blahA Penny for Your Thoughts, and 1.4 Cents for the Penny
By FLOYD NORRIS
WHAT happens if a penny is worth more than 1 cent?
That is an issue the United States Mint could soon face if the price of metals keeps rising. Already it costs the mint well more than a cent to make a penny.
This week the cost of the metals in a penny rose above 0.8 cents, more than twice the value of last fall. Because the government spends at least another six-tenths of a cent — above and beyond the cost of the metal — to make each penny, it will lose nearly half a cent on each new one it mints.
The real problem could come if metals prices rise so high that it would be economical to melt down pennies for the metals they contain.
Appearances aside, pennies no longer contain much copper. In the middle of 1982, after copper prices rose to record levels, the mint starting making pennies that consist mostly of zinc, with just a thin copper coating.
But these days, zinc is newly popular. Rising industrial demand and speculation have sent the price rocketing. Since the end of 2003, zinc prices have tripled. Gold, by contrast, is up only about 50 percent.
Nice. If you happen to just have an industrial sized smelter in your garage or something, get ready to order a billion or so pennies from your local bank so you can melt them down. Considering the equipment and the massive amount of weight involved for transport, I doubt it's going to become economically feasable to melt the suckers down anytime soon, even if you doubled the current cost of zinc.
Still, it would be nice to see steel pennies again. They made them for a time during WWII when there was a zinc shortage and I always though they looked pretty spiffy. Chances are it was just a novelty effect though. No matter what they do, something should be shifted. It dosen't make much sense to spend 1.6 cents to make a cent.
