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104 Comments
- Pharaoh777, on 10/12/2007, -3/+57No, because pennies are worth more than 1 cent. So, I could go to the bank and take all of my cash out in pennies - sell them as Zinc to be melted down, and make money on it. I can take that money to the bank, get more pennies, and repeat the process. Arbitrage opportunities exist.
Further, this is simply the cost of the materials. The cost to buy the hardware and pay the people that work at the mint make the use of the penny illogical. Taxes are being paid to create a currency that is unused and undervalued. - geminitojanus, on 10/12/2007, -4/+29"You could do that Pharaoh777... except that's illegal."
No it's not. It's illegal to modify money in a fraudulent way (i.e. make a defective mint Penny and sell it for a thousand dollars), but it is perfectly legal to retrieve the base metals from money, just as it is legal to possess shredded paper money (and use it for stuffing pillows, toys, etc).
Likely, if anyone started doing the above in any volume, they'd close this loophole, but as of today (and for the past 200+ years AFAIK) it's been legal. - carguy84, on 10/12/2007, -4/+28I still don't feel bad about throwing away pennies when I get them as change.
- Submerge, on 10/12/2007, -1/+21How can you call it worthless, it works because everyone agrees upon the denomination. If no one agreed on it anymore, it would be worthless. Gold and silver standards are inevitably worthless to your ideals as well, just everyone agrees that gold and silver are worth something, just like our currency standard currently. What effectively will ever be worth something is our essential needs like food, water, oxygen, etc.
- ghinch, on 10/12/2007, -5/+25alex, while your math may be a little off, your spelling is horrid, and your racism is off-putting, you're on to the essential point. it's not that it's profitable for one person to melt down a bunch of pennies. the point is that our government is wasting a lot of money making them, and that there's a valid argument about removing them from circulation.
- inactive, on 10/12/2007, -4/+22I thought what he said was funny. Does that mean I'm racist or just cursed with a sense of humour? Can I be extradited to the US for having one yet?
PS. I find sexist jokes funny too. And jokes about blacks, whites and everything in between. Not to mention Catholicism jokes, and I'm Catholic. : ) - aywwts4, on 10/12/2007, -11/+26Alex, You would have gotten a + digg, right up until the "So if I where a jew with a van" comment :
- Pharaoh777, on 10/12/2007, -2/+18I would assume it costs more than 2 cents per nickel to melt them down.
- WaterDragon, on 10/12/2007, -1/+16@ software2
"I've always thought that it was illegal to destory currency because it screws up the amount in circulation, which changes the value. The Federal Reserve works hard to keep a certain amount in circulation."
I'm glad you brought that up, but you are partly in error.
While it may be illegal to destroy (deface) currency, the federal reserve doesn't 'work' at all, for all the money they take from others!
They have this great scam, to get free money.
And in fact, the amount of American dollars in circulation is ever increasing, at a frightning pace,which is basically why the value of the dollar keeps declining, or, as we all know, prices of goods and rent, etc. keep going UP..all your life.
When any bank 'loans' money through a credit card, they are. in fact. creating that money out of thin air, as a debt -- thus again increasing the supply of (theoretical) dollars in circulation, and contributing to the constant price increases of everything.
But the Fed Reserve, which is a privately owned banking cartel, does this wholesale, by simply creating money as they want to, loaning it, and charging interest on it. They loan it to the US treasury, at interest, to cover all the federal spending.
And recently, the bush mis-administration declared that Americans no longer have a right to know the total number of american 'dollars' in ciculation.
Sorry to be so verbose.....just read this, if interested:
http://www.the7thfire.com/SR/mandrake_mechanism.htm - Protogoth, on 10/12/2007, -5/+20So pennies accidentally became real money and the writer of the article wants to fix it?
- chaosmachine, on 10/12/2007, -0/+14http://www.coinflation.com/is_it_illegal_to_melt_coins.html
- inactive, on 10/12/2007, -0/+14Well, it is not legal to destroy all money. The shredded currency in pillows and pencils is taken from the federal reserve after it has been officially destroyed.
http://www4.law.cornell.edu/uscode/html/uscode18/usc_sec_18_00000333----000-.html
As far as coins go, however, the law says that intent must be "fraudulent," so you may be ok.
http://www4.law.cornell.edu/uscode/html/uscode18/usc_sec_18_00000331----000-.html - Clevinger, on 10/12/2007, -0/+11Awesome, so for every 10 billion pennies I manage to pry from cracks and couches, I make $1,018,670. Screw this 9-5, I'm going penny hunting.
- franksmith, on 10/12/2007, -0/+9Most the pennies in my jar are copper... worth a lot more than $0.0101867 ;)
- chaosmachine, on 10/12/2007, -0/+9according to http://www.coinflation.com/ a nickle is worth 7 cents when you melt it down.. this includes all nickles made since 1946.. 7 cents is 40% profit.. so why aren't people buying nickles in mass and melting them down? (it's legal, btw)
- venom8599, on 10/12/2007, -2/+11A-ha! Finally this makes sense:
1.Pennies
2.???
3.Profit
Step 2 was melt them...makes perfect sense. - geminitojanus, on 10/12/2007, -3/+11You don't get it. The Penny (item, piece of copper and zinc) is now worth more than a penny (unit of currency). This makes it effective to melt Pennies and sell the base metals back for money.
Regardless of what our money is based on, this should never happen, or else people can essentially "make money" by melting the currency and reselling it. - dracostimpy, on 10/12/2007, -0/+8lakawak... Sure, people would have less gold since we multiply faster than the gold reserves, but each ounce of gold would therefore have MORE buying power. Think of it - a money that, if saved rather than pissed away, will be worth MORE tomorrow instead of LESS... that kinda makes sense, doesn't it?
Does it seem fair to you that if you put $10k under a pillow today, it'll only buy half as much stuff five years from now as it would today? Don't you think it ought to buy MORE ***** as a reward for not spending it the moment you got your grubby little consumerist hands on it? Protecting your wealth is what saving is all about, but how can you protect your wealth by saving when inflation destroys the value of those savings as is the case with our unbacked fiat dollar?
YOU are the fool. Watch that video I just posted and WAKE UP, jackass. - standalonematt, on 10/12/2007, -13/+21@Alex Apetrei - Nice ethnic slur *****
- inactive, on 10/12/2007, -5/+12I've always thought that it was illegal to destory currency because it screws up the amount in circulation, which changes the value. The Federal Reserve works hard to keep a certain amount in circulation. They typically don't care about small amounts, but if you were to melt down a million in pennies, they'd probably do something.
- inactive, on 10/12/2007, -0/+7Thank you very much. I've learned something, and wasn't yelled at, on digg! Will wonders never cease?
- JerTheRipper, on 10/12/2007, -0/+6@big65rich
Jeez... The man's making an important point. In 1922 and 1923 Germany started printing the paipermark (which wasn't backed by gold like the goldmark had been) to pay off war debts. When you print money without backing it doesn't have any real value... you hand someone a bill that is backed, they can take it and go to the reserve and get their gold, but if it isn't backed it is only worth the paper it's on. The inflation in Germany got so bad that they printed bill with denominations up to 100,000,000,000,000 mark because the money was essentially worthless.
In theory, if we were required to pay back debts that we owe, the same thing could happen in the US. - argoff, on 10/12/2007, -3/+9Software2,
Oh, I understand very well exactly why they did so. They were greedy, and they wanted all the profits to themselves. When they weren't "free" to print up fresh money to "invest", then that meant that they had to use peoples savings. They actually half to go thru the effort of earning depositors trust for the long term, they actually had to pay "real" interest rates back to depositors. Without that "freedom", they would never be "free" to loan money to people for unproductive reasons - yes, like a house. Before the federal reserve act of 1911, it was very common for young couples to save up 3 years and buy a home cash. Can you imagine?
The only problem is that over time, constantly printing up more money and loaning it out tends to lead to price increases, excessive debt, and speculative bubbles. Hmmm, lookie. The US had record high prices, record high debt, and a housing bubble! - hackwrench, on 10/12/2007, -0/+5Not just because the government says it does, but because the situation, whether through "mechanisms" or otherwise, is sufficient so that people agree that it is worth exchanging for it.
- dracostimpy, on 10/12/2007, -0/+6Posting this in defense of argoff since he's being dugg down:
http://video.google.com/videoplay?docid=-466210540567002553&q=money+banking+and
Watch that and then come back and digg him down if you still think he's wrong. - hodyoaten, on 10/12/2007, -0/+5OK, let's see... $10,000 worth of pennies...awesome, it's worth $10,187. Gas required to fire up furnace and heat 6834 pounds of metal... about $187, eh? Or thereabouts when you add in the time and trouble. Sounds like easy profits there.
- Pharaoh777, on 10/12/2007, -4/+9Our money is a symbol - and it is widely accepted around the world. Just because we have loans out does not mean the economy is suffering from not being on the illogical gold standard. This is the 21st century, get used to it.
- inactive, on 10/12/2007, -1/+6"Alex...actually hate speech is NOT protected under freedom of speech."
Says who? the day we pick and choose what speech is protected and what speech isn't is the day Freedom of speech has failed. The KKK still has meetings, and they still talk about burning blacks, neo-nazis still hate everybody and talk about it openly.
"I disagree with what you say, but I will fight to the death for your right to say it"
-Volaire
I'm not defending Alex's comment, just making a point. - inactive, on 10/12/2007, -5/+10deweyhewson, there's a reason why virtually every nation in the world has abandoned backing up currency with precious metals. Please, before you tell us why the world is wrong for doing so, realize why they did so.
- ElectricGrandpa, on 10/12/2007, -2/+6"It's called freedom of speech *****. Defend censorship all you want under whatever pretext you like, it's still censorship."
You can say dumb stuff all you want, free speech doesn't mean everything you say is brilliant.. and it doesn't mean you're not an idiot, and it doesn't mean we won't criticize you... - inactive, on 10/12/2007, -0/+4Minus the million or so it'll cost to melt them, including equipment and labor. Better check under the couch twice!
- EtherGnat, on 10/12/2007, -1/+5The penny is 97.6 percent zinc with copper plating.
The nickel is 75% copper with nickel plating.
The dime and quarter are 91.67% copper with nickel plating.
Congratulations on managing to be 100% wrong on all accounts. - limewood, on 10/12/2007, -0/+4Add on the costs of transporting 10 billion pennies and you'll probably only be in debt by a million. Sounds like a plan.
- inactive, on 10/12/2007, -3/+7I've always thought that it was illegal to destory currency because it screws up the amount in circulation, which changes the value. Could you give me a link or other resource that says otherwise?
- inactive, on 10/12/2007, -0/+2*Ahem* from a coin-collector's perspective:
Melting coins for the value of their precious metal does happen all the time. When the price of silver has risen in the past, older dollars and half-dollars have been melted. "Junk" silver quarters frequently get pulled and melted. Even the mint melts down errors and such.
The first thing I thought of was the World War 2 pennies. They switched from copper to zinc-plated steel in 1943, but they didn't hold up so well (you've probably seen black wheat-ear pennies, that's these) By 1945 the Mint acknowledged it's mistake and dumped recalled zinc/steel cents into the Pacific ocean - I believe somewhere long about 'Frisco.
Anyway, I wouldn't think of a panic market on pennies just yet. All pennies prior to 1982 contain sufficient copper to be worth more than face value, but you still find plenty of them kicking around.
It seems particularly appropriate to this discussion to close with: Just my 2¢ worth! - WaterDragon, on 10/12/2007, -0/+3@ choicetoes
don't worry...pennies might be taken out of circulation, then coins in general. What can you buy for less than a dollar anyway?
Inflation continues, as the thieves in the Federal Rreserve (privately owned international bannking cartel ) continue to rip off the US and everyone else. - inactive, on 10/12/2007, -2/+3I see economics continues to confuse the bejabbers out of people. Take it slow, folks, I've collected coins for a decade and worked for Citibank for five years and economics still fuzzes me some days.
In a paragraph: Try eliminating money. Now you have to barter goods for other goods. Eventually you get bogged down trying to fugure out how many cows your car is worth, etc. So we need to invent a standard. That's all that matters, is it's a standard. Like the http protocol or Unicode or English, there's no damn reason to use it at all except for when everybody else uses it. Historically, anything can be used for curency: rocks, feathers, playing cards, stamps. Anything that you and the person you do business with becomes money for the purpose of that transaction. But of course, the recipient has to find value in that money as well, and so you have to use something that will be accepted everywhere.
Consider all the purchases you make electronically. Figuratively speaking, credit and debit cards are just a system of points that all the banks trade up at the close of the business day. Just electronic data moving around. Where's your gold standard now?
True, without the gold standard I can't go redeem it for one dollar's worth of gold. But I can damn well redeem it for one dollar's worth of groceries, so it still has value. Only if the Federal Reserve blows it and starts printing too much money, buying back too many bonds, and all the other counter-balance widgets you learned in Economics 101 does the money become worthless... and it is slowly doing that whenever inflation happens. - deweyhewson, on 10/12/2007, -9/+11But our money is literally worth "nothing". It has value because the government tells us it does.
When you buy something you are effectively saying "I promise this will allow you to get what you want if you allow me to use it to get what I want" and the other person agrees. But if you ever tried to get out of the endless circle of work-buy-sell and obtain something of irrefutable value, you couldn't.
It used to be that this country had to have a certain amount of gold equal to the amount of money floating around the system to back up that money as having value. Because our brilliant politicians did away with that and gave us the not-even-close-to-Federal Reserve our money is worth the value of the paper it's printed on. - EtherGnat, on 10/12/2007, -0/+2There are other reasons to collect stuff other than making money. I think most people collecting the state quarters do it just for fun. I don't collect them, but I do enjoy seeing the designs they come up with.
- inactive, on 10/12/2007, -0/+2I have a silver quarter from 1964. It's worth more than $2 in silver. Yay!
- inactive, on 10/12/2007, -0/+2@koryo
Ha ha! Thank you! Somebody else finally pointed that part out.
When I worked at the bank, I used to blow my co-workers minds by pointing out that theoretically if you raked half of the cash in the US into a pile and *burned* it, you would automatically double the value of our currency.
Remember folks, currency is *also* a commodity, and prices are set by the relative availability of the currency to the item. If all dollars became cents overnight, the store would have no choice but to cut a $10 item to 10¢! - humanerror, on 04/03/2008, -0/+2You could also fold $1 bills into delightful origami swans and sell them for $2.
Holy crap someone is going to abuse this loophole to get rich and destroy our financial system in the process. Call the FBI. - koryo, on 10/12/2007, -0/+2Reducing the number of coins in circulation actually increases the value of money. Ask the U.S. Mint. They made $4.6 billion off of people collecting the state quarters.
http://en.wikipedia.org/wiki/State_quarter#Seigniorage - humanerror, on 04/03/2008, -0/+2WaterDragon> They're copper on the outside, zinc in the middle.
Zinc melts a lot quicker than copper, so if you cut a little nitch into a penny and hold it up to a torch, the zinc will turn into a liquid and poor out. And then in a few seconds it will be cool enough to pick up again. - toxicredm, on 10/12/2007, -1/+3I have a plan:
1. place several pennies in various locations
2. wait for global warming to melt them
3. sell the melted pennies
4. profit!
So if you find any pennies that look like they're just lying around, don't touch them, they're mine.
On second thought, I think I'll just put that money in a savings account and make even more money. - Ironcitizen, on 10/12/2007, -0/+2This has been going on for a long time. The most blatant was FDR when he took gold away from Americans and then revalued a massive slug if inflation into the dollar by revalunig it to $35 = 1 oz. of gold from $20.67 = 1 oz. of gold. So, a twenty dollar gold coin was suddenly worth more than twenty dollars for its gold content. That's why gold was confiscated first. Anyone who turned in their gold found the dollars they were paid devalued instantly. Additionally, anyone who owned bonds saw them devalued instantly. This was a massive transfer of wealth to the government. It was theft.
The inflation we have seen since then is also theft, just stealthier, - argoff, on 10/12/2007, -0/+2FrankBattaglia,
"why should we be rewarded ...."
Wait! Please, just listen to yourself. Are we like little doggies that need to be trained by the central bankers to engage in efficient and productive activity? In fact, it's they who are inefficient, central banking fails for the same reasons that any centrally planned economy will fail. The gold system is a balanced system. If people hoard too much, that reduces the gold in circulation, that drives up the value of gold and gives people who invest good deals that those who hoard won't get. If people spend too much, save to little, or go into to much debt to much, the limited amount of gold out there tends to limit the excesses. With the fed system, there is nothing to keep excessive debt from saturating the system, nothing to encourage savings, and nothing to preserve value over time. Hey lookie, the US has excessive debt and record low savings! - inactive, on 10/12/2007, -1/+2BTW: The US exploiting coin collectors by turning out "flavor of the month" coins is exactly why I got disgusted and sold all of my US coins and now collect only foreign. I never fell for the commemorative racket or the boxed mint sets before that.
But you other enthusiasts all have your fun saving your state quarters until retirement. You're in for a nasty surprise when you go to sell them and they're still worth a quarter. Because EVERYBODY ELSE SAVED THEM TOO! - Teaboy, on 10/12/2007, -0/+1Notes are not actually worth their value per se. I don't know about US notes, but English notes are an IOU, basically the Bank of England promises to pay the bearer the amount shown.
- bigstevec, on 10/12/2007, -1/+2form3hide wrote: A penny is still worth one cent regardless of how much it costs to produce it.
Yeah, except a penny is worth a lot more than one cent. Every time it is spent, it represents one cent during that transaction. The seller then spends (or invests or banks, whatever) the penny, bringing the value up to two cents. Repeat this several times a day every day for the life of the penny (assuming it's not sitting in a jar, natch) and you can quickly see that it is cost effective to spend over one cent producing each penny. -
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