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Penny prices pinched by rising cost of metal

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Penny prices pinched by rising cost of metal

Old 05-07-08, 11:33 AM
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Penny prices pinched by rising cost of metal

Penny prices pinched by rising cost of metal
5/7/2008

WASHINGTON (AP) -- Further evidence that times are tough: It now costs more than a penny to make a penny. And the cost of a nickel is more than 7 cents.

Surging prices for copper, zinc and nickel have some in Congress trying to bring back the steel-made pennies of World War II and maybe using steel for nickels, as well.

Copper and nickel prices have tripled since 2003 and the price of zinc has quadrupled, said Rep. Luis Gutierrez, D-Illinois, whose subcommittee oversees the U.S. Mint.

Keeping the coin content means "contributing to our national debt by almost as much as the coin is worth," Gutierrez said.

A penny, which consists of 97.5 percent zinc and 2.5 percent copper, cost 1.26 cents to make as of Tuesday. And a nickel -- 75 percent copper and the rest nickel -- cost 7.7 cents, based on current commodity prices, according to the Mint.

That's down from the end of 2007, when even higher metal prices drove the penny's cost to 1.67 cents, according to the Mint. The cost of making a nickel then was nearly a dime.

Gutierrez estimated that striking the two coins at costs well above their face value set the Treasury and taxpayers back about $100 million last year alone.

A lousy deal, lawmakers have concluded. On Tuesday, the House debated a bill that directs the Treasury secretary to suggest a new, more economical composition of the nickel and the penny. A vote was delayed because of Republican procedural moves and is expected later in the week.

Unsaid in the legislation is the Constitution's delegation of power to Congress "to coin money [and] regulate the value thereof."

The Bush administration, like others before, chafes at that.

Just a few hours before the House vote, Mint Director Edmund Moy told House Financial Services Chairman Barney Frank, D-Massachusetts, that the Treasury Department opposes the bill as "too prescriptive" in part because it does not explicitly delegate the power to decide the new coin composition.

The bill also gives the public and the metal industry too little time to weigh in on the new coin composition, he said.

"We can't wholeheartedly support that bill," Moy said in a telephone interview. Moy said he could not say whether President Bush would veto the House version in the unlikely event it survived the Senate.

Sen. Wayne Allard, R-Colorado, who is retiring at the end of the year, is expected to present the Senate with a version more acceptable to the administration in the next few weeks.

The proposals are alternatives to what many consider a more pragmatic, but politically impossible solution to the penny problem: getting rid of the penny altogether.

"People still want pennies, which is why we're still making them," Moy said.

Even Treasury Secretary Henry Paulson acknowledged in a radio interview earlier this year that getting rid of the penny made sense but wasn't politically doable -- and certainly nothing he is planning to tackle during the Bush team's final months in office.

In 2007, the Mint produced 7.4 billion pennies and 1.2 billion nickels, according to the House Financial Services Committee.

Other coins still cost less than their face value, according to the Mint. The dime costs a little over 4 cents to make, while the quarter costs almost 10 cents. The dollar coin, meanwhile, costs about 16 cents to make, according to the Mint.
http://www.cnn.com/2008/US/05/06/coi....ap/index.html

Okay, we need to make more dollar coins and less pennies for a better return on investment.
Old 05-07-08, 11:38 AM
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I am willing to round up if it means we can get rid of the penny.
Old 05-07-08, 11:39 AM
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i will sell all of my nickels back to the government for 7 cents apiece. that's a win-win. if you work for the US Treasury, please PM me so we can get this started... I have a lot of nickels and it takes awhile to roll them.
Old 05-07-08, 11:43 AM
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This happens periodically as commodity prices fluctuate.

There's a big problem with thieves stealing copper off anything it's attached to. Electrical wires, phone cable, pipes from abandoned homes, building ornaments, etc.

There was a toxic waste spill around here that was caused by thieves stealing some brass valves.

$10 theft cost a $250,000 spill cleanup
Phillip Matier,Andrew Ross

Wednesday, May 7, 2008

The 3,500-gallon spill of a toxic chemical into San Pablo Bay over the weekend cost an estimated $250,000 to clean up - and it was all for a lousy $10 worth of brass.

The thieves who caused the spill of the chemical toluene at Reaction Products in Richmond were after the valves on holding tanks - the latest example of a crime wave involving barely precious metals that yield a few dollars at the recycling yard but can cost taxpayers big bucks.

In the past year, thieves have stolen everything from copper wiring along the Richmond Parkway to the little aluminum shades that go over the city's red, green and yellow street signals.

"You won't believe the lengths that thieves will go to these days for a couple of bucks worth of metal," said Richmond police Lt. Mark Gagan.

It's happening in San Francisco as well, where someone stole two nearly century-old bronze plaques from the Shakespeare Garden in Golden Gate Park a couple of weeks back.

"And that was just a week after the cops busted a dude who was dragging a 300-pound bronze tablet from Dolores Park," said Recreation and Park Department spokeswoman Rose Dennis.

The damage can run into the thousands - as evidenced by metal bandits in Richmond who pulled an air conditioning unit out of the Nevin Community Center, and in the process ruptured a water pipe.

The building flooded, causing tens of thousands of dollars in damage. "All for a few feet of copper wire and plumbing worth about $2.50," Gagan said.

Replacing the stripped wiring on the Richmond Parkway cost an estimated $250,000 and prompted the city to install wire alarms.

And its not just public property that's getting hit.

Some homeowners have come back from extended absences to find that metal thieves have torn out their interior walls and carted off wiring and piping.

Even the dead are targets.

Last year, Gagan said, metal thieves made off with more than 200 little graveside bronze flower vases from Rolling Hills Memorial Park cemetery in Richmond.

http://www.sfgate.com/cgi-bin/articl...BAPO10HQF4.DTL
Old 05-07-08, 11:44 AM
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i hate pennies. I leave them whenever I get them in change. having steel coins would be strange however.
Old 05-07-08, 11:51 AM
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Originally Posted by kvrdave
I am willing to round up if it means we can get rid of the penny.
Both the local 7-11 and the deli where I get lunch always round, sometimes up and sometimes down to the nickel. Which is fine with me because I usually decline to take the pennies or leave them in a tip jar.

We should just do away with the penny and just round everything to the nearest .05.
Old 05-07-08, 12:37 PM
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My wife's business had 4 copper AC compressor coils stolen off their roof.

The value of the copper: ~$200.

The cost to replace the compressors: $25K.

They now have a welded cage around the new compressor units.
Old 05-07-08, 12:39 PM
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Originally Posted by Pistol Pete
My wife's business had 4 copper AC compressor coils stolen off their roof.

The value of the copper: ~$200.

The cost to replace the compressors: $25K.

They now have a welded cage around the new compressor units.
Ah, the joys of a society on meth.
Old 05-07-08, 12:42 PM
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So what if it cost TEN cents to make a penny? They're re-usable.
Old 05-07-08, 12:51 PM
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Originally Posted by Mrs. Danger
So what if it cost TEN cents to make a penny? They're re-usable.
Are you serious?
Old 05-07-08, 12:57 PM
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Originally Posted by Brian Shannon
Are you serious?
I think she is. It is not like the penny is only used by one party and then distroyed. However, it still would make fiscal sense to do away with the penny and dollar bill (only have dollar coins). If you were to do away with the nickel, you would have to ax dimes as well (couldn't make change for a quarter).
Old 05-07-08, 02:12 PM
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"People still want pennies, which is why we're still making them," Moy said.


No they don't. They leave them in a cup by the cash register. When they get home, they dump them in a bowl.

According to this calculator, it takes 3.4 cents to buy what a penny bought 30 years ago. Get rid of the penny.
Old 05-07-08, 02:13 PM
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Originally Posted by Brian Shannon
We should just do away with the penny and just round everything to the nearest .05.
They do this in Australia and it didn't bother me as much as I thought it would when I was over there.
Old 05-07-08, 02:19 PM
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Originally Posted by Nick Danger
"People still want pennies, which is why we're still making them," Moy said.


No they don't. They leave them in a cup by the cash register. When they get home, they dump them in a bowl.

According to this calculator, it takes 3.4 cents to buy what a penny bought 30 years ago. Get rid of the penny.
Exactly.

The coins cost more to produce than they are worth, they buy less and there are billions of them sitting jars all over the country.

I'll bring mine in if the government wants to pay me 1.25 cents for each one. Somehow I don't think they would do that, it makes more sense to make them for 1.26 cents.
Old 05-07-08, 02:30 PM
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The feds often fiercely and senselessly resist changes that make sense.

Anyone remmber this? Still doesn't look like that'll get anywhere.
http://en.wikipedia.org/wiki/Federal...anknote_design

Last edited by Ranger; 05-07-08 at 02:33 PM.
Old 05-07-08, 05:05 PM
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Originally Posted by Brian Shannon
Are you serious?
I still think we don't need them, just not for that reason.
Old 05-07-08, 05:14 PM
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Originally Posted by Nick Danger
"People still want pennies, which is why we're still making them," Moy said.


No they don't. They leave them in a cup by the cash register. When they get home, they dump them in a bowl.

According to this calculator, it takes 3.4 cents to buy what a penny bought 30 years ago. Get rid of the penny.
So, what you need is a 3.4 cent coin then, or a coin thats value varies with inflation - an index linked penny.....just thinking out loud. Sorry.

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