Money Trivia

Singh_5

It costs $6.98 to produce a nickel.
A nickel is 75% copper and is worth more as scrap.

A post 1982 penny does not have much copper but cost $1.12 to make.

BTW - The fine for getting caught melting down coins for scrap is $ 10,000.

Singh_5

Another thought.

If it costs $6.98 to make a nickel, how much did it cost to make that $6.98 ?

Hmm.

No wonder, the gov secretly wants everyone to use debit cards.

DanHolohan

Numbers seem

a bit off, but it's still fun.

Coin production costs

Brad White

You need to move the decimal point to the left, Devan

by two places. The cost of nickels and pennies is marginally above their face value, not by factors of over a hundred.

Pennies in fact are now made of zinc with a copper wash so finally are below face value.

A $10,000 fine? Better than hanging, the penalty for "clipping" the edges of coins in Olde England. The reeding on the edges of coins was used to help thrwart that by the way.

Still, fun stuff!

DanHolohan

Hanging

I'm reading a book about heating, written in 1850. The author explains that it was once a capital offense to burn coal in England, and that one man was hanged for doing so.

Singh_5

Nobody knows

Same source different numbers.

http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm

I was off by a penny.. err .. I mean $1.12

[Deleted User]

I guess...

that they've been envoronmentally concerned for quite some time eh...

Here, we wouldn't hang them, we'd reward them with some kind of federal subsidy...

ME

Singh_5

More numbers

"Notice that the Mint produced $78,612,000 worth of pennies at a cost of $135,998,760, thereby wasting $57,386,760 of taxpayer money through November 2006. The all-in cost of coining pennies is even higher, after you include the wasted time and money that merchants and banks spend sorting and counting the damn things." source ( Agora Financial Times )

That's $ 1.73 folks.
Fun stuff.

Steve Ebels_3

pennies are useful

I had a local supply house refuse to acknowledge that I had returned a part for warranty a few years ago. They kept hounding me for the money, $82 and change, I kept telling them who I had left the part with and faxing them the copy of the paperwork, they turned the bill over to a collection agency. Rather than waste my time fighting that, I UPS'd them payment in full.......8,200+ pennies, without wrappers. I never heard from them again and I haven't been back. Took me about a week to collect that many from the local banks but a couple of the tellers got quite a kick out of what I was doing.

Perry_3

Ahhh..... check your math...

If you look, that is $1.73 for a dollar's worth of pennies....

Now the last time I looked a dollar had 100 pennies; thus, that works out to 1.73 cents per penny. as the article states, currently 1.12 cents of that is base metal. The rest would be production cost.

All manufactures occasionally have items that cost more to produce than they sell for. The overall production line of the mint makes money. That is not wasted taxpayer money.

Perry

Singh_5

Math

Divide the $78,612,000 million bucks of pennies into the $135,998,760 million bucks to produce = $1.73.

Perry , I'm not sure what you mean the overall production line of the mint makes money.
If I understand, The fuction of the mint is to produce, not profit.
If I remember the treasury dept. calls for more money or less to be put into circulation, and destroy old currency, we can't profit from this action or else the value of the dollar would decrease.
The amount in circulation has to be backed by our current stockpiles of gold and silver, hard currency. So even when it does cost more to make money than it's actually worth, it's still holds it's value. Thereby wasting taxpayers money. This is why the U.S dollar is the base measurement of for all other countries currency value. Which is way too complex for me to explain or understand how that relationship works. All I know is the US $1 has more purchasing power in most countries, The Euro is catching up, and will probably be the sought after currency within three decades.

We (the U.S) "make our money" (profit) through interest earnings , bonds, taxes, loans , (and the occassional sell of weapons to foreign countries) : )

Timco

I had a legal dispute with a former landlord years ago and after living there for months without paying rent, it was found that I owed him $600, or one month's rent. I paid it in $1 dollar bills. Took a while to get 600 of them, and they all went into a bag. The atty looked in the bag and asked if he needed to count it, and I said I had time! They just took it. I said I wanted to make the settlement look like more than it really was....looked like a million dollars!

T

Perry_3

Singh

Singh:

Please read my post above again. By your numbers the cost of a penny is 1.73 cents (remember one dollar has 100 pennies).

I also think you misunderstand the many ways the goverment makes money and I doubt that you listed even half of the ways.

In this case it is very simple - please go to Dan Holohan's post of Jan 13 and click on the link he provided. Minting of coinage is overall profitable for the government, and it matters little that they are loosing money on pennies and nickles this year.

I would also point out that the amount of US currancy in circulation has no connection to stockpiles of gold, silver, or anything else. The US, and most other countries abandoned the gold standard decades ago. Modern currency is a concept - an idea - and it is valued based on what can be best described as "fuzzy" logic. This applies to not only the US dollar, but the Euro, and most other currencies in the world. Their value floats depending on a lot of things... but not dependent on the holding of any "hard" reserves.

Perry

Singh_5

Perry

Very interesting. I understand, the point you are making.
Quick points. Dan's link is 7 month's old. The newer article I referred to
has the newer estimated costs to produce those coins.
I don't mis-understand the ways the US makes money, of course there are more ways than I listed, however my point I was trying to make is the US can't make money by making money. To produce new currency , without taking the same amount out, or using that currency without buying something of equal value, would eventually make the dollar worthless.
If the treasury dept makes a call for a billion dollars worth of currency to be minted, the US mint produces that currency at a raw cost of let's say 900 million
the treasury pays the mint for the currency at full face value one billion the difference - 100 million is transferred back to the treasury, they call this "seigniorage". My opinion, that's not a profit. According to Dan's link the increased cost in metals would reduce this "profit" by an estimated 45 mil.
The updated costs , would reduce it further. Yes, other coins and paper currency value still above production costs. So overall mint cost are lower than the money they make.
Why the quote from previous post says it's a waste of taxpayers money is, because we really don't need to produce those coins ( pennies and nickels)
But to stop production would prove the devaluation of the dollar.
You are right Perry, the dollar not backed gold since the mid- seventies, when at that time the dollar was worth less than the gold that backed it, for many economic and political reasons which I don't want to explain or fully understand.
The dollar today is backed by the fuzzy logic called the Fiat Standard. Basically , every commodity, product , labor involved has an intrinsic value, and a dollar can buy X amount of that value, or that value is worth X dollars in exchange.
And yes, it should be 1.73 cents not $1.73.
Anyway, I think this is fascinating, I'm always willing to learn more things about the world and how it works, Thanks Perry for your inputs.

http://www.thetrumpet.com/index.php?page=article&id=2819