tired and grumpy as i am.. but the attack was unnecessarily vicious.
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Err... no.
Every nation that has done this rounds to the nearest nickel, not the next highest.
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Sounds like somebody needs a hug. C'mere, big guy.
Why yes, I AM a rocket scientist!
Phone companies around the world are having problems with people cutting down their lines to steal the copper.
The US had a previous round of making it illegal to melt down coins - for a number of years in the late 1800s and early 1900s, the US was on a bimetallic standard, with both gold and silver exchangable at a fixed ratio, so depending on the relative market value of gold vs. silver, people could play games with the rates, and some years it made sense to take dollar banknotes to the Treasury and get coins in one of the metals, melt them down, and sell the metal as bullion, so it was made illegal. This was also tied up in politics of farmers' loans (e.g. if you had a debt in dollars, could you pay with the cheaper metal or did you have to pay with the more expensive metal), mining interests, etc.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
I always thought that the mint should make all coins out of radioactive waste. It would solve the problem of nuclear waste disposal. It would encourage consumers to spend money - quickly. This would help the economy. And it would definitely discourage hoarding of currency.
[Insert pithy quote here]
How hard is it to realize that if it costs your more than 1 cent (or 5 cents) to make something worth 1 cent (or 5 cents), then don't make it. Basic enconomics Duh, if the pennies and nickels are worth more as materials than they are as currency then we SHOULD melt them down and use those materials for some better purpose and find some cheaper material to make our coins.
The truth is, any nation that mixes common metals (not say, silver or gold) in their coins doesn't need to worry about the melting-down issue unless the metal prices go through the roof. It just wouldn't be profitable. Now Canada, I believe their nickel-based coins are pure or nearly so. That might be a different matter.
The world is my oyster. That's why it's always in a stew.
I more than agree with you and the very very few people who actually understand the tragedy of the US monetary system and how it's affecting the world. To that end, I recommend the following:
At risk of sounding like Stallman, I suggest creating the habit of referring to the "Federal Reserve" as "The Federal Reserve Corporation." This will help to drive home the fact that the U.S. monetary system is in the private hands of bankers and not under governmental control which is supposed to be proxy to the people of the United States.
Keep in mind that no one in the government or in the Federal Reserve Corporation are telling anyone any lies about it. They just aren't telling anyone anything they don't want them to know and they do everything they can to keep people thinking what they want them to think.
At some level, everyone knows about it but they haven't made all the necessary connections. For example: Ask anyone what are the three areas of government? They'll likely answer Executive, Legislative and Judiciary. But we hear with every news show that "The Fed" is doing this, that or the other with "the interest rates" to do this that or the other with the economy. And exactly WHICH branch of government does "The Fed" work under? No one can answer it and it doesn't bug them that they don't know it either. There's talk about the president nominating the chair of the Federal Reserve [corporation!] and all this but they say nothing about what are the qualifiers might be for being nominated. They are bankers already a part of the Federal Reserve Corporation of course... they are just rearranging the deck chairs on our titanic and it really doesn't matter who they name -- it's all the same people.
So please, for everyone who understands the nature of the problem, let's just stick to reporting the facts that no one seems to see in front of their faces. The Federal Reserve Bank Corporation is a Delaware corporation founded in the early 1900's (1913 was it?). It's a privately held corporation so you can't own stock in it. And *ALWAYS* refer to it by its full correct name. Not "The Fed." Not "The Federal Reserve." But by a name which will remind everyone where the interest lies: "The Federal Reserve Bank [Corporation]."
(Also of interesting note: every time you hear about where individual income tax monies are being used, you have to know that the IRS collect money from individuals to pay down the interest on the loans that the U.S. Federal Government has taken out from The Federal Reserve Bank. All other taxes collected from other sources and loans taken from The Federal Reserve Bank corporation are how other things are paid for.)
And finally, a question to those who know more than I do on this subject: Does the Federal Reserve Bank coporation pay taxes? If yes, how much? If no, why not?
It may be peak copper, but there is another possible reason:
Consider for a moment that gold and silver are normally used as a hedge against inflation. Over the last 20 years they have not kept up with inflation though. If you do any reading on the subject some claim this is due to central banks manipulating the price of gold/silver to help disguise inflation. If the above is true, gold and silver prices would stay depressed, but inflation would show up in other commodities. E.G. base metals as they have not been used as a typical investment hedge and thus the central banks would not have tried to manipulate their prices directly.
The Fed quietly announced thanksgiving weekend in 2005 that they would no longer publish the M3 money supply figure. For those who don't know the M3 figure is the estimate of total US dollars out in the world. It was used by many as a direct gauge of US monetary inflation policy.
Here is a link to a reconstituted M3 figure Some think the removal of this information was done to hide the true scope of the impending financial problems that are on the horizon.
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No discussion of currency destruction is complete without mention of Bill Drummond and Jimmy Cauty of KLF burning one million pounds.
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On another note, kudos for linking to the Straight Dope (great site).
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It isn't just a decrease in the value of a dollar, it's also an increase in the value of the metals.
Shadus
All "hard money" is just an accounting fiction anyway. As are paper money and credit.
Or, rather: For everything else, there's MasterCard. :-)
Watch some TV dude!
It must have been something you assimilated. . . .
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It isn't just a decrease in the value of a dollar, it's also an increase in the value of the metals.
I'm sorry and this isn't personal but I'm amazed at how little financial acumen we collectively have. This is the financial equivalent of being surprised that 40% of all sick days are taken on Monday and Friday.
The dollar being worth less and things costing more are exactly the same phenomenon. The value of the metals did not inherently increase. Were this lmited to a specific metal or commodity I would believe it, but it is very broad based and therefore can be traced to a monetary phenomenon (record low interest rates, loose lending practices, and increased consumer/government debt).
The dollar being worth less and things costing more are exactly the same phenomenon. The value of the metals did not inherently increase.
The value of metals DID increase relative to other commodities. So the parent post is right to say that it is a combination of a general decline in the value of the Dollar and an increase in the price of Zinc and Copper.
I like my beverages with warning labels!
However, gold, copper, nickle are also commodities which can change in relative value, just like money or coffee. It just depends where the value goes. You could think of them as a cloud of things all moving up and down relative to one another. There is no fixed point other than one you choose, like gold or dollars.
At the moment, yes, the dollar is in freefall, demand for it is reducing and the supply is as high as it's ever been.
Deleted
In case you're wondering like me why this wasn't already against the law, I looked it up and the relevant section of US code appears to apply only to bills and banknotes. I guess this also explains why those tourist-trap penny presses are also still around.
I think there is a world market for maybe five personal web logs.