Rep. Kolbe wants to ditch the penny cause zinc costs too much

[donsu]

http://articles.news.aol.com/business/article.adp?id=20060602110109990006


The Fight Against the Penny
Rep. Kolbe Wants to Do Away With the Coin


As the soaring price of zinc going into pennies pushes the cost of production above the coin's value, one congressman is rekindling plans to eliminate it. Representative Jim Kolbe, R-Arizona, told CNNMoney.com he plans to reintroduce legislation to eliminate the penny in the coming weeks.

"Most people still think the penny has no purpose and we should get rid of it," said Rep. Kolbe, who introduced legislation in Congress in 2001 that required the rounding of cash transactions to the nearest 5 cents. Although the Legal Tender Modernization Act did not pass, getting rid of the penny has taken on urgency for Rep. Kolbe, as the average price for zinc has shot up from 35 cents a pound in 2002 to 63 cents a pound in 2005 -- driven in large part by increased demand from China.

The issue "used to be an oddball thing that Kolbe had an obsession about," the congressman said of himself. "Now it will become a necessity. We'll be compelled to change."

Over half of the U.S. Mint's coin production comes in the form of pennies, which are made of 97.5 percent zinc. Since the Mint doesn't stockpile its inventory of materials, it is sensitive to fluctuations in zinc's price.
-snip-
-------------------------------------

it doesn't matter, our money is empty anyway.

and then there is this:

Although ACC has ties to zinc companies, Kolbe represents Arizona, the largest copper producing state in the nation. Copper is the main material of the nickel coin which, after the elimination of the penny, would benefit by becoming the lowest denomination of currency in circulation.


laughing madly


why does China need so much zinc?

[msongs]

1. pennies are a nuisance - get rid of them is fine w/mois nt

[burythehatchet]

2. They're like sand after a day at the beac

they end up in every crack of the body

[nuxvomica]

3. China probably needs the zinc for steel making

It's used to galvanize steel.

[primative1]

4. Pennys are horrible ...

Round everything off to the nickle ... fine with me.

[MADem]

5. Of course, you do know that will mean that manufacturers and retailers

will be ripping us off for up to four cents on every purchase. They'll never round DOWN, the bums! And they'll be sure to price stuff so we have to fork over that soon-to-be nonexistant few pennies! Someone will make money on this, you can be sure! It won't be the consumer, though!

Oh well, another little tradition, down the pan. No more PENNY FOR YOUR THOUGHTS, PENNIES FROM HEAVEN, SPEND A PENNY, all those phrases....!

Life goes on.

[Warren Stupidity]

8. They are already doing that by

rounding prices up to the nearest penny rather than charging the actual cost!
I don't know about you but I either leave the pennies in the dish or the clerk takes the pennies out of the dish, and nobody is getting screwed.

I think perhaps either the penny should go or a zero ought to go but the persistent post WWII inflation has, 60 years later, devalued the currency to the point where one or the other should be done.

[donsu]

6. so who has stock in nickel?

nt

[dsc]

7. Given the way our currency is going something will have to give

either we will have to make cheaper pennies or no pennies.

[dipsydoodle]

9. One of the greastest single causes

of inflation the the UK was the change over in the early '70s from the original sterling system of £1=240d to a decimalised system £1=100p.

Loss of your penny will achieve excatly the same for you.

So - you want inflation : go ahead - you're free to do so.:rofl:

[NV Whino]

10. But, but, but...

what about the penny loafers?

[HamdenRice]

11. Underlying economic problem: melting down pennies

There are two components to the economic problem that occurs whenever a coin costs more than its value.

First is that the government loses money on each penny it mints. The whole point of representational money, like paper, is that the actual bill or coin costs less than the value.

The other is that it creates an incentive for people to hoard pennies, melt them down to the underlying metal and sell them at a profit.

No government can issue a coin that is worth less than its physical value.