True or False; A modern day penny is made out of copper?
The answer may surprise you, and so could details of the repercussions that would be felt if the penny was no longer part of American currency.
Could you, and the country as a whole function if pennies were no longer in circulation?
First of all, the first wave of pennies pennies that the Ul.S. Mint produced way back in 1793 were made out of copper.
The ones you have floating around the console of your car and in your dresser at home are made out of copper-plated zinc.
The brokerage firm Bernstein recently posed the question of whether or not the penny serves any useful purpose anymore.
Not that we want to compare ourselves to Canada in anything, but the Canadiens abandoned their penny about ten years ago, and they have seemed to survive okay.
Here’s one very compelling argument to dump the penny. It costs more to produce it than it’s worth. The actual penny with Abe Lincoln’s face on it costs a cent just to manufacture, and its worthy is roughly 0.7 of a cent in metal.
The math doesn’t exactly add up there.
Another argument Bernstein made to show the uselessness of the penny is the amount of time it takes a merchant to handle when dealing with retail transactions.
Admit it, when you get change and you’re handed a penny, more often than not the first thing you do is look for one of those loose change trays that vendors will have in front of the cashier.
Some people act like that little one cent token is toxic or something. Dangerous to carry in your purse or pants.
The argument was made in the Bernstein report that if the penny was sent packing permanently, the mining industry would take a big hit.
How? A lot of metal would be freed up for recycling, meaning there would be lower mining supplies and consequently, lower prices in that industry.
What about stockholders of mining companies, specifically those that mine zinc? Well, each year there is a bout 12 million metric tons of zinc produced, and penny production accounts to about 3.7% of that, so it wouldn’t be significant.
Bernstein estimated that there are about 180 billion pennies floating around the country right now. (I’ll save you from doing the calculation in your head. That’s $1.8 billion)
You could buy a mid level Major League Baseball Team for that kind of money.
Currently, there are no concrete plans to dump the penny but even if we did, if we can somehow come of a global pandemic okay, chances are we’d be just fine without them.
Back in 1857 the U.S. got rid of the halfpenny, and it seems we survived that just fine.
If you happen to own one of those halfpennies from the 1800’s, a single coin is now worth about $30, and uncirculated pieces have a value north of $450.
The lesson there is hang on to the pennies that you do have now, just in case they become extinct some day.
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