Should U.S. follow Canada and drop the cent?
invite response
2014 Mar 14, 4:51pm 1,045 views 6 comments
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epitaph
2014 Mar 14, 9:17pm
What I find fascinating is that nickels are worth more melted down than they are as coins.
smaulgld
2014 Mar 14, 9:26pm
What I find fascinating is that nickels are worth more melted down than they are as coins.
Silver dimes and quarters from 1964 are also worth far more than their face value
A 1964 quarter is worth $3.88
http://www.coinflation.com/coins/1932-1964-Silver-Washington-Quarter-Value.html
A 1964 dime is worth $1.55
http://www.coinflation.com/coins/1946-1964-Silver-Roosevelt-Dime-Value.html
curious2
2014 Mar 15, 3:32am
If only we had some agency or reserve in charge of stabilizing the currency, so that coins wouldn't lose value the way they have. Oh, wait, nevermind.
smaulgld
2014 Mar 15, 4:47am
If only we had some agency or reserve in charge of stabilizing the currency, so that coins wouldn't lose value the way they have. Oh, wait, nevermind.
The Fed's primary purpose is to keep the big banks solvent and to print dollars for deficit spending so politicians can make promises to get reelected. In return the politicians support whatever the banks want.
The latter would have required that everything round to the nearest 5 cents just like the Canadian law.
Did it require rounding *everything* to the nearest 5 cents? What about securities transactions? I bet market-makers would be happy if those were rounded to the nearest 5 cents. It'd be like the old fractional days.
The last Canadian cent ever to be made came off the press on Friday. Specialists forecast the elimination will save the northern country $11 million a year. Some say the same move should happen in the United States, also.
The final Canadian penny
The Obama administration suggested that the States find cheaper materials to make pennies and nickels now that the price of copper has increased a ton. Making a cent costs more than two cents.
The last Canadian penny was just created on Friday. Canada decided that the best way to solve the problem is simply to get rid of the cent altogether.
Production not worth it
Most consumers think pennies are more than worthless; they are annoying. They are annoying to have to take around considering vending machines and parking meters do not use them. The value is almost worthless to a lot of people, which make it even more annoying that the Canadian government was spending 1.6 cents to produce each one.
Savings greater in the US
Rick Smith of the Motley Fool explained that the United States could save $70 million a year by finishing production of cents. Each cent costs 2.41 cents to produce in America. That means the U.S. is losing more than Canada on the production.
Canadians ask them to go to charity
While the coins will still have value, the Canadian government is encouraging its citizens to get them out of circulation by donating them to charity.
Jim Flaherty, the Canadian Finance Minister, said:
Increments of five used
Merchants will have to round to the nearest nickel, which will cost customers more. This can be a concern that most people have. This would really not be true though because costs would be rounded down and up dependent upon the actual price, according to the Wisconsin State Journal. Both Canadian and U.S. researchers have debunked the theory.
Change looked at in the past
There have been two times in recent years that the U.S. has tried to get rid of the penny. This involves the Legal Tender Modernization Act of 2001 and the Currency Overhaul for an Industrious Country (COIN) Act of 2006. The latter would have required that everything round to the nearest 5 cents just like the Canadian law.
Do we need dollar bills still?
Other specialists want to go one step further. An article in Wisconsin's Lacrosse Tribune suggests eliminating the cent and replacing the $1 bill with a coin that would be different enough from the Susan B. Anthony dollar coin that it could not be mistaken for a quarter.
The article points out that the paper dollar went extinct in Canada a long time ago. The United States government found that $5.6 billion would be saved in the country if the U.S. would change its dollar bills as well.
Paper bills only final a few years while coins do not have to be remade for many years, which is why it would create savings.
Sources
Lacrosse Tribune
Chicago Tribune
Daily Finance
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