Dump the penny?

Dump the penny?

Nat
Joined: January 1st, 1970, 12:00 am

June 24th, 2006, 9:20 pm #1

For the first time in history it now cost more money to make a penny (1.23¢) then the penny is worth (1¢) and some say it's time to abolish penny and round prices off to the nearest nickel. Any comments?
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peter
peter

June 25th, 2006, 4:40 am #2

Might play hell with local and state taxes....they get far too much as it is without giving them the rounded up figure.
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Nat
Joined: January 1st, 1970, 12:00 am

June 25th, 2006, 2:14 pm #3

Well this is the augment penny supporters use, but if prices were done fairly they should round down as often as up. Furthermore penny opponents say that just the extra time it takes for clerks to deal with pennys itself cost the store several pennys- which would lower prices.

I think the real answer to this is electronic money. I've haven't carried more than a few dollars in cash for years because I pay everything I can with a credit card. I find this safer, more convenient, and it's great to have a printed record of where my money goes. And since I always pay my bill off monthly I never pay interest charges. It's like a free accounting service for me.

I'm still miffed over an incident several months ago- while working on a home repair project I needed a small hardware item so I rushed to a local store. When I got there I realized my credit card was in my other pants so I pull a $20 bill from some 'emergency' money I keep in the car and went in and bought the item. I should have been checking my change rather than gabbing with the clerk because later when I empied my pockets to wash the pants I realized I had only $7 left from that $3 purchase.

It appears the cashier had counted my $20 bill as a $10 but I had no way to prove this because I had nothing to prove I had giving him a $20 rather than a $10 so I caulked up my $10 lost to bad luck.

This kind of error (or fraud) is eliminated with electronic money because everything is documented on paper and you never have to worry about being short of money or getting the incorrect change. What needs to be done is to make electronic paying so fast and easy it can be used for everything- everywhere- even vending machines. This would eliminate the penny issue and save everyone a lot of hassle.
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peter
peter

June 25th, 2006, 4:44 pm #4

I don't necessarily support the penny but I do value having control over my money. To date the bank I have been with for the 6 years has earned several hundred dollars off of the electronic way of banking be it usage fees of fees for their clerical errors, although they have rectified the issue, they had control and access to my funds for their gain in the interim.
I now only use them for receiving my VA check and as a place to cash business checks. I do everything on a cash basis now. I keep and check all my own receipts for my records and I no longer have to lose my hard earned money.

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Nat
Joined: January 1st, 1970, 12:00 am

June 25th, 2006, 5:46 pm #5

Well maybe I've been lucky but I've never had any significant problems with my bank or credit card company. In fact, I usually use Discover-Card which actually pays me back a certain amount every 3 months just for using their card. I've never paid them or the bank for anything beyond the stuff I have purchased. They make a lot of money off cards from people who carry finance charges but not from me.

As for receipts- all they tell you is what things are suppose to be- not what they actually were. In the case of my hardware store event- I had the receipt- and according to it I gave the guy $10 because that's what he keyed into the cash register. He could have key in $10 even if it was really a $20 bill and I have no way now to prove it was a $20 bill.
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Bob
Bob

June 25th, 2006, 6:08 pm #6

As much as possible, I try to pay for things with cash. That way I am less likely to overspend and don't have a debt to pay later. Chances are good that if I really need the thing, I can buy it with cash. A charge card makes it too easy for me to make impulse purchases that I might later realize were frivilous and/or not really what I wanted or needed.

As for the penny question, it wouldn't bother me if they did away with it. What's a penny or two anyway? Many people will throw pennies away when they find them, so its really not a significant denomination now. With the runaway inflation that looms ahead, we might feel the same about the nickel, dime and quarter in the near future. The way the Federal Reserve is printing money these days (and now they don't even have to tell the public how much they are printing), it might not be so long before the dollar looks like insignificant currency.
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John Bayko
John Bayko

June 25th, 2006, 7:38 pm #7

For the first time in history it now cost more money to make a penny (1.23¢) then the penny is worth (1¢) and some say it's time to abolish penny and round prices off to the nearest nickel. Any comments?
I took a tour of the Royal Canadian Mint last year. The Canadian penny cost more than a cent to make years ago, but they were able to formulate a new iron-based copper plated alloy that costs only a fraction of the original copper.

The RCM mints currency for a couple dozen other countries because it has one of the most efficient and highest quality plants in the world. I'm sure the U.S mint could use a similar alloy and get the price down like Canada did.

Then again, if you look at other countries with lower valued currencies, smaller denominations have disappeared a long time ago. The French Franc was about 1/7 the U.S dollar, and the smallest denomination was about 10 centiémes, I believe (coins up to a Franc were normal thickness, coins above a Franc are double thickness, which I found convenient). Italy's Lira was about 1/2000 of a U.S dollar (they've both switched to Euros - they're something like 1 Euro per 1.20 U.S dollars). And I seem to recall that until recently, Turkey's Lira was about 1 millionth a U.S dollar - they recently dropped six zeros off and revalued the whole currency.

I think the smallest denomination should be about 1/10 of the smallest you can practically buy something with. In the U.S, I think that would be a phone call for 25 cents (or maybe 50 cents by now), so a nickle is reasonable. Or can you get a gum ball for 25 cents still?
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SHADOW
SHADOW

June 25th, 2006, 8:20 pm #8

You can still get a gum ball at the mall for $0.25.
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Nat
Joined: January 1st, 1970, 12:00 am

June 25th, 2006, 8:22 pm #9

As much as possible, I try to pay for things with cash. That way I am less likely to overspend and don't have a debt to pay later. Chances are good that if I really need the thing, I can buy it with cash. A charge card makes it too easy for me to make impulse purchases that I might later realize were frivilous and/or not really what I wanted or needed.

As for the penny question, it wouldn't bother me if they did away with it. What's a penny or two anyway? Many people will throw pennies away when they find them, so its really not a significant denomination now. With the runaway inflation that looms ahead, we might feel the same about the nickel, dime and quarter in the near future. The way the Federal Reserve is printing money these days (and now they don't even have to tell the public how much they are printing), it might not be so long before the dollar looks like insignificant currency.
Well I guess its my tightwad persona but I pretty much manage to keep my spending in check. In fact if people judge me by my old clothes and beat-up car they would think I was at poverty's doorstep. It's just my natural affinity for keeping old familiar things and being frugal.

But I agree with you on the inflation, last fall I moved nearly all my investments into gold and commodities because I expect the inflation cow will be coming home big-time soon. In fact, if China and our other creditors decide to pull the plug on our runaway deficit the results could be disastrous.

And this is a good reason NOT to be in cash!
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Nat
Joined: January 1st, 1970, 12:00 am

June 25th, 2006, 8:31 pm #10

I took a tour of the Royal Canadian Mint last year. The Canadian penny cost more than a cent to make years ago, but they were able to formulate a new iron-based copper plated alloy that costs only a fraction of the original copper.

The RCM mints currency for a couple dozen other countries because it has one of the most efficient and highest quality plants in the world. I'm sure the U.S mint could use a similar alloy and get the price down like Canada did.

Then again, if you look at other countries with lower valued currencies, smaller denominations have disappeared a long time ago. The French Franc was about 1/7 the U.S dollar, and the smallest denomination was about 10 centiémes, I believe (coins up to a Franc were normal thickness, coins above a Franc are double thickness, which I found convenient). Italy's Lira was about 1/2000 of a U.S dollar (they've both switched to Euros - they're something like 1 Euro per 1.20 U.S dollars). And I seem to recall that until recently, Turkey's Lira was about 1 millionth a U.S dollar - they recently dropped six zeros off and revalued the whole currency.

I think the smallest denomination should be about 1/10 of the smallest you can practically buy something with. In the U.S, I think that would be a phone call for 25 cents (or maybe 50 cents by now), so a nickle is reasonable. Or can you get a gum ball for 25 cents still?
They've already taken most of the copper out of the US penny. Otherwise people would be hauling them all to the smelter because the price of copper has gone through the roof lately. Some radio stations have had their copper ground radials ripped right out of the ground by copper thieves.
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