Wednesday, July 13, 2011

Small Currency Denominations Will Soon Disappear

What's a real world consequence of QE(n)? Pennies, soon followed by nickels, dimes, etc. become a hassle. The answer plastic and smart phone electronic wallets, right? While both of those options take away the short-term inconvenience/pain, neither address the root of problem – currency devaluation driven by excessive debt levels.

A few observations:
(1) Today 97.5% zinc pennies do not cost more than cent to make. They may look copper, but like many things in America, it's mostly show for the cameras.
(2) The mint stopped producing 95% copper pennies in 1982.
(3) The effects of currency devaluation are everywhere but rarely noticed.

Some Shops Do Away With Pennies


United States Circulating Coinage Intrinsic Value Table