let the hoarding begin!

[FormerTeller]

http://money.cnn.com/2012/02/15/news/economy/pennies_nickels/index.htm?source=yahoo_hosted

 

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[sack0silver]

I bet people will start going through coin rolls just for their metal content. Don't they know there is nothing left...all the silver AND copper is gone. Shut down this forum and all others this instant!

 

[Rascal]

Saw that earlier today, made me wonder if perhaps 'hoarding' might not be such a bad idea after all. Hey, it worked out okay back in the "60's.

SoS, actually peak silver/copper isn't scheduled to end until next Tuesday. Until then keep looking. After that, may as well try stamp collecting.

Rascal

 

[maipenrai]

How about saving all that brain power, that is being wasted on finding a cheaper penny, and just stop making them!! First you take something as worthless as a penny, and then try to make it less worthless, how smart is that? Anyway, what about all the other countries in the world, that have coins that are worth less than a penny, are they losing money too? Forget about the nickle for now, just get rid of the penny and start saving money, let the hoarders melt their pennies or whatever, but to keep producing them is insane.

Thats my two pennies worth!

 

[SFBayArea]

This isn't anything new, the big question is when they'll do away with the melt ban. That's the only thing that counts.

 

[Xiao en]

Isnt coinage supposed to last 20-25 years??

How many times do we see a 1960 penny that is over 50 years old looking better than a 2008 penny?? IMO they have changed something within the coins as these new ones look like crap.

But YEA let the hoarders melt thier pennies!!

 

[AGCoinHunter]

How about saving all that brain power, that is being wasted on finding a cheaper penny, and just stop making them!! First you take something as worthless as a penny, and then try to make it less worthless, how smart is that? Anyway, what about all the other countries in the world, that have coins that are worth less than a penny, are they losing money too? Forget about the nickle for now, just get rid of the penny and start saving money, let the hoarders melt their pennies or whatever, but to keep producing them is insane.

Thats my two pennies worth!

The only reason cents are still produced is because of sales tax. Do away with the cent and now your sales tax rate gets rounded up to 10%.

 

[mts]

[The only reason cents are still produced is because of sales tax. Do away with the cent and now your sales tax rate gets rounded up to 10%.

That's not true. The math doesn't work out that way.

Anyway, this whole thing is another case of bending over dollars to pick up pennies. :P I know that $100Million dollars in savings seems like a lot. But it is actually a drop in the bucket. They will spend way too much money trying to change the composition in order to save a few million bucks. Don't we have bigger fish to fry? They have little chance for producing a penny for less than 1 cent anyway.

If anything, it is time to get rid of the penny and nickel and just move on. Let dimes be the smallest denomination. It has to happen eventually. Why not now? Plus, it gives all of us software programmers job security. Just think of all of that software that would need to be changed to support this.... mmmmmmm..... It's like the year 2000 all over again.

 

[mts]

And for the record, my hoarding began a while ago. But I've recently started really upping the volume. I'm predicting that by the end of the year, boxes of pennies and nickels will be hard to come by.

 

[AGCoinHunter]

That's not true. The math doesn't work out that way.

So how does the math work out? Assume the nickel also goes away. Show me how the math works...

 

[madwest]

That's not true. The math doesn't work out that way.

So how does the math work out? Assume the nickel also goes away. Show me how the math works...

Rounding happens already with sales tax. My sales tax is 5.5%. In IL, it is 6.25%. Either way, there is almost always a fractional cent that either gets rounded up or down. After a sufficient number of purchases, the rounding nets even. In other words, unless you are always spending the same amount of money at every transaction, you will benefit from the round-down as often as you get dinged for the round-up.

It's like how the gas pumps are set to $x.xx and 9/10ths of a cent. If everyone always bought gas in the same increments, the gas stations would "loose" $0.01 for every transaction or would "win" $0.01 for every transaction for a particular price per gallon. But since everyone buys a different amount of gas, it evens out to the actual 9/10 of a cent per gallon.

Bottom line is that rounding at each transaction depends on the state's sales tax rate and on the purchase amount. But overall, there is no net change to how much tax you pay or how much the state collects.

 

[MIhunter]

The US Gov't will not allow melting of pennies until the penny is no longer money.

Because the penny cost more than a penny to produce and distrubute even if the Mint could get planckets for free. The Gov't isn't going to allow anything that would increase demand for one cent coins, like melting hundreds of millions of copper one cent coins
The high cost of minting reflects the declining value of US Currency. But dropping the penny won't solve anything unless the cost of 5 cent coins is reduced. If you eliminated the penny there will be any increase demand for nickels. Changing the nickel means the vending machine operaters will have to spend a lot of money reprograming and refitting their machines to accept and give out the new 5 cent piece. Also, the companies that provide zinc, copper and nickel to the mint will have a beef with any change in there business of suppling metals to the Mint. The only reason there might be some movement is the sheer amount of money the Mint wil lose this year making zinc onr cent and cupronickel 5 cent coins.

My guess, we will be able to melt the copper penny by 2020

but nothing is for certain!!

 

[mts]

That's not true. The math doesn't work out that way.

So how does the math work out? Assume the nickel also goes away. Show me how the math works...

Rounding happens already with sales tax. My sales tax is 5.5%. In IL, it is 6.25%. Either way, there is almost always a fractional cent that either gets rounded up or down. After a sufficient number of purchases, the rounding nets even. In other words, unless you are always spending the same amount of money at every transaction, you will benefit from the round-down as often as you get dinged for the round-up.

It's like how the gas pumps are set to $x.xx and 9/10ths of a cent. If everyone always bought gas in the same increments, the gas stations would "loose" $0.01 for every transaction or would "win" $0.01 for every transaction for a particular price per gallon. But since everyone buys a different amount of gas, it evens out to the actual 9/10 of a cent per gallon.

Bottom line is that rounding at each transaction depends on the state's sales tax rate and on the purchase amount. But overall, there is no net change to how much tax you pay or how much the state collects.

Agreed. Here is an example. This example shows what happens when you buy something that costs $10.5 and is taxed at a rate of 6.75%.

Purchase price = $10.5
Tax Rate = 6.75%
Tax = $0.70875
Rounded Tax (to the nearest 10th of a cent) = $0.7
Final Price = $11.2
Effective Tax Rate = 0.7/10.5 = 6.666667%

Notice that the effective tax is not 10%. In fact, it has gone down from 6.75% to 6.666667%. This is an interesting phenomena. The tax on some items will go down while others will go up due to the way the rounding works. All in all it will balance out though.

 

[mts]

The US Gov't will not allow melting of pennies until the penny is no longer money.

Because the penny cost more than a penny to produce and distrubute even if the Mint could get planckets for free. The Gov't isn't going to allow anything that would increase demand for one cent coins, like melting hundreds of millions of copper one cent coins
The high cost of minting reflects the declining value of US Currency. But dropping the penny won't solve anything unless the cost of 5 cent coins is reduced. If you eliminated the penny there will be any increase demand for nickels. Changing the nickel means the vending machine operaters will have to spend a lot of money reprograming and refitting their machines to accept and give out the new 5 cent piece. Also, the companies that provide zinc, copper and nickel to the mint will have a beef with any change in there business of suppling metals to the Mint. The only reason there might be some movement is the sheer amount of money the Mint wil lose this year making zinc onr cent and cupronickel 5 cent coins.

My guess, we will be able to melt the copper penny by 2020

but nothing is for certain!!

That's why they should drop both the penny and the nickel. In effect, they need to drop a decimal point. It will also make the programming/calculations much easier as it is simpler to round to the nearest 10th than it is to round to the nearest 20th. The dime should be the lowest denomination that we support. It will have to happen sooner or later. Why not now?

The answer to the question above is that it would cost the government/public billions of dollars to rewrite their software in order to handle rounding to the nearest 10th. So we end up with the mess we are in today where they try to take the simpler approach of using alternative metals.

 

[Beans]

Here is what will happen to the penny and nickle. While searching look for "made in china" or the Ca Mint mark. Ca is the China Asia mint mark. I also think the Chinese will have another mint in India, coin will be made of brass and look for the paper lable "made in india" or the Ci (china india) mint mark. There will be another mint and it will use the WM mint mark.

 

[maipenrai]

Rounding off to the nearest 5 cents or even 10 cents is no problem, its done in many countries of the world, and no one complains. Sure it would cost money to change, but is that the only reason not to change? Im sure the US has more than enough programmers to figure out how to change cash registers and vending machines, its not rocket science. It cost much more money to handle the pennies, than it takes to make them, so Americans are losing out twice. Its just amazing, that a country that prides itself on the market economy, can just keep making a product that cost more to produce, than its worth. How many other things are done the same way? Its not just the government that is doing it, but even the average person doesnt seem to think about cost, just do it like before.

Is there anyone that really likes getting a hand full of pennies after a day of shopping? I see a lot of people just throwing them into the parking lot, thats really brilliant! They could at least take them to the tot lots to throw them away, the we would have something to find, and maybe a few tots could find something too. (That is if we dont beat them to the punch!)

 

[SFBayArea]

Here is what will happen to the penny and nickle. While searching look for "made in china" or the Ca Mint mark. Ca is the China Asia mint mark. I also think the Chinese will have another mint in India, coin will be made of brass and look for the paper lable "made in india" or the Ci (china india) mint mark. There will be another mint and it will use the WM mint mark.

No, no one wants to ship $20 K worth of pennies overseas to here when the boat ride probably costs $5 K inself. Doesn't make sense. If the Canadians can get away with minting pennies for less than a penny, then we should follow them. Canadian money is on parity with ours so results should be similar.

 

[Th3Offspring]

How about saving all that brain power, that is being wasted on finding a cheaper penny, and just stop making them!! First you take something as worthless as a penny, and then try to make it less worthless, how smart is that? Anyway, what about all the other countries in the world, that have coins that are worth less than a penny, are they losing money too? Forget about the nickle for now, just get rid of the penny and start saving money, let the hoarders melt their pennies or whatever, but to keep producing them is insane.

Thats my two pennies worth!

Just a thought, what happens to gas prices when you get rid of the penny?

 

[maipenrai]

Nothing happens to gas prices or any other prices. The price is figured just the same as it is now, then the final price is rounded to the nearest 5 cents, up or down, and it all averages out. Dont you know that the price of gas has been rounded up or down all the time? Or have you ever paid 9/10 of one cent?

 

[SFBayArea]

Nothing happens to gas prices or any other prices. The price is figured just the same as it is now, then the final price is rounded to the nearest 5 cents, up or down, and it all averages out. Dont you know that the price of gas has been rounded up or down all the time? Or have you ever paid 9/10 of one cent?

They better not get rid of the penny. If you trade stocks, you want the smallest possible denomination possible because it makes it easier to get in and out of positions.