18 February 2013

Killing the Penny

The United States debased its dimes and quarters in 1965 from silver to cheaper, cupro-nickel-clad metals, driving the silver coins out of circulation into hoarding [Gresham’s Law – bad money drives out good money]. Now, instead of just debasing the penny, legislation is just eliminating it. And the trend is not just pennies, but cash in general. Hoard those pennies!

Killing off cash: Could new tech mean the end of money?
14 Feb 2013
Last week, Canada minted its last penny. Eurozone countries are working to restrict cash payments. Bitcoin is all the rage. Payments start-ups such as Square and iZettle are on a cash-killing mission, while non-profit organizations, governments, the World Bank, small businesses, multinational corporations, app developers, hippies, libertarians, Powerful forces are aligning against cash.

Canada stops distribution of penny coin
04 Feb 2013
The Canadian penny is being withdrawn from circulation because production costs have exceeded its monetary value. The Royal Canadian Mint will no longer distribute the coin to financial institutions around the country, but it will remain legal tender. Other countries that no longer use the penny include New Zealand, Australia, the Netherlands, Finland and Sweden. Despite the change on Monday, electronic transactions can still be billed to the nearest cent.

Canada Senate calls for one-cent coin to be scrapped
14 Dec 2010
A Canadian Senate committee has urged the government to remove the one-cent coin, or penny, from circulation, saying the cost of producing it exceeds its financial value. "The fact is that the penny is not of much use any more," the Senate Finance Committee chairman said. There are roughly 22bn pennies in circulation or about 600 for each Canadian citizen. It costs Canada an estimated 1.5 cents to produce each penny coin. The committee recommended the government stop production of the penny as soon as possible and that the coins currently in circulation be withdrawn during the next two years. A 2005 study found that getting rid of the penny would save more than C$131m (£83m; US$130m) in the cost of producing, storing and transporting the coins.

Kill-the-penny bill introduced
18 Jul 2006
Representative Jim Kolbe (R-Arizona) on Tuesday will unveil details of legislation to eliminate the penny. The move is in reaction to the rising cost of zinc - the penny's main ingredient - which at current prices brings the cost of making the coin to 1.4 cents each. Over half of the U.S. Mint's coin production comes in the form of pennies, which are made of 97.5 percent zinc. The cost of producing the coin has risen from 0.97 cent per penny in 2005 to 1.4 cent per penny. At that rate, the Mint would spend some $44 million producing pennies this year, nearly $14 million more than in 2005. Arizona is the largest copper producing state in the nation. Copper is the main material of the nickel which would benefit by becoming the lowest denomination of currency in circulation.

No comments: