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Dunkin Donuts Shop Stops Accepting Pennies
November 2, 2010 09:46 AM
PENNIES FROM HEAVEN...OR HELL?
One Dunkin Donuts store is taking a firm stand against the penny,
according to the Consumerist
The penny--and whether or not to retire the one-cent piece--has been the subject of intense debate over the past couple of years.
According to the group Citizens to Retire the Penny, the one-cent piece actually costs about four hours and $60 per person, annually.
Based on a study by the National Association of Convenience Stores and Walgreens, Citizens to Retire the Penny says using pennies wastes about two seconds on every cash transaction, translating to four hours per person per year. They estimate each person’s time at $15/hour, arriving at the conclusion that each person is losing $60 per year, at a cost to the nation of over $15 billion per annum.
Five years ago, it cost 0.98 cents to manufacture and distribute a penny. Now, thanks to rising zinc prices caused by increased industrial demand (pennies are 97.5% zinc), a single penny costs about 1.4 cents to make.
With the U.S. Mint pumping out 8.7 billion pennies last year, $87,000,000 worth of pennies actually cost $121,800,000 to produce.
Francois Velde, a senior economist at the Federal Reserve Bank of Chicago and co-author of “The Big Problem of Small Change,” argues that the metal in money must be worth less than a coin’s face value. If not, people will hoard coins, melt them down and sell them for cash, which happened in the 1960s when quarters were made partly of silver.
Pennies are an annoyance to most people, as evidenced by the mounds of them in every “Take a penny, leave a penny” dishes on the counter of just about every store in America. About $10.5 billion, or $93.75 per household, is sitting idle, according to a survey by Coinstar.
“The purpose of the monetary system is to facilitate exchange, but the penny no longer serves that purpose,” Harvard economics professor Gregory Mankiw, a former chairman of President Bush’s Council of Economic Advisers, told the American Spectator. “When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful.”
Former Congressman Jim Kolbe (R-AZ), agrees.
In 2006, he introduced the Currency Overhaul for an Industrious Nation (
Kolbe suggested rounding up or down to the nearest nickel for all cash transactions, as the Dunkin Donuts location mentioned above has started doing. Items that cost $5.33 would be rounded up to $5.35. Goods costing $5.32 would be rounded down to $5.30. The penny would still be legal for credit card and money order exchange in exact amounts.
“Times change, you have to adapt to those changes,” Kolbe told USA Today. “A penny should be thought of not as some nostalgic thing but as currency. And it simply has no use as a medium of commerce.”
The nickel, Kolbe’s muse, is 75% copper. He also pushed for a dollar coin to replace the dollar bill.
The dollar coin is nearly 89% copper.
So, what does this have to do with anything?
The biggest copper producing state in the nation is…
Arizona, Jim Kolbe's home state.
As many people as there are who want to do away with pennies, there are just as many who want to see it stick around.
Retired firefighter Sylvester Neal, 62, told
that eliminating the penny would be “like losing part of our American history.”
Neal has a collection of 700,000 pennies and is loath to give them up.
“It's therapy for me,” he said. “When I get a little uptight, I go into the garage and turn on my music and turn on my lights and play with my pennies. It’s like being in hog heaven.”
Mark W. Weller, of Americans for Common Cents, a pro-penny lobbying group, says the penny is a psychological hedge against inflation.
“If you take the penny away,” he told
magazine, “that has a huge impact on how people view the economy and inflation.”
The Washington, D.C. law firm of Sonnenschein Nath & Rosenthal lobbies the federal government regarding the U.S. coin and currency system on behalf of Jarden Zinc Products, a subsidiary of Jarden Corp., according to a form filed posted online by the Senate’s public records office.
Remember, pennies are 97.5% zinc.
Jarden supplies zinc coin blanks to produce currency.
Mark W. Weller, the aforementioned head of Americans for Common Cents, is an attorney.
In Washington, D.C.
Care to guess who he works for?
None other than…Sonnenschein Nath & Rosenthal.
Regardless of hidden agendas and sentimental attachments, for the time being, the penny is safe. Before he left the White House, President George W. Bush signed into law legislation directing the Secretary of the Treasury to issue Lincoln pennies with four newly designed reverse, or “tails” side, images in 2009, the 200th anniversary of Abraham Lincoln’s birth.
They will depict his birth and early childhood in Kentucky; his formative years in Indiana; his professional life in Illinois; and his presidency in Washington.
Sylvester Neal, your "therapy" is safe and sound...for now.
No positions in stocks mentioned.
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