I just had an idea.

Why not redefine the 'cent' to equal one-tenth of a dollar?
It won't really match up to its original meaning, such as when used in the word 'percent', which is taken to be hundredths, but at least we can start using those useless pennies again.

That would be the 'dec'.

This would cause economic devestation.

...Why not redefine the 'cent' to equal one-tenth of a dollar?...What would be your change on a purchase of $1.98?

Trivia:
In Australia, one and two cent coins were removed from circulation some time ago. All cash purchases are now rounded to the nearest $0.05.

I just had an idea.

Why not redefine the 'cent' to equal one-tenth of a dollar?
It won't really match up to its original meaning, such as when used in the word 'percent', which is taken to be hundredths, but at least we can start using those useless pennies again.
How would you value a 'dime'? The penny will probably go the way of the 'mill'. Remember those? They were valued at 1/1000 of a dollar (a mille).
Some states issued them for paying taxes, but the mill was never minted by the Federal Mint. Property taxes were based on mills in the past, and may still be in some cases, I'm not sure. One remnant of the mill you still see in the U S is at the gas pump. A gallon of gas is priced using mills, such as $2.99.9 per gallon.

pete,

same here in new zealand, this year the 5c is scheduled to be removed aswell(no longer distributed in july, no longer legal tender in october).

makes you wonder just who the government isy trying to please though, they seem to up interest rates every month to try and stop inflation, yet they go and eliminate small currency is bound to lead to inflation.

If every penny became worth x10 as much as it is now, inflation would skyrocket.

Current estimates by the US Mint place the number of pennies in circulation at around 140 billion

http://www.kokogiak.com/megapenny/twelve.asp

which is 1.4 billion dollars. They all become dimes, which is an injection of 12.6 billion dollars into the economy.

If every penny became worth x10 as much as it is now, inflation would skyrocket....The correctness of that would depend upon how you define "inflation." - If it is the number of pennies required to buy an item, say a hamberger, one could argue just the oppposite. If a Big Mac now costs 300 pennies after 1 to 10 the revision it should only cost only 30. Serious deflation. Please give your argument for inflation.

Since I have long advocated doing away with all paper money, I think that redefining the value of coins upward may not be a bad idea, if it were used to keep the price of a "basket of essential domestic items" with constant price. (See my prior post to understand that could be the effect. - I.e. deflation is the more likely result of a 1 to 10 re definition of the value of the cent. - In my example the now 300 penny hamburger would cost 30 pennies.) I.e. very small weekly re definitions of the value of the dollar coin would be made by the FED*, but that would only effect foreigners as the price of the hamburger, etc. would remain essentially constant (or annually increasing at whatever rate the FED thought best, without using high interest rates to control inflation.) Note, this "price freeze" does not inhibit innovation, investment etc. If you think you can persuade the public to buy "rat-meat" hamburgers at half the price, just do it and then, if you succeed, the price of hamburgers will drop. This because the value of the coins is defined in terms of a "basket of essentials", not any one item like gold. I.e. the normal "signals" needed to kept a free market functioning still exist with this type of "price freeze." The FED also re-defines the "basket" when it thinks desirable, just as the NYSE & Dow co. Re-define the DJIA. For example, "buggy whips" in the basket can be replaced by "cell phones" etc.

I am not sure there would not be some serious problems, but when Brazil had inflation of several percent PER WEEK!, a new unit of value, called the URE, was introduced, but it did not really exist for circulation. - The cost of every thing was, by law, stated in UREs and basically did not change. (What did change still was the relationship between the circulating currency and the URE.) Then, after a year or so for people to get use to the idea that prices could be stable, and that when the new currency was introduced, it would not be necessary to spend your entire paycheck the day you got it etc. the new currency, the Real, was introduced with the value of the URE at that time. Almost all economist are amazed at how well this worked to kill inflation in Brazil. It is running now, in a year, at about the same rate it was running in a week before. In fact, the Real is about 50% more valuable against the dollar than when it was first introduced!

Reason I want to do away with all paper money is the fact that to pay for the importation of even a small shipment of drugs, the wholesale dealer would require about a dozen trucks to move the payment coins (or leave a paper trail if done via credit cards, bank wires, etc.) for even a small wholesale deal. That "dozen truck payment" now easily fits inside a suitcase, if hundred dollar bills are available.

This solution to the drug problem is so obvious that I suspect the government must also be on the take to not apply it. This termination of paper money also makes a lot of liquor store etc. robbers think twice. - not easy to run away fast if carrying a 1000 silver dollars, which weigh about 55 pounds. Few would consider killing you for the value of the coins you might carry in your pocket. Why put up with all the drug related crime?
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*Got to give Bernanke and crew something they can do with tape over Bernanke's mouth. :rolleyes: :D

PS - I forget exactly what URE stood for and it was Portuguese of course, but it was something like Unit of Reference Estable. I speak poorly Portuguese but do not spell well in any language. I think the Portuguese word for stable starts with "E", if not the perhaps RE was from Unit of REference. (I have mild dyslexia.)

Trivia:
In Australia, one and two cent coins were removed from circulation some time ago. All cash purchases are now rounded to the nearest $0.05.
I've long thought we should get rid of pennies. They're so worthless most people won't even bother to pick one up they see laying on the ground. Stores leave containers of them on the counter so you can help yourself to any you may need. They're practically litter. GET RID OF THEM.

The correctness of that would depend upon how you define "inflation." - If it is the number of pennies required to buy an item, say a hamberger, one could argue just the oppposite. If a Big Mac now costs 300 pennies after 1 to 10 the revision it should only cost only 30. Serious deflation. Please give your argument for inflation.

WUH WUH WUH WHU! HUHUH?

I am making loud sputtering noises. You don't even know the definition of inflation and you're making economic recommendations?

Thank God we're not a true democracy.

You don't even know the definition of inflation and you're making economic recommendations?Your post below was so silly that I thought I would be kind and give you the opportunity to explain it and/or tell what none-standard definition of inflation could give some validity to your statement below.
If every penny became worth x10 as much as it is now, inflation would skyrocket.

In my post I gave the standard definition of inflation, in very simplified terms for just one item as:…{increase in} the number of pennies required to buy an item.and continued on to illustrate with one item the stupidity of your claim that increasing the value of the cent by factor of 10 would lead to inflation by:...If a Big Mac now costs 300 pennies after 1 to 10 the revision it should only cost only 30. Serious deflation. Still wanting to be kind, I gave you the opportunity to correct or explain your claim that a ten to one increase in the value of the cent would result in inflation by:...Please give your argument for inflation. but as your claim is so silly that you have no way to defend it, you decided to attack me personally. - That is the typical response of stubborn person who is ignorant and has made an obvious mistake. Are you an ignorant person or just naturally mean?

Inflationary, not deflationary. If the Big Mac is worth 300 cents now, it will still be worth 300 cents in the old system but priced at more than 300 cents in the new system once the cent has been intrinsically devalued by an arbitrary increase in how much is in circulation via the denominational reassignment. If after the conversion, the Big Mac was still priced at 300 cents, it would in effect be discounted.

...once the cent has been intrinsically devalued by an arbitrary increase in how much is in circulation via the denominational reassignment. ...I think that is, at best, circular reasoning. I fail to see how making the new cent worth 10 of the old makes it "intrinsically devalued." It seems to me it is made more valuable. That is, it is worth ten of the old, not less than it was.

If you are assuming that the government will issue ten times more coins, either new or old, yes each will be less valuable. - That is what is happening now in US as the government spends more than it takes in. The printing of money, increasing the supply does cause inflation, extreme at times as in Germany, but that is a separate question from the value of each coin or dollar.

If every one's salary and savings account were changed by factor of X and so long as the price of everything is changed by X also, nothing has happened with respect to real economy. Yet if, for example, X is large number (say 1000) and hair cut cost 10.000 dollars, one can argue that inflation has occurred. That is, why I asked for his definition of inflation. Is it the number of dollars required to buy an object or the number of hours of work required to buy and object? If the later, then even with X=1000 there is no inflation.

The number of coins/ dollars in stable circulation is not important, but it is nice not to have the ones in use with lots of zeros. - I.e. no nation likes (with Italy and a few other exceptions) to use 5000 of it basics currency units (dollars, pounds, marks, yen, etc) to buy an newspaper, but it really does not make much difference if it is a stable relationship between units in circulation and goods produced. Thus:
(1)Reducing the value of the cent by a factor of ten is no big deal in the real economy, but is "inflation" as inflation is often defined. (dollars /per hamburger etc.)
(2)Increasing the value of the cent by a factor of ten is no big deal in the real economy, but is "deflation" as deflation is often defined. (dollars /per hamburger etc.)

PS- We were discussing case (2).

Because inflation is linked to the amount of currency in circulation. You raise the value of the pennies in circulation, then you're basically just pumping 12.6 billion dollars into the system. Thus, the money needs to be revalued and ends up being worth less.

Because inflation is linked to the amount of currency in circulation. You raise the value of the pennies in circulation, then you're basically just pumping 12.6 billion dollars into the system. Thus, the money needs to be revalued and ends up being worth less. I have been assuming that 100 penies equal a dollar in both new and old systms, so change of penny value is change in dollar value also. thus the 12.6 billion new dollars (or any other number) also change value.

If we were to all agree to it we all could be billionaires, by adding some zeros to the currency and do not worry the merchants would add them to the prices also. However, this would not be inflation if inflation were the number of hours worked to buy a hamburger (just we now have 10,000-dollar hamburgers).*

If however we define inflation by the number of dollars required to buy a hamburger, then yes $10,000 hamburgers are inflation.

Does no one, but me, here understand that you cannot talk intelligently about this until the definition of inflation is clear? That is partially why, in my first post, I asked what his definition of inflations was.
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*If US does not get it "twin deficits" under control soon, you may see the $10,000 hamburger. Germany saw the 100,000 Mark hamburger result from printing paper IOUs to cover its deficits.

Yes, lets redefine the cent so the Federal Reserve can continually rape the American people, as well as the world, good idea.

I just had an idea.

Why not redefine the 'cent' to equal one-tenth of a dollar?
It won't really match up to its original meaning, such as when used in the word 'percent', which is taken to be hundredths, but at least we can start using those useless pennies again.

there are too many cents in the world currently... if something as this happens...the government economy might go amock. Lets redefine the tears from our eyes to count as cents. Each tear that drops shall count as a cent. And world shall cry so that tears will flow and form rivers of money...for money are made on tears.

Why not slowly adjust it while the fed. reserve accumulates the surplus, like a sort of miniature 'gold standard' ? That way, pennies could be cleaned from the streets.

Facial: what about using tears as money?

I say use copper, or perhaps barter.

I say use copper, or perhaps barter.On some SW Pacific coral based islands, where there were no native stones, the natives had a theft-proof money system basted on the ballist stones that a (English?) ship had left behind, many years earlier, when it loaded up with cargo of unknown plants and water for them. These stones always remained in what we would call the center of the village and all the natives (small population) knew who was the owner of each. If a man wanted to buy a pig or bride (perhaps there was little difference? ;) ) it was agreed and known to all that some particular stones now belonged to the seller, until he too need to pay for something. No one ever moved a stone, took it home, etc. That was taboo.

I bet only you could sit on your stone (or allow friends to do so, if you were the rich owner of many stones) during the "community meeting" if they had such things. - just guessing about this. Perhaps the value of the stone depended on its location (how good a seat it was) as I suspect all were about the same size.

I say use copper, or perhaps barter.Oh come on. Barter only works in small communities where most people are acquainted with each other and industry is primitive or non-existent. How do you organize a barter system if you're a barber and you need to buy a car? Do you offer everybody in the auto factory free haircuts for the rest of their lives? If you live in Oregon and the factory is in Tennessee? Do you trade haircuts for bread and the baker trades bread for shoes and the cobbler trades shoes for a roof and the roofer trades roofs for tires? Then you start over and try to score a fuel injector?

If you actually manage to pull this off, when you're done take a good look at the artifacts you've left behind for hundreds of people to use for keeping track of their trades, and you'll find that you've reinvented accounting.

More on other forms of money:

As most know, cattle have often been used as money and still are by many cultures. I mention this mainly to note that despite the fact that they often, for safety and ease of control reasons, graze together in large herds, each has an owner in most societies using "cattle money", who easily recognizes his. - The stationary stones (see "stone money" post other side of Fraggle Rock's) are much easier to know who owns which and more secure store of value (Stones never die or wander away. :) )

When the dollar crashes, :( you will think more highly of stone money.

When euro crashes.

LOL... why not take the current pennies in circulation, melt them down, and create 2 cent coins or 3, or 4? For every 2,3 or 4 pennies, make the new coin. Then sell the excess metal.

It's an idea, not the solution. ;)

LOL... why not take the current pennies in circulation, melt them down, ...I do not conveniently have the data, but would not be surprised to learn that is now in progress privately, if pennies are still mostly copper. (Are they?)

The price of copper has more than doubled. How many pennies are required to make a pound of copper? (Note answer is surely more than a pound of pennies as they are hard compared to pure copper so some other cheaper metal is alloyed in them.)

What is the price of a pound of copper? If it is not yet high enough to cover the melting and refining cost, possibly some industries that can use the current penny alloy are melting them down already as the cheapest available supply of metal. I think it is entirely legal to destroy small coin. - It was years ago when I put pennies on the railroad tracks. (Sold the elongated coin for a nickel after drilling a small hole in it. With two holes, you could make a "suit of armor" for kid's Halloween costume. Pull tap top coke cans did not exist back then.)

Pennies are mostly zinc with a copper coating. I have extracted the zinc from a penny before... well not all the zinc. I took a drill to it for some zinc. We could probably seperate the metals and then recombine them into a new coin that could last for a while (that is, be worth more than it costs to produce).

Pennies are mostly zinc with a copper coating. I have extracted the zinc from a penny before... well not all the zinc. I took a drill to it for some zinc. We could probably seperate the metals and then recombine them into a new coin that could last for a while (that is, be worth more than it costs to produce).I think the price of zink has also doubled in last year or so. Is a penny's intrinsic worth less than a penny now? (or is the metal in it worth more so even if it had zero production cost, the government loses money when making them?) Perhaps the penny is the only full "intrinsic value" coin the US has? If not which one comes closest?

Redefining the dollar's numeric value would have no economic impact.

If $1 is worth Y100 today, then the new dollar, which would be worth 10 old dollars (that's what redefining the cent as proposed would do), then $1 would be worth Y10,000, it would be a matter of simple multiplication.

Redefining the dollar's numeric value would have no economic impact....Except for normally* minor psychological effects, that is 100% correct and the point I have been making. That fact is well illustrated in many historical cases.

For example, during the two decades, roughly 1975 to 1995, Brazil had such bad inflation that several times (5 or 6?) new currency was created with this factor of 10 change in value. (They ran out of names for the new currencies and had to reuse some from many years earlier) Each time the new currency was created, you turned in 10 of the old for one of the new.

Lopping off a zero (or adding one) from the circulating currency has no noticeable effect on the economy. In Brazil's case it had more effect upon the streets, because the lowest value, old coins, now worth only 10% of their face value**, were not worth bending over to pick up. Consequently, they get embedded in the asphalt streets. It looked rather nice to see them shinning there. For some years now Brazil has had less inflation that the US and some street have been resurfaced so the asphalt street are becoming less attractive, but you can still find many with old coins showing in the streets.

People suggesting major consequences for changing the value of the cent by factor of 10, are ignorant of both economics and history.
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*The exception is when the psychological effect is self accelerating. I.e. it is possible that the change in investor and consumer confidence can cause a down turn to worsen and grow. For example, the US FED has been raising interest rates for about a year now, at least in part to keep foreigners willing to finance the US deficit. If both deficits and interest increases continue for some time, there will come a point when the increases of interest are not effective with the lending governments (China, Japan, oil exporters etc.) for psychological reasons. These governments with change the way they think of the increases. They will take the increase, not as a new opportunity for gain, but as an indication that US is in dire straights and the dollar is about to go under. I.e. thinking that gaining 10% interest in a year is not good deal if the dollar has dropped 20% in the last year and drop appears to be accelerating. The psychological or predictive state of foreign central banks is already beginning to change. Almost all are in the process of reducing their exposure to the dollar. the collapse is not far away when this "drift away" from the dollar becomes a run to get out of dollars. (Japan, because it depends on US for military protection, will probably be one of the last, and too late, to try to get out of dollars, and be left holding a relatively worthless bag of treasure notes/bonds.)
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**Not even that after a year, when they became worthless. If you wanted to and the day was hot to soften the asphalt, you could write you name or street number in the asphalt in front of your house with coins at no cost. I have a small bag full of relatively uncirculated old coins. I doubt if they will ever be worth taking to a old coin dealer as may people have such bags.