Melting Coins Now Illegal In the U.S. 778
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.
How much does it take to refine the metal? (Score:5, Interesting)
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?
Devalue (Score:5, Interesting)
So what? (Score:1, Interesting)
Re:Composition. (Score:3, Interesting)
Plastic?
I mean, it's not like we're running short on oil.
Possibly do as other countries did... (Score:5, Interesting)
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.
Pennies (Score:4, Interesting)
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.
under what authority? (Score:5, Interesting)
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.
casting and rolling my own tinfoil hat (Score:3, Interesting)
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.
Re:Paper? (Score:1, Interesting)
Copper's value is up worldwide (Score:3, Interesting)
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.
Scrap metal isn't that simple. (Score:2, Interesting)
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.
Re:If this keeps up... (Score:3, Interesting)
pressedpenny.com [pressedpenny.com]
What is the government definition of "bulk"?
Re:Pennies (Score:3, Interesting)
Re:How much does it take to refine the metal? (Score:2, Interesting)
WHen I was a young lad I worked in a large coin mech place and would routinely get trays of domestic and foreign currency (both real and fakes) to test.
A normal mech will have additional sections to test the coin - the track itself has a maximum size, coins too large will not fit, coins too thin fall through, some are filtered by magnetic elements as you suggest, others by electronically listening to the sound a coin makes after hitting a piezo element at the end of the run.
It was ingenious how accurate they were even back then..
Re:hard money == no inflation == no problem (Score:3, Interesting)
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?
Alternative explanation? (Score:3, Interesting)
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 [nowandfutures.com] Some think the removal of this information was done to hide the true scope of the impending financial problems that are on the horizon.
K Foundation burned one million pounds (Score:3, Interesting)
No discussion of currency destruction is complete without mention of Bill Drummond and Jimmy Cauty of KLF burning one million pounds [wikipedia.org].
Re:"precious metals" in pennies? (Score:3, Interesting)
By the way, if you stack some pre-'81 pennies alternating with post-'82 pennies and heat the whole mass over a bunsen burner, when the zinc melts the whole works fuses with a blue flash and you can pry big pretty pieces of brass out of the mass. It works much better if you melt the old ones, then drop the new ones into the melt, because the zinc dissolves before oxidizing, but it takes *quite* a burner to melt a bunch of copper.
Re:If this keeps up... (Score:4, Interesting)
To put it another way: I call bullshit.
Mil rate, anyone? (Score:3, Interesting)
All "hard money" is just an accounting fiction anyway. As are paper money and credit.
Re:get rid of pennies altogether? (Score:5, Interesting)
"Juicies" in the Phillipines have perfected a very entertaining way of picking up stacked change from atop a San Miguel bottle. The more skillful can return the stack coin-by-coin.
Shouts to any Nipa Hut or Fire Empire patrons in da house!
Re:If this keeps up... (Score:4, Interesting)
Yes, it should be a punishable crime... and some public workers should pay for it.
How is it possible to have things so upwards?
It is *not* "costing the government money"; it is costing the *taxpayers'* money. It is the government the one that is using something to guarantee something of less value. It is the government's fault and it is the government the one that should pay for such a deep arrogance about thrashing away tax-payers' money.
Well, the government declares owing me a cent by means of an item called "a cent". OK, that's the government side of the deal; it had all the powers to choose a piece of paper or a Ferrari to stablish its debt against me. But then, someone else offers me 1.73 cents for such a token. Why shouldn't I accept it? Despite what the government says, the *thruth* is that I'm liberating the government of a "contract" with me. In what crazy world is the debtor able to punish the one that wanted to condom the debt?
Re:Pennies (Score:3, Interesting)
Your actual points about using a nickel as the smallest physical piece of currency are all valid, and I would applaud such a move. I routinely throw pennies away (or in tip jars) rather than carry them home to my change jar, because it isn't even worth my time to do that. I would rather that stores simply not give them to me in change, so I don't have to deal with them. A few times at a local Chipotle they have given me a nickel instead of four pennies in change, which was a nice touch.
Re:Does anyone else here see the bigger problem? (Score:3, Interesting)
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.
Re:If this keeps up... (Score:3, Interesting)
In Australia & NZ the tax is included in the price of each item, whereas in Canada & USA the tax is applied afterwards. Prices in Canada / USA usually end in a 5, 0 or 9, but it is the tax being applied which gets you one of the other digits in the penny column. They would have to adjust to a system of including taxes in the price, which I have never seen anywhere in Canada/USA. Or they could start listing odd prices which don't end in a 5, 0, or 9, which would also be quite unusual for us.
Here in Mexico they have 10, 20 and 50 cent coins. Only the 50 cent coin is in common usage. A common thing to do here at grocery stores and 7/11 style convenience stores is to round up for charity. If your total comes to 100.56 pesos, they ask if you want to donate the 44 cents to charity, you pay 101 pesos and the tiny charity donation is listed on your receipt, and gives you a nice round number. The larger chain stores will give out those 10 & 20 cent pieces, or round, but all the small stores just set their prices to the nearest peso. But the sales tax is included in the price here, so they can do that easily without having to quote people odd prices (listing the price as 6.09 @ 15% tax to get $7.00, for example).