Monday, 24 March 2008

Piggybacking off the piggybank

I knew that the cost of producing and distributing American pennies was more than their face value, but I didn't realise how bad things had got with the recent runup in commodities prices. Forget about the production and distribution cost; let's just talk about the raw metal. As of March 21, the metal content of a pre-1982 U.S. penny is worth 2.3865 cents, and the content of any standard U.S. nickel is worth 6.5572 cents. (It's been even higher in the past month.)

Of course, it's illegal to melt them down or export them, but that didn't stop Indian entrepreneurs when their one-rupee coin was worth 35 rupees last year. Which makes me wonder if we'll see the same thing start to happen in the U.S. -- you know, desperate times and all.

Slight tangent: Last year, when we took our old refrigerator out to the curb/pavement to be picked up and disposed of, it had been stripped of all the copper pipes on the back within hours. It was a little bit surreal -- I guess there are people constantly driving around and spotting copper to be stripped. Do they have shortwave radio or something? An Internet forum? Strange.

Anyway, I wonder what Bank of America would say if I proposed to withdraw my entire balance in nickels (some pennies are more valuable, but you're going to get a small portion of pre-1982 ones in a given roll). It's not illegal to do that, but I suppose they could refuse the request.

The least valuable coins out there -- in terms of the percentage of metal value to face value -- are the Sacajawea and Presidential dollar coins. Which is a shame, because I like them, but I suppose it's a rare thing to get aesthetics and finance to work well together.

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