What should we expect regarding prices when/if pennies are no more?

[macrocoin]

So, with all the recent talk about getting rid of pennies as a denomination, I got to wondering what effect this would have on the market value of wheat cents. Today most of the common dates in G condition are worth about 3-5 cents each. Some earlier dates go for a bit more. Since they can still be easily obtained in circulation there are many folks (like me) that simply fish them out of big bags of change and horde them at face value.

 

Lets say the penny actually does go away....no more getting bags of them at the bank any longer...no more face value wheat cents...now what? Will this affect the demand? What would it do to the price?

 

I am guessing that the rare dates wouldnt change much if at all in value, but the common dates might see a bump, since they can now only be found via coin collectors / dealers.

 

Any other thoughts about this?

Is now the time to agressively horde wheats?

[MunkyMan95]

Even if they stop making the penny, I'm sure they would remain in circulation for years. And even if places stopped accepting them, not everyone would catch on immediately and the penny would continue for a while at least.

[michael]

up up aND AWAY

[Bruceswar]

I am not sure the price would be effected till many years down the road. Look how long it took for Morgans to take off. You would still get them for a dollar at banks up until the 1960's, which was 40 years after they were discontinued.

[Regis44]

QUOTE: "Today most of the common dates in G condition are worth about 3-5 cents each. "

 

If they do away with pennies, how could you pay for one that is worth 3 or 4 or 6 cents?

[WaxonWaxov]

I seem to recall all this "get rid of the penny" talk back in the early eighties.. before the switch to the zinc core in 82... I think the penny will be around a while.

[Brotherman]

QUOTE: "Today most of the common dates in G condition are worth about 3-5 cents each. "

 

If they do away with pennies, how could you pay for one that is worth 3 or 4 or 6 cents?

 

They say we will round up or down, but somehow I think we will be rounding up most of the time - like they do with gas prices. Who ever paid 9/10th of a cent at the pumps?

 

Hays

[Robbie-migration]

They should redesign the penny so that it is smaller, maybe the size of a dime. Or element the paper dollar and only produce a dollar coin, then the money the save can be used to produce the penny.

[MunkyMan95]

I think that we should just change the composition. Maybe aluminum... or make a nickel cent, just smaller.

[zrlevin]

Chad, nickel costs about eight times as much as zinc.

 

kitcometals.com

[Narmuriel]

They should redesign the penny so that it is smaller, maybe the size of a dime. Or element the paper dollar and only produce a dollar coin, then the money the save can be used to produce the penny.

 

It is dirt cheap to print up paper money. A recent book I just got finshed said that the cost of minting a paper money was approximently $230 for $100,000 face value $100 dollar bills. Then again, the middle of the book went all conspiracy theory in trying to link the assassination of J.F.K. to a threat he made to veto the coinage act and reinstitute a silver standard. They basically stated that the Fed had him assassinated. I'm not sure how much faith I would put into that book, but I am sure the number is close.

 

Anyway, I digress. The cost of working with metals is going to outweigh that of working with paper. It makes much more sense to get rid of a coin that is expensive to make compared to face value and has low useage..

 

I dont want to see the one cent piece go, but I think it might be time. Prices will never go down.

[Robbie-migration]

Below is information from the US Mint web page,

 

http://www.usmint.gov/mint_programs/golden_dollar_coin/index.cfm?flash=yes&action=sacFAQ

 

Not that I'm saying we should is the sac.

 

"The use of the Golden Dollar coin in lieu of the paper dollar would ultimately save money. The General Accounting Office’s (GAO) stated potential savings of up to $500 million in a report issued September 2002, which was calculated on the premise that the U.S.Government cease production of the paper one-dollar bill. However, the United States Dollar Coin Act of 1997, which authorizes the Golden Dollar, did not call for the elimination of the paper dollar. Consequently, dollar coins and dollar notes co-circulate in the marketplace. The United States Mint does not have the authority to change existing legislation thus, full cost savings cannot be realized."

 

Maybe in short term it's cheeper to produce paper currency, but taking into account the life span of paper vs coin, the coin would produce a larger savings over a greater period of time.

[Narmuriel]

"The use of the Golden Dollar coin in lieu of the paper dollar would ultimately save money."

 

I am wondering where that ultimately would come in. Yes, without a doubt the dollar coins have a much longer life than paper bills. But what is the cost of production of the coins? I really have no idea, but I am sure it is multiples higher than paper. I am sure the quote is a true statement, however, how long would it take for that savings to be realized? 5 years, 10 years, 25 years or longer? Government could care less about what happens anything past there term limits. While they are in office though, the will do what ever is cheapest THEN, which will remain the paper money.

 

I really wonder if the Fed isnt exerting some influence on the governments decision to keep producing paper money. A coin wouldnt have anything to do with the Fed, hence they would oppose it as an action that would lessen their power.

 

Good point though, Robbie.....Anyone got a clue what the production costs for the Sacagewea coin is?

[Brotherman]

Below is information from the US Mint web page,

 

http://www.usmint.gov/mint_programs/golden_dollar_coin/index.cfm?flash=yes&action=sacFAQ

 

Not that I'm saying we should is the sac.

 

"The use of the Golden Dollar coin in lieu of the paper dollar would ultimately save money. The General Accounting Office’s (GAO) stated potential savings of up to $500 million in a report issued September 2002, which was calculated on the premise that the U.S.Government cease production of the paper one-dollar bill. However, the United States Dollar Coin Act of 1997, which authorizes the Golden Dollar, did not call for the elimination of the paper dollar. Consequently, dollar coins and dollar notes co-circulate in the marketplace. The United States Mint does not have the authority to change existing legislation thus, full cost savings cannot be realized."

 

Maybe in short term it's cheeper to produce paper currency, but taking into account the life span of paper vs coin, the coin would produce a larger savings over a greater period of time.

 

True. I think I read somewhere that paper had an average lifespan of around

5 years while coins had an average lifespan of around 30 years.

 

I would like to see the removal of the cent, the dime, the one dollar, and five

dollar bills. The one dollar coin would actually be used then. I would also like

to see a five dollar coin back in service!

 

Hays

 

I edited this to say that while I can’t vouch for the bill’s lifespan - I can for the coin’s 30 year lifespan. I search circulated coins all the time and run across coins from the 60s and 70s frequently.

[zrlevin]

What's wrong with the dime, Hays?

[Brotherman]

What's wrong with the dime, Hays?

 

Nothing is wrong with it - I just don't think it is needed. Without it you can still make all combinations of change.

 

You know, I would also like to see a 10 dollar coin.

 

Hays

 

Why didn't all that quote and smiley guy stuff work?

[Brotherman]

I did a google search and found many places give a one dollar bill's lifespan of

only 18 MONTHS!!

 

I don't know the costs associated with coins or bills, BUT if a $1 bill only lasts

a year and a half then just for the costs to be equal coins would have to be

20 times more expensive to produce.

 

Hays

[Narmuriel]

Jeez! 18 months?!?!?! After seeing that, I looked at the bills in my wallet, all are at least 2003 or earlier. I really want to know production costs now.

[Robbie-migration]

It look like the production cost of a dollar coin is only twice (or to be exact 2.1 times greater) that of the paper dollar according to the testimony of James L. Blum, Deputy Director Congressional Budget Office.

 

http://www.cbo.gov/showdoc.cfm?index=5499&sequence=0

 

"The total cost of producing and processing coins and currency could be reduced by substituting dollar coins for dollar notes because the long-run annual cost of a coin is lower than the corresponding cost of a note. A dollar coin would cost about 8 cents to produce, which is more than twice the 3.8 cents that it costs to produce a dollar note. The higher initial cost of the coin is more than offset, however, by its significantly longer useful life (30 years versus 1.5 years). In addition, the costs to the government of maintaining the quality and integrity of coins are lower than they are for notes, which must be inspected individually for fitness and counterfeits. By contrast, coins can be checked by weight."

 

Read the rest of his testimony it is very interesting.

[Narmuriel]

Very good read. If the boneheads in Congress ever start thinking about the future, this could happen.

[Narmuriel]

Just really truly realized we were getting off subject. Should the one cent piece go the way of Betamax, and what will happen to prices? I would think the 1982 and prior market would heat up, while post 1982 would not see much of an increase at all (if any).

 

I really dont want to lose the cent piece, as it represents a lot of history over its lifetime. But there is no real use for it anymore. Inflation has driven up prices so much that anything less than 5 cents cant buy squat. I really dont think that the "penny" is going anywhere soon though, at least not until after 2009.

[Brotherman]

Very good read. If the boneheads in Congress ever start thinking about the future, this could happen.

 

I agree.

 

Hays

[Brotherman]

Just really truly realized we were getting off subject. Should the one cent piece go the way of Betamax, and what will happen to prices? I would think the 1982 and prior market would heat up, while post 1982 would not see much of an increase at all (if any).

 

I really dont want to lose the cent piece, as it represents a lot of history over its lifetime. But there is no real use for it anymore. Inflation has driven up prices so much that anything less than 5 cents cant buy squat. I really dont think that the "penny" is going anywhere soon though, at least not until after 2009.

 

I agree with all that too!

 

Hays

[pendragon1998]

Obviously we'll start rounding prices to the nickel, just like when they dropped the half cent, we started rounding them to the cent. Honestly, so what if you can only buy one cruddy wheat cent for a nickel? If people don't think they're worth 5 cents, they'll sell them 2 for a nickel or 3 for a dime or something. Anything for sale for under a nickel will be rounded up to a nickel, true - but when was the last time you made a 3 cent purchase? Honestly?

 

As for the rest of things, if we experience a 5 cent increase in the purchase price of everything what's the big deal? I travel a fair bit and on occasion I've bought the same healthy MacDonald's meal at two spots along the road in one day. I paid $0.35 more at one McD's than at the other for the exact same meal, due to county taxes and some sort of difference in franchise pricing. Even if everything went up in price 5 cents, and you went grocery shopping and bought 60 items, that's $3 more you pay on probably a $80-$100 ticket. And you'd probably not experience a 5 cent increase, as all those 99 cent items would either (a) bump up to $1 or (b) remain 99c and the final ticket would just round up or down. Pricing need not even change on any products - all the rounding could simply be done at the cash register on the final total to the nearest nickel. Many gas pumps already do this for at 9/10 cent - they round up to the nearest cent for certain totals and down for others.

 

I'd love to see the cent go away after the 2009 special reverses. Or switch to being an advertising medium to generate some money for the government that I don't have to pay. "Hey, brother, let me take a look at that new 2013 Microsoft Cent you've got. I'll trade you two 2012-D CocaCola cents for it."

[Narmuriel]

I'd love to see the cent go away after the 2009 special reverses. Or switch to being an advertising medium to generate some money for the government that I don't have to pay. "Hey, brother, let me take a look at that new 2013 Microsoft Cent you've got. I'll trade you two 2012-D CocaCola cents for it."

 

That is just wrong! I would not want to even touch commercialized money. The entire coin collecting hobby would be tarnished forever.

 

It is rather scary to think that this is possible.....

 

"This dollar bill is brought to you by Charmin."

"The Goldenseal dime: Think of us the next time you score a dime bag" OK, that was too much

[pendragon1998]

Well, I was just thinking of it for cents

[Robbie-migration]

I don't think the cent will disappear all together and if it does those who hoard pennies in jars at home will not be willing to give them up so easily. There will be so many newer dates being held on to that their value may even drop some, with the demand of copper dropping since the mint will no longer need copper, copper prices mostly likely will drop as well. Not to mention all the pennies in the banks that will be melt down and sold.

 

The more sought after pennies may increase in value as well as those pennies that have a low mintage.

 

There are too many people who are dependant on every cent they have to just let it disappear all together.

 

Unless they came up with a social program that would benefit the underclass, or low income families. The register can automatically round up to the nearest nickel and any overage paid to the store would be sent in as tax for social programs or have it put towards education.

 

The government could also create a country wide lottery held at the end of the year with a percentage of all the extra pennies charged at the registers be given out to the lottery winners. Anyone with a social security number and older then 18 would be eligable to win.

 

Or use the extra pennies to pay down the national debt, or save social security.

 

With the US population at 300 million.

lets say every citizen will pay an extra penny per week, this being a low estimation being children don't spend money at least not as frequently as adults.

 

300 million $ X .01 = 3 million dollars a week X 52 weeks = 156 million dollars a year.

[cladking]

I don't think the cent will disappear all together and if it does those who hoard pennies in jars at home will not be willing to give them up so easily. There will be so many newer dates being held on to that their value may even drop some, with the demand of copper dropping since the mint will no longer need copper, copper prices mostly likely will drop as well. Not to mention all the pennies in the banks that will be melt down and sold.

 

The more sought after pennies may increase in value as well as those pennies that have a low mintage.

 

There are too many people who are dependant on every cent they have to just let it disappear all together.

 

Unless they came up with a social program that would benefit the underclass, or low income families. The register can automatically round up to the nearest nickel and any overage paid to the store would be sent in as tax for social programs or have it put towards education.

 

The government could also create a country wide lottery held at the end of the year with a percentage of all the extra pennies charged at the registers be given out to the lottery winners. With anyone with a social security number and older then 18 would be eligable to win.

 

Or use the extra pennies to pay down the national dept, or save social security.

 

The penny is a drag on our economy and we are poorer everytime it trades hands. Trying to save social security by use of the penny is like trying to save the Titanic by spooning water INTO the boat.

 

The older Lincolns are widely collected and well studied. If the penny is eliminated there would be a lot of new attention focused on these old coins and many would increase in value. The more modern coins are underappreciated and not as widely collected. If the one cent coin is eliminated people would scramble to put together sets and find for the first time that the coins are simply not available. In the '80's you could go to a coin show and be assured there were three or four nice gem '09-S VDB cents in the room. There would be perhaps 100 1972 mint sets and if the odds were favorable one of these would contain a nice gem '72-D cent. Many of the people in the room collected the old penny and already had one at home. Few of the people collected the new coin and probably didn't even know what their '72-D looked like. Today little has really changed except that there are more people who appreciate the later coin. There might even be a slabbed specimen or two available at 2,000 times the price it would have cost in the '80's. There won't be more than a few mint sets anymore and those still around are often degraded (especially on the cents).

 

The later zincs are even worse in many regards. Try finding some nice clean 1983 coins with smooth surfaces!!! Many of the zincolns are stunning but others are tough. Even those nice get relatively small attention since they aren't '09-S VDB's. You can find '88-D cents that look like branch mint proofs but you don't see many who care enough to seek them out. They aren't dated '09-S VDB so why bother? There are still billions of '88-D cents in circulation so who cares about gems or uncs?

 

I believe you'll see attitudes change as this denomination disappears from people's lives. Suddenly being a magical dates will be more dependent on what is actually scarce rather than the current status quo.

[John Martinez]

Remember a SuperMan movie where Richard Pryor engineered the software to place all fractions of a cent in his account? Over the entire country, that is what we are talking about if we talk about rounding up. If it goes to the government, then H#** No. The government gets too much of MY money now. If it's going to go to social programs, like paying for more for Katrina's so called victims to get breasts enhancements and what not, then again, H#** No. Social programs get too much of MY money now.

 

If they want to do away with the cent, then GIVE MY MONEY BACK TO ME. I'm not heartless. I can do a better job of designating any monies given to charities than the government - which includes school as suggested above - can do AS A CHARITY.

 

I collect Lincoln's now for the hobby. So either way, it does not bother me if my collection increases in value or not. Might cost me more to finish the collection. It's not like I'm going to get rid of it. I plan on passing it down for generations. May not make it, but it is at least my intent.

 

I hope the Lincoln at least makes it to 2009, and that thought is given to it's design as well.

[cladking]

Rounding does not generate cost or savings. How much do we lose currently when we buy two of something at three for a dollar? Do we really need a .333333... cent coin? If we have it how do we make change from a half cent or a .141529c ?

 

The question is how much do we pay to have a transaction work out even. Right now to get transactions to work out to the cent we are paying two or three cents. This is a cost borne by the seller, buyer and the mint (taxpayer). But who is benefitting? No one can benefit except by selling the zinc or working to make or count these coins (whose salaries we all pay).

 

There can be no real profit from fine tuning transactions to such a fine degree yet we pay a heavy price. Take the savings from not minting these coins and put that into social security but there is no rounding error and the profit from not using cents accrues to all. Primarily irt accrues to the people who no longer have to stand in line behind somebody who counts out lots of pennies but it also goes to people who breath slightly cleaner air and use a slightly saner currency.