Should/Would The US Mint Institute An Alloy Recovery Program?

Canada alloy recovery program made sense because they were recovering basically the pre 1981 five cents and up that were made from pure nickel. The metal was already worth more than the face value of the coins and there was no refining needed in recovering the metal. Also much of that was done several years ago when the price of nickel was much higher (It got up to around $20 a pound. $5 face value in nickels contains nearly $20 in metal.)

Today's lower metal prices would make an alloy recovery for the US maybe a break even proposition for the copper one cent pieces probably a small loss on the five cent. Out of the question for the higher denominations. If metal prices were to go back up closer to their historic highs it would make sense for the copper cents and nickels.

They did have an "alloy recovery" program back in the late 60's that recovered a lot of the silver coins from circulation. That ended around 1970 or 71 when the amount of coins recovered dropped to the point where it was no longer economically feasible to continue. Shortly after that the melting ban on silver coins was rescinded.

I really wish all those corroded cents would be pulled from circulation instead of being wrapped and rewrapped. Just food for thought, why not throw those useless dollar coins the government has hoarded in government vaults? Is there really any alloy that is not subject to corrosion? Tired of those nasty cents covered on green and other funky colors.

Melting these would not compensate for the seigniorage that is already on the books. That is, it would cost a lot to melt them.

So what does our government plan to do with the billions of dollar coins just sitting there in vaults? Maybe they could be shipped to US territories?

True, but it doesn't seem likely that will happen anytime soon. It would seem kinda weird seeing brand new 2007 prez dollars being released into circulation seeing light of day in let's say 2030.

Stop making one cent pieces and they all disappear from circulation on their own fairly quickly.

I love this logic. The government minted a bunch of money and now if they destroy it, they lose money. But the money didn't exist before they made it so what are they losing exactly? This reminds me of the discussion I once heard about how much they'd lose if the Post Office burned down with all those rolls of stamps in them. Somehow I doubt they do accounting the same way the mint does.

For the sake of those who do not know, the mint sells the coins to the Federal Reserve at face value. The seigniorage is the profit made on that sale. The Fed shows the coins on their books as an asset, at face value. If they want to melt them, they will have to show that full value as a loss, minus what the recycler might pay and you know that is not going to be face value.