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Currency Arbitrage – Update May 13, 2010

Posted by federalist in Finance, Uncategorized.
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Updating a topic of longstanding bemusement, the WSJ reports:

It costs the federal government up to nine cents to mint a nickel and almost two cents to make a penny.

Coinflation.com tracks the intrinsic (“melt”) value of metal coins.

A letter several years ago noted:

When the half-cent was abolished in 1857 it was worth more than eight cents in today’s currency. People then had no problem living in the following decades, during which the smallest unit of currency was worth more than our dime today. In fact, they persevered through that transition without the luxury of the many cashless means of electronic transaction we enjoy today (which, even after penny abolition, can preserve prices to the cent).

It’s silly that the U.S. continues to mint pennies and nickels. Just as silly is the fact that American businesses and consumers continue to carry them around for regular use in cash commerce.

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Comments»

1. federalist - February 22, 2012

More voices against minting pennies: http://www.retirethepenny.org and the latest from Robert Whaples.


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