This is not a ‘mindless crank’ post (at least, I think it isn’t…), but in my wondering about how our economy is working, some small things still rankle me… For instance, it would seem apparent that prices have been rising in almost every category in our economy over the years, is there a practical value in realigning our currency to fit our reality?
Is there a real use for the US 1 cent piece? I am aware that the actual value (in raw copper prices) is such that the one cent piece may well be worth more for its copper content than its monetary value. Is there anything in our retail economy which sells for less than 5 cents (as an individual product)?
What would be the economic costs to our country of we just rounded to the nearest nickel, and then rationalized our prices over time? For wholesale uses, if you buy products or supplies in such large quantities that these sorts of shortfalls could be ameliorated to some degree.
The opposing argument, something to the effect that these ‘fractional’ differences in value do add up to real ‘money’ as you look at the bigger picture… I only can say that gas sells for (ex.) $3.699… where does that 9/10’s of a cent come from? How do you present the idea of ‘mils’ in an argument like this? My only perspective in this debate is that I would like to minimize the total volume of the coins I am left with whenever I indulge in retail sales… pennies create an irreconcilable amount of ‘fuzz’ around monetary transactions, which serves no practical reason I can think of, other than my having to head to the bank every month or so to deposit my coin cup form my bedroom (where all of my pennies end up…).
Perhaps this will never rise to the level of a real problem in that more and more people and businesses are gravitating over to paperless transactions, credit card purchases (even for a cup of coffee…). Maybe my coin cup will become some sort of heirloom, in that it represents a time long gone by…
I found a link relating to my perspectives on this personally useless coin:
Did You Know It Costs More Than a Penny to Make a Penny?
http://gizmodo.com/5734677/did-you-know-it-costs-more-than-a-penny-to-make-a-penny
The amazing thing is that a US one cent piece has 1.62 cents worth of raw materials in it…I am amazed that there isn’t a run on this ridiculously undervalued source of copper…
The penny used to be primarily copper until the early 1980's, now it's 95% zinc. If it were still pure copper it's raw material value would be greater .. about 2.3cents given the prevailing market value of copper.
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