The future is here - inflation and the impending new currency
Amazing story at:
http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm?POE=NEWISVA New rules outlaw melting pennies, nickels for profit
Soaring metals prices mean that the value of the metal in pennies and nickels exceeds the face value of the coins. Based on current metals prices, the value of the metal in a nickel is now 6.99 cents, while the penny's metal is worth 1.12 cents, according to the U.S. Mint.
That has piqued concern among government officials that people will melt the coins to sell the metal, leading to potential shortages of pennies and nickels.
What can one say but WOW! It is curious to be such a novelty, while it must be a well-known dilemma for all governments as inflation degrades the value of currency. The reason pennies are not pure copper was to save money.
Some people will say we ought to abandon the penny, but that is just silly - trying to round everything to the nearest 5! No, the solution must be to "rescale" a NEW currency and take the old currency out of circulation. Something I don't know if the U.S. has ever done.
It is true, a factor of 5 ought to do - so nickels become pennies, quarters become nickels, dollars become (approximately quarters), fives becomes ones, etc.
Mark my humble words - this WILL happen sometime in the next 1-5 years. I'd have to imagine it is already being planned, at least as an option.
BUT for metal coins it may already be TOO LATE. If the metal is worth more than the coins, there's no incentive for anyone to "trade them". I suppose coins are a small minority of the curr3ency and will just have to be accepted as a loss.
It is a fun thought. That $25,000 car you're lusting over will only cost N$5,000! Of course your income will drop from $20/hour to N$4/hour, so it'll take some getting used to!
I do wonder how long the "exchange period" will be. The government can "buy back" old currency, via banks, just as it now circulates new currency. I'd imagine there'd be like a 1 year window where merchants would have to accept both, although perhaps it could be shorter?
And what of all our old change hiding away in jars and such? Well, coins are perhaps half saved as collector value anyway, so you can always keep them and sell to collectors!
Fun fun fun!
http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm?POE=NEWISVA New rules outlaw melting pennies, nickels for profit
Soaring metals prices mean that the value of the metal in pennies and nickels exceeds the face value of the coins. Based on current metals prices, the value of the metal in a nickel is now 6.99 cents, while the penny's metal is worth 1.12 cents, according to the U.S. Mint.
That has piqued concern among government officials that people will melt the coins to sell the metal, leading to potential shortages of pennies and nickels.
What can one say but WOW! It is curious to be such a novelty, while it must be a well-known dilemma for all governments as inflation degrades the value of currency. The reason pennies are not pure copper was to save money.
Some people will say we ought to abandon the penny, but that is just silly - trying to round everything to the nearest 5! No, the solution must be to "rescale" a NEW currency and take the old currency out of circulation. Something I don't know if the U.S. has ever done.
It is true, a factor of 5 ought to do - so nickels become pennies, quarters become nickels, dollars become (approximately quarters), fives becomes ones, etc.
Mark my humble words - this WILL happen sometime in the next 1-5 years. I'd have to imagine it is already being planned, at least as an option.
BUT for metal coins it may already be TOO LATE. If the metal is worth more than the coins, there's no incentive for anyone to "trade them". I suppose coins are a small minority of the curr3ency and will just have to be accepted as a loss.
It is a fun thought. That $25,000 car you're lusting over will only cost N$5,000! Of course your income will drop from $20/hour to N$4/hour, so it'll take some getting used to!
I do wonder how long the "exchange period" will be. The government can "buy back" old currency, via banks, just as it now circulates new currency. I'd imagine there'd be like a 1 year window where merchants would have to accept both, although perhaps it could be shorter?
And what of all our old change hiding away in jars and such? Well, coins are perhaps half saved as collector value anyway, so you can always keep them and sell to collectors!
Fun fun fun!
posted by Ares Olympus at 7:26 PM
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