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Wednesday, May 07, 2008

Change has become expensive

Everything old is new again. . .

Some of you may recall the steel pennies which were minted during World War II due to shortages of precious metals caused by wartime production. I have a few in my coin collection and, if some in Congress get their way, you may have a few in your pocket soon. Perhaps even some nickels as well. Although today's military demands haven't caused any shortages, copper and nickel prices have tripled since 2003, and the price of zinc has quadrupled.

Pennies, consisting of 97.5% zinc and 2.5% copper, cost 1.26 cents to make as of yesterday. And nickels - 75% copper and the rest nickel - cost 7.7 cents, based on current commodity prices. That's down from late last year, when even higher metal prices drove the penny's cost to a whopping 1.67 cents. The cost of making a nickel then was nearly a dime. Striking the two coins costs well above their face value and set the U.S.Treasury and taxpayers back about $100 million last year alone. A lousy deal, lawmakers concluded as the House moved toward a vote this week that directs the Treasury secretary to "prescribe" - suggest - a new, more economical composition of the nickel and the penny.

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Blogger Vic DeMize said...

Is it truly necessary to continue minting new coins every year? Are there really not enough in circulation to skip a year?

title="comment permalink">May 08, 2008 12:02 PM  
Blogger John Good said...

Nah. . .all of us "penny jar" owners are causing a vast shortage. . .;)

title="comment permalink">May 08, 2008 7:24 PM  

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