We talk about money often on Weakonomics, mainly because it’s a finance blog. But we never really talk about our money, as in the crap in your pockets and floorboard of your car. Only in the last few hundred years has paper currency been in use, before then we were all about coins for thousands of years. It sounds like a joke that we still use metal currency, but we do. So here are a couple of stories about our change that have been in the news lately.
Accident on I95 Donates $187k to Florida, Feds Take it Back
Remember my haiku? Looks like you’ve got a chance to get your nickel back. Well not really. A truck overturned on I95, spilling $187,000 worth of nickels on the highway. Sounds like fun, except for those involved. The funny thing I learned out of this adventure was the role of the Secret Service. We all know about the business suits, sunglasses, and earpieces of the guys that guard the president and other important people. What I didn’t know is they are basically the US Mint police. They investigate fraudulent and counterfeit currency, and of course guard money as it’s being shipped. Thusly, anyone trying to walk home with a pile of nickels from this accident, had to deal with the Secret Service. No thanks, I’ll find my retirement some other way. Since the Secret Service protects our money, you think they can keep Paulson from doing stupid things with it? Oh wait, they only protect REAL money, Paulson is playing with fake money.
New Penny Honors Lincoln, Literally Not Worth It
This has happened a few times in the past, currency being minted costs more to make than it’s worth. In World War II there was a shortage of copper and pennies were made with steel instead. My mom has some of these. In 2009, we’ll celebrate Abraham Lincoln’s 200th birthday with a new penny (was a memorial in Washington not enough?). What I’ll celebrate instead is the stupidity of continuing to mint pennies. A penny is worth 1 cent, or $0.01. Because copper and zinc are much more expensive these days, it costs 1.4 cents, or $0.014 to make a penny. We’ve burned away millions of dollars manufacturing a coin most of us won’t even pick up with we drop. It costs much less per unit to make a dollar because it’s made of dead trees. The coin is fast dying, and those of us that support the Gold Standard (not me) will not like the fact that our currency is no longer manufactured from anything of value. Money used to be gold and silver, then it was brass and copper, now it’s paper and plastic. I wonder if I can make a profitable business out of trading cash for new pennies and then selling them to a smith to melt down? CashforGold.com?
US Mint Betrays Washington Dollar, Pushes Dead Presidents Coin
The US Mint is launching an advertising campaign in select cities to push dollar coins. The argument is that the coins are more environmentally friendly. Really? Let’s say the Mint needs to make $50 million in new dollars this year (I’m sure it’s much more). While using the coin saves paper, there are also side effects. Is it more environmentally friendly to cut down a tree and process it into paper or to mine the metal and process it into bricks for shipping? When I think of mining, I think of huge diesel powered machines, when I think of tree harvesting, I see a couple of guys with chainsaws. I don’t know which is more friendly, but the image of mining seems much less friendly. Then there’s the shipping. Which weighs more? A paper dollar or dollar coin? Those heavy coins have to be shipped, and that uses a lot of gas to ship the same value of money. Green lovin’ blog: Treehugger offers some additional details on how the coin might be greener. Since the coin has an average life of 30 years vs 18 months for a dollar, less would need to be made. Also the coin can be recycled, whereas Congressional mandate requires most of the dollar to be shredded and disposed of. Treehugger would like to see a step-by-step break-down of how economical the coin is vs to dollar, but because the minting and printing process must be kept secret, we just get to take their word for it. Yay.
One final note: If the US Mint really wants to push us to the coin, why don’t they stop making the paper dollar? That would be a quick and easy way to get us on the coin. If you give the people options, they stick with what they know. In this case, it’s all about the Washingtons, screw those other dead presidents (I’m looking at you Van Buren).
Bonus: You can buy a roll of these dollar coins from the mint for $36. The catch? You only get 25.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
