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Ardent Listener | 07-18-2006 10:13 AM
Kill-the-penny bill on its way. Kill-the-penny bill on its way Citing spiraling zinc costs, Rep. Jim Kolbe on Tuesday will continue his quest to eliminate the 1-cent piece. By Christian Zappone, CNNMoney.com staff writer July 18 2006: 9:36 AM EDT <!--startclickprintexclude--> <!-- CONTENT --><!--endclickprintexclude--> NEW YORK (CNNMoney.com) -- 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. Kolbe says his bill will address both the rising production costs as well as other provisions for modernizing the currency system. <!--startclickprintexclude--><TABLE style="PADDING-LEFT: 10px" cellSpacing=0 cellPadding=0 width=220 align=right border=0><TBODY><TR><TD class=IErow><TABLE cellSpacing=0 cellPadding=0 width=220 border=0><TBODY><TR><TD align=middle>http://i.cnn.net/money/2006/07/18/ne...ep_arizona.jpg</TD></TR><TR><TD vAlign=top align=left>Representative Jim Kolbe (R-Arizona)</TD></TR></TBODY></TABLE></TD></TR><TR><TD class=IErow><!-- Poll begins --><FORM action=http://polls.money.cnn.com/poll method=post><INPUT type=hidden value=25329 name=poll_id> Quick Vote <TABLE cellSpacing=1 cellPadding=0 width="100%" border=0><TBODY><TR><TD colSpan=2><!-- Question 1 -->Should the penny be eliminated? <!-- Answer 1 --><INPUT type=radio value=1 name=question_1> Yes <!-- /end Answer 1 --><!-- Answer 2 --><INPUT type=radio value=2 name=question_1> No <!-- /end Answer 2 --></TD></TR><!-- /end Question 1 --><TR><TD class=pollButtonRow colSpan=2><INPUT type=image hspace=0 src="http://i.cnn.net/money/.element/img/1.0/buttons/vote.gif" align=absMiddle vspace=3 value=VOTE border=0> or View results </TD></TR></TBODY></TABLE> </FORM><!-- Poll ends --></TD></TR></TBODY></TABLE><!--endclickprintexclude-->Kolbe was the sponsor of the Legal Tender Modernization Act of 2001, which failed to gain much support in Congress. 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. The world market in zinc has been squeezed by cyclical price rises, increased demand from industrial nations and a production bottleneck. 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. Kolbe's 2001 legislation proposed that cash transactions ending in 1, 2, 6, or 7 cents should be rounded down to the nearest 5 cents, while transactions ending in 3, 4, 8, or 9 cents would round up. Credit and debit card transactions could still be valued to the nearest cent. --------------------------------- Related: The fight against the penny http://i.cnn.net/money/images/bug.gif

cb&julie | 07-18-2006 10:17 AM
Re: Kill-the-penny bill on its way. personally, I don't want the penny to go, but if this de-legitimizes the current regime then bring it on.

Ardent Listener | 07-18-2006 10:27 AM
Re: Kill-the-penny bill on its way. "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." This doen't make sense. Going over to nickels made out of 75% copper and 25% nickel would be more expensive than zinc cents. A zinc cent cost about 85% of its face value. A nickel cost about 134% of its face value. So if the mint has to make more nickels to replace zinc pennies where would the savings be? Face it, the nickel will be soon made out of steel or it too would be done away with.

cb&julie | 07-18-2006 10:30 AM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by Ardent Listener (Post 302723) "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." This doen't make sense. Going over to nickels made out of 75% copper and 25% nickel would be more expensive than zinc cents. A zinc cent cost about 95% of its face value. A nickel cost about 134% of its face value. So if the mint has to make more nickels to replace zinc pennies where would the savings be? Face it, the nickel will be soon made out of steel or it too would be done away with.
I suspect that they won't kill any of the coins for the reasons I stated above -- it hurts their link to a traditional, older America that they have virtually nothing in common with. The "compromise" solution that the politicians work out will be to make the coins from steel, aluminum, or plastic.

Ardent Listener | 07-18-2006 10:35 AM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by cb&julie (Post 302724) I suspect that they won't kill any of the coins for the reasons I stated above -- it hurts their link to a traditional, older America that they have virtually nothing in common with. The "compromise" solution that the politicians work out will be to make the coins from steel, aluminum, or plastic.
I agree, but it proves that this goverment will not allow a money with value of its own equal too or near its face value.

Ardent Listener | 07-18-2006 11:07 AM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by Ardent Listener (Post 302723) This doen't make sense. Going over to nickels made out of 75% copper and 25% nickel would be more expensive than zinc cents. A zinc cent cost about 95% of its face value. A nickel cost about 134% of its face value. So if the mint has to make more nickels to replace zinc pennies where would the savings be?
Allow me to correct myself. What I quoted above is the cost of the base metals for the coins. Minting them requires an additional expense. However, IMO such an expense is legitimate for the goverment to endure.

gpond | 07-18-2006 11:14 AM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by Ardent Listener (Post 302712) Kolbe's 2001 legislation proposed that cash transactions ending in 1, 2, 6, or 7 cents should be rounded down to the nearest 5 cents, while transactions ending in 3, 4, 8, or 9 cents would round up. Credit and debit card transactions could still be valued to the nearest cent.
As I was reading this article I was joking (to myself) that they might make pennies out of plastic, especially cost effective if outsourced to China or India... However, reading the above I see it is no joke. Pennies would only be available in plastic (credit cards). Weird. Pennies would be solely a digital denomination, as in bits and bytes. (Very possibly the first step to making all currency totally digital...)

Ardent Listener | 07-18-2006 11:21 AM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by gpond (Post 302779) As I was reading this article I was joking (to myself) that they might make pennies out of plastic, especially cost effective if outsourced to China or India... However, reading the above I see it is no joke. Pennies would only be available in plastic (credit cards). Weird. Pennies would be solely a digital denomination, as in bits and bytes. (Very possibly the first step to making all currency totally digital...)
Yes, you know the old saying, 'Take care of the pennies and the dollars will take care of themselves.'

REV127 | 07-18-2006 11:31 AM
Re: Kill-the-penny bill on its way. Well, you guys sold me on the idea of hoarding copper pennies and I initially thought it was the stupidest thing I'd ever heard. Then I heard about what's going on in the Philipines.

Ardent Listener | 07-18-2006 11:33 AM
Re: Kill-the-penny bill on its way. Stupid is as stupid does sir.:D

fasTTcar | 07-18-2006 11:57 AM
Re: Kill-the-penny bill on its way. What ever they lose in making a penny, they make up for with making a $20. Plastic currency is already in circulation in some countries and will continue to grow. However, the move will continue towards the other kind of plastic, digital debt.

blueice | 07-18-2006 12:01 PM
Re: Kill-the-penny bill on its way. All the penny does is to put holes in pockets and slow down check out time.

cb&julie | 07-18-2006 12:05 PM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by blueice (Post 302844) All the penny does is to put holes in pockets and slow down check out time.
Good! I'd rather not be treated like cattle going through a stall.

The Great Ag | 07-18-2006 12:47 PM
Re: Kill-the-penny bill on its way. The penny will not be removed from circulation. Unless an act is repealed. In 2005 President Bush signed an act to redo the Lincoln Cent to commemorate Lincoln's 200th birthday. The mint could change the metal. I had not thought of brown plastic. What a cheap rip, if that's the way we go. Hey, we could all play tiddlee-winks with the plastic Lincolns. Who's up for a game.:applause_ The Great Ag

silverJeep | 07-18-2006 12:47 PM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by REV127 (Post 302809) Well, you guys sold me on the idea of hoarding copper pennies and I initially thought it was the stupidest thing I'd ever heard. Then I heard about what's going on in the Philipines.
OK, I guess I'm out of the loop... what's going on in the Phillipines??

californiajeff | 07-18-2006 01:47 PM
Re: Kill-the-penny bill on its way. I don't know what he is talking about but in the Phillipines the smallest denomination is the 5 peso. Now in case you don't know, around 50 pesos equals 1 U.S. dollar. Now back to the 5 peso. It is smaller than our penny. I think it is like half the size with a hole in it. The U.S. could do that to save on costs. Of course, if they are willing to lose a trillion on the Iraq war, what's a few hundred million being lost on pennies?

The Argent Dragon | 07-18-2006 02:04 PM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by Ardent Listener (Post 302712) NEW YORK (CNNMoney.com) -- 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.
This is 'crap' - Do you think a retailer that has an item priced 0.91 cents is going to round down to 0.90 cents ? NO - it'll be rounded up to 0.95 cents securing a tidy little 4-cent profit. Remember Superman III where Richard Pryor had all the company's 1/2 cents added to his paycheck ? ..........Then he bought a Ferrari ? Well, think of that times a billion or more. Corporate America gets richer. AND - from coinflation (1.4 cents per penny my a$$) : <TABLE cellSpacing=0 cellPadding=4 width="100%" bgColor=#ffffff border=0><TBODY><TR><TD></TD><TD>1982-2006 Cent (Zinc) *</TD><TD>$0.01</TD><TD>$0.0085712</TD><TD>85.7100%</TD></TR></TBODY></TABLE> :puke:

Ardent Listener | 07-18-2006 02:06 PM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by silverJeep (Post 302897) OK, I guess I'm out of the loop... what's going on in the Phillipines??
www.coinflation.com had a link to a story Coin shortage in the Philippines Philstar.com, but when I try to go there it can no longer be found.

SilverHare | 07-18-2006 02:15 PM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by silverJeep (Post 302897) OK, I guess I'm out of the loop... what's going on in the Phillipines??
The copper in their smallest coin is worth 150x the face value, so smugglers are taking them out by the tens of thousands.

Metalophile | 07-18-2006 04:44 PM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by The Argent Dragon (Post 302987) This is 'crap' - Do you think a retailer that has an item priced 0.91 cents is going to round down to 0.90 cents ? NO - it'll be rounded up to 0.95 cents securing a tidy little 4-cent profit. Remember Superman III where Richard Pryor had all the company's 1/2 cents added to his paycheck ? ..........Then he bought a Ferrari ? Well, think of that times a billion or more. Corporate America gets richer. AND - from coinflation (1.4 cents per penny my a$$) : <TABLE cellSpacing=0 cellPadding=4 width="100%" bgColor=#ffffff border=0><TBODY><TR><TD></TD><TD>1982-2006 Cent (Zinc) *</TD><TD>$0.01</TD><TD>$0.0085712</TD><TD>85.7100%</TD></TR></TBODY></TABLE> :puke:
The 1.4 cents per penny is the production cost, not the melt value. The Mint is pumping them out at a rate of about 9 billion per year. I think it's silly to produce them at a loss, then lug them all around the country, just to end up in countless penny jars gathering dust and corrosion. We already round to the nearest cent. What's 8% sales tax on 91 cents? 7.28 cents! The proposal going through congress is to round down to the nearest nickel when the price ends in 1,2,6, and 7, and to round up on 3,4,8, and 9. That seems fair to me - you win half of the time and you lose half of the time. Many merchants already round *down* to the nearest nickel on *all* transactions. If they round up, you're free to vote with your feet and buy elsewhere. Also, we're not talking rounding on each item. If you go to the grocery store and buy 30 items, the rounding would occur at the final tally. And don't say that retailers will price their items so they're always rounded up. Most transactions are probably of multiple items, not single items, so that scheme would not work. Also, it seems like each city, town, county, and state has their own sales tax levy, so if an item is priced to round up in one location, it's probably priced to round down the next county over. Actually the nickel melt value is above 6 cents right now. I think we should either stop production of nickels and round to the nearest dime or switch to making half dimes. I hate the thought of using steel or plastic for making coins.

GREENSILVERHORN | 07-18-2006 04:53 PM
Re: Kill-the-penny bill on its way. Lets just move upto 50cent pieces and stay ahead of the game.

Wyldwil | 07-18-2006 05:20 PM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by Ardent Listener (Post 302723) "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." This doen't make sense. Going over to nickels made out of 75% copper and 25% nickel would be more expensive than zinc cents. A zinc cent cost about 85% of its face value. A nickel cost about 134% of its face value. So if the mint has to make more nickels to replace zinc pennies where would the savings be? Face it, the nickel will be soon made out of steel or it too would be done away with.
Why don't they just make them out of plastic with some anti-counterfit chip/hologram thingee imbedded in it. What difference does it make. (to think...B4 I got here I actually was starting to think that a totally paper/coin-less currency system would be a good change.)

Ardent Listener | 07-18-2006 06:31 PM
Re: Kill-the-penny bill on its way. Quote:
Originally Posted by Wyldwil (Post 303240) Why don't they just make them out of plastic with some anti-counterfit chip/hologram thingee imbedded in it. What difference does it make. (to think...B4 I got here I actually was starting to think that a totally paper/coin-less currency system would be a good change.)
The only difference would be that they would then be just as worthless intrinsically as the FRNs. I too was once blind, but now I too see.

grasshopper | 07-18-2006 10:07 PM
Re: Kill-the-penny bill on its way. I think reducing the size as californiajeff suggested should be considered before the penny is phased out for good. Here in Thailand, the smallest coin is the 25 satang. Worth about .6 cents and MUCH smaller than a penny, though not terribly useful.

Tn...Andy | 07-18-2006 10:16 PM
Re: Kill-the-penny bill on its way. Our local paper ran an article on the penny and the plans to do away with it. They asked for letters to the editor in response, here was mine: On the demise of the penny: All empires eventually destroy their currency. The Romans did it, and Great Britain of the last century did it, by reducing the amount of real metal in their coin money. The “Pound Sterling” used to be a standard, now it is simply another piece of paper. The demise of the penny is simply further evidence that the US is headed in the same direction as previous empires. The US started down this road in the 30’s when the public allowed the politicians to take the ‘right’ to own gold away from them. For the first 150 years of this country, gold was $20/ounce and there was no inflation. A US president in the 30’s was more concerned about the banksters and politicians, and illegally ordered all the gold held by citizens turned…..for a piece of paper that said “$20” but was not. Shortly there after, that same president declared gold now worth $35, which it remained until 1971. Assuming your grandpa turned in his gold like a good citizen, he got beaten out of 75% of it’s purchasing power in short order. Along came the 60’s, and politicians wanted massive amounts of ‘money’ for a war and social programs. It was either raise taxes or inflate the money supply to get it. Guess which one they chose. That is why the silver dime, and quarter disappeared in 1965 ( and the half cut to 40% silver )…..they got “too expensive” to in terms of a paper ‘dollar’ that was being inflated like mad. But like empires before, they didn’t simply do away with those coins, they came out with nickel clad copper core coins we have today to fool the public somewhat, because to simply stop making them would have made the scheme too obvious. They did the same thing to the copper penny in 1982. Pennies from that date onward are 97.5% zinc with a copper coating to “fool” ya, and even THAT is no longer possible due to the alleged rise in the price of metals. It is only ‘rising’ in terms of a paper currency that is being deliberately inflated away. Not too far down the road the Federal Reserve Note ‘dollar’ will join the ruins of every paper currency that has ever been tried in the world because politicians cannot resist the easy path of something for nothing. So when you see the penny gone, to be followed by the disappearing nickel, understand why it is happening and don’t believe the foolish lies out of Washington.

Ardent Listener | 07-18-2006 10:21 PM
Re: Kill-the-penny bill on its way. Well said Andy, well said.

RiverRat | 07-18-2006 11:15 PM
Re: Kill-the-penny bill on its way. :rock: State and local taxes denominated in pennies will not disappear overnight. If Walmart rounded every cash sale to the nearest $.05 the customers would not be happy. The debit/cc customers would be charged actual tax.........the cash customers would be left holding the bag. Walmart itself would revolt having to do the accounting to make it balance.......which would be impossible.It would never balance. Bad idea IMHO..........but we are bacteria..........what do we know ? Let em have it Andy...........good for you..........:D

Au_man | 07-19-2006 08:58 PM
Re: Kill-the-penny bill on its way. I can see where gas stations would lose out on two cents in just about every transaction, at least until they change the way the pumps work or get some special rule passed to help them out. People will just run the pump until the amount on meter ends with a 2 or 7, and get the round down.

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