Penny and Nickel Coins to be Phased Out in 2013

*Update: While we are confident that it will not be long until the Treasury takes the penny out of circulation and at least debases the nickel, the author of this story has apparently issued a retraction to the story.
Our thanks to SD reader Mark for alerting us.
-Doc

Is it time to stack copper and nickel as well as silver?
Timothy Geithner reportedly has announced plans by the US Treasury to completely remove both the penny and the nickel from circulation beginning in January 2013, with plans to potentially also remove the dime from circulation in 2014. 
Will the American people finally wake up to the currency debasement of the US dollar when 3 of the 4 main US coins in circulation are no longer minted due to currency devaluation?

Earlier this week Canada announced that they would be phasing out their penny coin.  On the heels of the Canadian announcement, U.S. Treasury Secretary, Tim Giethner stated in a press conference today that the U.S. Mint will remove the penny and nickel coins from circulation, starting early in January 2013.

Due to the rising costs of zinc and production related expenses, the U.S. Mint now spends 4.8 cents to make a pennyAnd the cost of copper and nickel have inflated the cost to create a nickel coin to 16.2 cents.

In 2011, the U.S. mint made over 4.9 billion pennies, at a cost of $118 million to make.  That is $236 million to produce only $49 million worth of pennies, a loss of $187 million in minting costs.  Minting the nickel coin also represents a significant loss in revenue.

By comparison, the dime (which costs 9.2 cents to mint) and the quarter (21.31 cents) are economically more feasible, and will continue in circulation through 2013.  However, according to Giethner, the dime may be in jeopardy as early as 2014.

Read more:

Comments

  1. So, we are going to increase the the value of our least significant coinage from $0.01 to $0.10. If our smallest unit of transaction is $0.10, doesn’t that mean we have experienced a 1000% inflation since 1982 when they changed from a copper penny to a zinc penny  to save costs? That would be roughly 30% inflation per year which is slightly higher than the cooked up CPI of 2-3% per year. And that is pure inflation of the value of money. That cannot be “cooked”.

    (I’m assuming, of course,  that when they changed to a zinc penny that the cost was around a penny to produce.)

    We are on that slope. And it doesn’t point up.

    • Currency debasement in progress…

    • This reminds me of an interview with Kyle Bass in which talked about when he ordered $1 mil. worth of nickels from his bank.  It had to be approved by the Treasury and they asked him why he wanted all the nickels.  He said, “Because I like nickels”

    • It looks like you’re correct! These recent actions on debasing the metals’ values in coins are just proving that the official inflation is bogus and that 1000% inflation rate is more realistic.

  2. This has little to do with currency debasement in the big picture. This is about the elimination of money itself. Keep that in mind because it is the future. As some of you will have noted already virtually all of the higher denomination bills have also been removed from circulation. Seen a 1000 note lately?…if ever? So in fact the currency elimination process is happening at both ends of the spectrum and now will include small denomination coinage and all high value bills. It is just a matter of time before we are left with a small group of paper notes and the 25 cent piece but in time all of them are headed for the trashbin of history. Money is electronic now dontcha know? Nobody gets to fly under the radar anymore and there will be no place for free wheeling cash in the new world order. Terrorists and criminals will be tracked on every transaction via debit, credit and other forms of electronic money sharing transactions. Even the new “phone” money is under survellance. Do I even need to mention that you will not be able to buy gold or silver without coming to the attention of the authorities?  

    • The money is being eliminated due to monetary debasement though as per the article. If our currency wasn’t being debased then the coins face value would still be a productive, lucrative or at least sustainable venture. Debasement is used on physical coins by changing or reducing the metal, in fiat money it’s where volume of money is higher than demand. We know for a fact we are seeing fiat debasement and coin debasement by changing the silver in 1965 coins & changing the copper in 1982 pennies.
      But yes, I agree. This is just the another step along with plastic cards toward a cashless society. Also your point is taken and that is why we should be stackin the smack now!!

    • Maybe the release of the 1000$ bill won’t happen if all the cash are removed from circulation to replace them with digital currencies. That way, people won’t notice that much about inflation.

  3. Most people won’t care about this happening and most will be thankfull that there will be no cents anymore but will be blind to the big picture concerning the nickel, the dime and the dollar. Keep Stacking

    • They are blind to more than that, Charlie.  I’d be willing to bet that none of them have ever read Congressman Howard Buffet’s speech on the link between a gold standard and personal liberty.  Everyone should read this.  It’s a real gem.

  4. Before reading the story through, I commented on the FaceBook side that the next piece to stash would be the ‘dime’ since it’s the same relative metallic value as a quarter but more ‘storable’. THEN I see THAT’S in line for the ‘chopping block’ TOO! Jeez … I’m STUCK packing away quarters!? Well, I’ll just have to move one of those 55 gallon plastic trash cans into the basement. Damn, quarters take up SO much space!

  5. I’ve been saving them for a long time. I usually sell them to a coin dealer for junk silver. More bang per grain!

    • That’s good but it’ll be also better if you keep some copper pennies to diversify your portfolio. My local coin shops don’t accept copper pennies because they too common in circulation.

  6. But, keeping tthe dollar bill. Suuuuure.
    Smallest Euro bill is 5, ~$6-7. 0.01 and 0.02 coins mostly fased out also.

    I’ve seen small bill in East Europe. And it’s pointless.

    Time for currency which will put metal value in to their currency. Stainless steel and titanium coins perhaps? Silver coins rather than bills. 

  7. I’m the bad guy- I said (many years ago) the coining of pennies is just wasteful. Their purchasing power has been nil for decades now. In 1963 a penny bought a big piece of bubblegum or a small lollypop, and also served for making change when prices were numerically much lower, so the change was more important.  Now they’re a zinc nuisance given away at cashier counters around the country.  Kill da penny, it’s crap. Keep the nickels, they still contain some nickel so they are our best coins.  You won’t see signs saying, “Need a Nickel, Take a Nickel”
    Die Pennies, Die.

  8. Avatar of IndenturedServant says:

    DO YOUR HOMEWORK PEOPLE! Ever heard of due diligence? I’m starting to think that Doc posts these stories to see how many gullible dupes he can suss out.
     
    The linked story is old. It was originally published back in May of this year back when Canada announced they were phasing out their penny. In the story above it says in part: “Timothy Geithner reportedly has announced plans……” The key word here is “reportedly”. Reported where? Go ahead and do a little due diligence, Google the subject and see what you can find.
     
    Most regulars here seem to want to be informed but at the same time you don’t seem to vet the stories you read as evidenced by your comments. In these troubled times, let one guiding principle guide you through the shit storm we are facing. That principle would be: LISTEN TO EVERYONE and BELIEVE NO ONE” unless you can verify it for yourself!

    Anybody want to buy a bridge?
    I_S

    • It doesn’t alter the fact that they are trying to do away with coinage and paper and go to a cashless society. These kinds of stories get floated out there as trial balloons……..”strawmen”, as it were….to see how the public responds. The transition may be slower than what this story suggests but it IS coming, nonetheless. 

      The FED and Wall Street have pretty much control over the world money system…China, not withstanding. So the next leg to control will be the control and monitoring of transactions of all kinds. Most transactions will go on as usual without anyone knowing what is happening in the background…but the big money or “non approved” transactions will be acted upon in an instant.

      Control is an aphrodisiac ………….monetary control is the ULTIMATE aphrodisiac. 

  9. Earlier this week Canada announced that they would be phasing out their penny coin.”

    Actually, this was announced a few months ago.  When announced, it cost 2.5 cents to make a penny, which made no sense, lol.

    Nothing wrong in cutting costs, & as long as ur paying attention to price inflation & hedging urself, I feel it’s a good thing Canada has done this. 

    • To be more precise, it was announced around April 2012 that the Canadian government will be removing the penny this fall but then, they changed their mind and announced that they’ll remove it on February 4 2013.

  10. Are we allowed to mention Bitcoin here? :-)
     
    It seems to me that the problem is not that our currency is fiat, but that the banks engage in fractional reserve, debt-based thievery. Without fractional reserve, without interest, a fiat currency is no less useful as a medium of exchange than a PM-based currency. The problem is how to store and transport value, whatever that means to a society. When value is added to the society, the medium of exchange should rise with it. And unless we’re all willing to haul buckets of coins everywhere, we’re going to be storing the value itself someplace while actually using a representation of it. As someone pointed out elsewhere, PMs sitting in a vault do absolutely nothing except to limit the total value stored, which can be done other ways.
     
    What I think many don’t understand about Bitcoin is that it does have an upper limit, it requires no bankers at all, and it preserves anonymity. The value in any given “wallet” is stored across a great number of other computers around the world, such that it would take a global disaster to lose them completely. Yes, there has been hacking at some of the exchanges, but it can’t compare with the scale of robbery being done now by the bankers.
     
    What Bitcoin needs in order to take off is to make it MUCH easier to get and use. Right now it’s a royal pain: you still need your personal checking account in order to transfer funds to one that is accepted by a BC exchange. Then you need that second account, then an account at the exchange. And of course you then need to decide whether to keep your wallet on your computer or in the cloud, and hope and pray you never lose your passwords for either method.
     
    But the point is that we need to focus on the real problem of fractional reserve / debt-dependent banking rather than whether it’s fiat.

    • Bitcoin is a digital currency so its value can be lost all in a sudden when the Internet is down for example. It has no intrinsic value and it’s not tangible. I’ll stick with physical gold and silver because “if you don’t hold it, you don’t own it”.

  11. I’m surprised that they did not consider a plastic money alternative, like colored poker chips.  Those are VERY cheap to make… and worth every cent.

  12. Perhaps the future currency being planned out is time itself, such as depicted in the movie “In Time”:
     
    “In the year 2169, genetic alteration has allowed humanity to stop aging at 25. “Living time”, which can be transferred among individuals on body contact, is shown by a clock implanted in people’s forearms. “Living time” has also replaced the world currency systems, allowing individuals to buy services with their “Living time”; When this clock reaches zero, one dies instantly…”

  13. All We really need is for each of Us to carry around a little bag of Fairy Dust and whenever we need to we just take out a pinch and sprinkle it on the counter to make up the difference. Works for the Fed!!

  14. Guys, this is a joke article a la those posted on “The Onion” website.  No basis in fact.  Please, please check it out.  This is too informative of a site to have this nonsense posted.

  15. Please note that Canada phasing out their penny beginning in Feb 2013 is in fact true.

  16. Those are the types of articles that encourage me on stacking more copper pennies and nickel nickels. Here in Canada, the penny will be removed from circulation on February 4 2013 but at least not the nickels! :)

  17. I have searched and searched for independent verification Tm Geithner’s 11/26/12 “quote” referenced above is, in fact, true.  I would much rather that Geithner be phased out at Treasury, but that apparently will not happen until January 20, 2017.  But even that could change.
     
    Anyway, does anyone have any objective basis for this claim other than a reference to a Skew News article?   And again, I respect the info provided on this site too much to let this drop.  I find it so hard to believe that Skew News is the only Internet source that heard Geithner’s statement.  Please, please, if any here has any other independent and verifiable source, let me know.

  18. I literally just re-checked the Skew News site for the original article and saw that there was a screen over the original article that stated “Update to this story Click Here”.  When I did so the author of the article, a Henry Wallen posted a retraction, admitting that the article was pure fiction and written for entertainment purposes only.  A link is provided here:

    http://www.sutori.com/phpbb/viewtopic.php?f=81&t=1719&p=2843#p2843

    I can only conclude that unless someone hacked the Skew News site and provided a link to the above while writing, as Henry Wallen, a retraction, that the story is fully bogus.
     

Speak Your Mind