In my recent travels, I came across an interesting story about the cost of pennies and nickles.
On Mish's Global Economic Trend Analysis (http://globaleconomicanalysis.blogspot.com/) , he points out that the true valuation and cost of a penny and nickel is not $.01 and $.05 respectively, but that in reality it costs "2.4 cents to make one penny in 2011 and about 11.2 cents for each nickel."
To put it another way, the United States is essentially wasting money for each undervalued currency coin we create.
As Mish points out "Given the number of coins that the mint produces -- 4.3 billion pennies and 914 million nickels last year alone, those costs add up pretty quickly: a little more than $100 million for each coin."
This immediately reminded me of those old schoolyard tricks in which you would find the most gullible classmate and convince them that since you had a larger coin that it was worth a greater amount of money. I hate to admit that on the first or second occasion I fell for this swindle.
But Mish raises a great point. Why do we continue to forge coins of such a small denomination when they're rarely, if ever, used anymore in this age of debit and credit cards? Especially if it costs so much more than their finished value. We'd be better off scrapping the idea of coins under $.25 and adjust our pricing gauges.
What better time than now to do this either? We're in the midst of a killer recession and our government is creatively trying to reverse the catastrophes that compound almost daily; why not create a program or fiat that changes our currency format into something consistent with our technological age? Why not eliminate what doesn't work and invent something new and better?
Obama, at least according to his rhetoric and the statements within these articles, is in favor of this sort of empirical change.
Full article here: http://globaleconomicanalysis.blogspot.com/2012/02/obama-wants-cheaper-pennies-and-nickels.html
With source material from here: