The penny costs more then a cent to make

Discussion in 'Business & Economics' started by trevor borocz johnson, Aug 26, 2016.

  1. trevor borocz johnson Registered Senior Member

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    given the exchange and life of the penny can anyone tell me what effect this has on economy?
     
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  3. sculptor Valued Senior Member

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    The mint loses $ on pennies and nickels, but makes $ on all other coins thereby turning a profit of almost $300 million annually.
     
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  5. gmilam Valued Senior Member

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    Seeing as how they last for decades, I wouldn't think it would have any impact on the economy.
     
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  7. joepistole Deacon Blues Valued Senior Member

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    Nothing.... nothing happens to the economy. If the metal content is worth more than the stated value of the coin, then it becomes a problem for the mint. Because people will smelter the coins and sell the metal, at which point the mint will change the metal content as it has done in the past.
     
    Last edited: Aug 26, 2016
  8. DaveC426913 Valued Senior Member

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    Here in the Great White North we have eliminated the penny.

    Payments still do come to penny amounts but, when cash is involved, the amount is rounded to the nearest nickel.

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  9. Seattle Valued Senior Member

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    The penny may take more than a penny to make but it's largely zinc with a copper coating so it's probably not worth more than a penny if you have to take it apart.
     
  10. joepistole Deacon Blues Valued Senior Member

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    I think owing to technology coins have become obsolete. I collect coins. I like coins. But I almost never use hard currency in commerce.

    Below is a tool to calculate the melt value of coins. http://www.coinflation.com/coins/basemetal_calc.php

    The melt value is far less than the nominal value. So there is no problem for the mint.
     
    Last edited: Aug 27, 2016
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  11. sculptor Valued Senior Member

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    the dollar sign does strange things to text
     
  12. trevor borocz johnson Registered Senior Member

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    It seems like false idol worship of gold. Somehow the center of the economy will make up for something that comes out zero in value. This happens all the time, example throwing away food.
     
  13. exchemist Valued Senior Member

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    I remember when this happened in Italy in the 1970s. All the lowest denomination coins disappeared and you were solemnly given telephone tokens called "gettone" (discs made from some cheap metal with a slot across them), instead - all adding to the sense of barely suppressed chaos that characterised visits to Italy at that time.
     
  14. joepistole Deacon Blues Valued Senior Member

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    The US has done it periodically over the years. The US one cent coin is now copper plated. The first US once cent coins were pure copper. Content has varied over the years. For a brief period during WWII the US produced steel one cent coins owing to metal demands of the war.
     

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