US Pennies To Be Worth Five Cents?

Z-MaxX writes to point out Reuters coverage following up on last month's news that the US Mint has made it illegal to melt or export US coins in bulk, since the value of their constituent metals — in the case of pennies and nickels — now exceeds their face value. The new story quotes Francois Velde, senior economist at the Federal Reserve Bank of Chicago, who thinks the new rules will not be enough — he believes that determined speculators are already piling up pennies. Velde suggests "rebasing" the penny to be worth five cents. Quoting Velde: "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."

Comments

Melt em!

[FireBug]

Just stop making pennies and let the public melt them down - that way the Mint won't have to deal with disposing of them and they'll be put to some better use (recycle! or something) ... but that's just my 10 cents

Inflation!

[Anonymous Coward]

Weird how you focus on this topsy-turvy.

The U.S. is suffering inflation. It's not that the cost of metal is increasing, it's that the value of your currency is falling. Fast.

This week it very, very, nearly reached £1 = $2 for the first time in my lifetime.

You REALLY NEED TO WORRY ABOUT THIS INFLATION, not the value of the metal in your coins.

Re:then make them out of plastic or such...

[Homr Zodyssey]

Getting rid of $1 and $5 bills is madness! Think of how it would affect the adult entertainment industry! You can't stuff a $1 coin in a G-string.

two points

[circletimessquare]

#1. your points about vending machines are completely valid. they are a major impediment to change. however, any currency change would be gradual and would be planned in tandem with vending machine manufacturers. it's not like someone is going to snap their fingers and suddenly one day we're all using plastic monopoly money. if given a 10 year window to change, simple retirement of vending machines as they wear out is enough. then the cost involved is minimal, as new vending machines have to be built anyways, only the redesign needs much effort

and if you say any cost is unacceptable, then you really aren't in mental acceptance of the obvious shortcomings of current us currency. any minimal cost involved in a changeover will be greatly overshadowed by the cost gains due to currency with a superior design: efficiency, ease of use, etc. but that you don't seem to give much weight to these factors brings me to point

#2.

As a major force in the worldwide economy, the US would resist bills that look like play monopoly money. There is a certain elegance and history to the look of the bills, which was established centuries ago. The resistance to candy colored cash is in part to protect that heritage and image.

this argument baffles me. that the us currency must always look the way it does is a sort of mindset i can't comprehend. why is this so important to you? doesn't functionality and intelligent design trump sentimentality and nostalgia? it doesn't even make sense from a point of view of a traditionalist: look at how different us currency is from the 1800s. what did you say?: "There is a certain elegance and history to the look of the bills, which was established centuries ago." excuse me, what are you smoking? centuries ago? you need to familiarize yourself with the history of american currency to a level that a casual elementary school coin collector already grasps

you could be saying that the us needs to be conservative about its currency since its so important to the world economy. well that's completely wrong. #1: the euro has only been around for a few years and is already supplanting the dollar as the de facto currency for reserves/ exchange on the international market. so much for the value of tradition. and #2: counterfeiting, especially the extremely good north korean kind is an argument for a radical redesign in the interest of preserving the hegemony of the american dollar in international exchange. in other words, you have it completely backwards: international confidence in the dollar is served by radically changing its design, and is undermined by allowing it to stay the same, in its easily counterfeited form (for the excellent north korean forgers). recent changes to the $50, $20, and $10 in fact is exactly because of this kind of counterfeiting. too bad the us mint only considered counterfeiting, and not ease of use, in their recent redesigns (and so much for your vending machines can never change argument too right?)

i really don't understand sentimentality and nostalgia as the prime motivating factor when it comes to currency. frankly, who the f*** cares what the currency looks like? usability, a concept a website populated with techies should easily grasp, trumps all. or at least this concept should trump all, but it obviously doesn't with you. the concept that seems to trump all in your mind is inertia. i frankly don't understand how your thinking on the subject has any value. sentimentality and nostalgia are completely useless subjects on the topic

Re:This is bad but in the wrong sense.

[Control Group]

I was going to lay down a thick bed of sarcasm here, but instead I'll just ask you to consider the surveillance, privacy, economic, and tax implications of replacing a fungible, untraceable medium of exchange (cash) with one that's inextricably linked to your identity, records every transaction as an inherent part of the transaction, and can be watched in real-time from anywhere on the planet.

that's just sentimentality and nostalgia talking

[circletimessquare]

the equating of the look and the feel of the american dollar and its "heft" is just a subconcious connection that depends upon factors going on in your emotions, not in any intrinsic value to the actual design or look or feel of the bill. pick up a roman coin and you will think "gee, nice old coin" and thats it. but a germanic tribesman from roman times though would pick up the same coin and fell the "heft" you are talking about, because he equates that coin with the dominant military and economic machine of his time in his mind. same with you

you have no such equating going on in your mind about the roman coin. and that same germanic tribesman, upon seeing an american dollar, would not feel the "heft" you speak of either. he'd just think it was pretty paper, and probably wipe his ass with it. so the design of the dollar itself is not what gives you the feeling you get when you see it, it is your own mind. therefore, the design of the dollar can be changed, and 20-30 years from now, assuming the usa remains a strong country, a younger canadian tha yourself would feel the same "heft" you speak of, no matter what fruity colors a new radically different dollar would sport

i remember picking up a nazi coin in a friend's collection of coins when i was a teenager, and the thing had menace. i thought it was evil. it definitely had "heft" in my mind. but in actuality, it was quite worn and light weight and cheap looking, since the nazis needed all of their valuable metals for their war efforts. in essence, there was nothing intrinsic about the design of the nazi coin that gave it the "heft" i felt... in fact, it was quite cheap in design. my feeling about it was all psychological, and it all went on in my mind, and that feeling depended completely upon factors that had nothing whatsoever to do witht he actual look and feel of the coin itself. same with your feelings and the american dollar

in short, your canadian currency is superior to american currency. simply because its more usable than ours. and that concept completely trumps your weird psychological feeling of "heft" that you speak of