New Metal For Pennies And Nickels

Canada has peen making copper-plated and nickel-plated steel coins for several years now. They're just not the same, but they are cheaper to produce.

Actually, the US Mint is a revenue producer for the US Government- they make several hundred million dollars per year in seniorage. Seniorage is the difference between the actual cost to produce a coin and its face value or selling price in the case of collector issues. True, the cent and nickel are loss leaders but dimes, quarters, halves, and dollars more than make up for it. I believe that the seniorage on a dollar coin is somewhere around 80 cents per coin. If the cent and five cent are switched to new metals, the Mint will just have a higher profit, not a lessened loss.

They aren't circulating, but think of how many people are getting them from their banks and putting them aside. The Mint recently conducted a poll, the results were 50% of those polled were saving the Presidential dollars. The mint is making money on every Dollar saved.

The legislation is just being proposed, so there's been no decisions yet (I think the mint will be allowed to come up with a suitable composition).

Besides seniorage (which helps the mint directly), whenever money leaves circulation (either in the U.S. by being collected, or by leaving the U.S. altogether), it has the effect of a permanent interest-free loan to the U.S. gov't.

1,2, and 5 Eurocent coins are copper-plated steel although I do not know their production costs.

I think they should retire the cent and issue a debased 2 cent piece. Then you can make any value up to 0.99 except for 0.01 and 0.03 without the use of a penny.

Even The lowest grade scrap steels are selling for 15c per pound now days and prices are still escalating. Steel production is an exothermic reaction so upward pressure on prices won't be as high as on other base metals but this is still high.

Steel fabrication costs are quite high so even the cheapest rolled steel should run about 25c per pound. By the time it's punched and coated it will easily be 40c/ lb. These are extremely conservative estimates.

A pound of steel, I believe, will make about 130 penny sized coins. So we're in the .3c area just in planchet costs. They'd be lucky to get a quarter million strikes from dies if striking these so coining costs would probably be at least in the 1c area for a conservative total of 1.3 cents.

Frankly this is really all pretty meaningless when you're talking about a rational currency system. Each time a penny is used it costs individuals and companies far more in handling and counting costs than one cent. We lose money on these coins everytime they are used. It would make far more sense to eliminate them than to use them. Even if they sprang forth from the earth and were free to the government, it would be advantageous to simply rebury them.

Two years ago I visited Italy. I only saw two, one cent euros. I made plenty of transactions, but 1 cent coins were rare. I can't imagine why?

Whatever the Italians are doing to reduce the use of the cent, is obviously working. Maybe we should take notice.