Tuesday, March 20, 2018

Should the US Mint Retire the Penny and the Nickel?

The Wall Street Journal has a feature out discussing the merits of the retirement of the penny and the nickel.

One part of the feature includes an essay by Henry Arraon, Senior Fellow in the Economic Studies Program at the Brookings Institution. He believes the coins should be retired.

He writes:
Pennies and nickels are a nuisance. They cost more to mint than they are worth, thus wasting labor, capital and otherwise perfectly useful metals—zinc, copper and nickel. No U.S. coin has ever been as worthless as today’s penny or nickel. Until 1950, the penny had a purchasing power greater than today’s dime. Until 1974, the nickel had purchasing power greater than the quarter does today.
This got me to thinking, the problem isn't the coins themselves but Federal Reserve money inflating policy that is destroying the value of these coins.

What I would like to see instead of the retirement of the penny and the nickel is for the Fed to stop printing money so that over time as productivity expands in the country the coins become of important value once again.

In fact, I am quite certain, given the productivity gains ahead if regulations don't mess it up, if the Fed stopped printing money, you might at some point be able to buy a good meal or even a decent suit with a nickel.

In other words, the penny and nickel are a nuisance now because of Fed policy destroying the value of the dollar.

Wouldn't it be great if the Fed adopted a policy of "strength for the nickel and penny" by halting their money manipulations?

This would be a great lift for the average citizen versus the banksters who profit from the Fed money manipulations

-Robert Wenzel 


  1. Yes since 1913 the dollar has lost 99% of its purchasing power. If only someone would invent a new type of money that was limited in quantity, had low fees, could be used globally and held its purchasing power...

  2. A nickel is worth more than a dollar bill.

    A nickel is made up of an alloy that is 75% nickel and 25% copper. The dollar bill is 75% cotton 25% linen.

  3. Isn't the US dollar backed by nickel.. or copper.. or zinc or somesuch? I'm waiting for the proposal to switch over to plastic pennies.

  4. On the other hand, if they're producing pennies and nickels, maybe they have less money for bombs.

    1. Actually less raw materials for bombs, tanks etc.

      1942-45 the nickle content was changed to have 40% silver because the military industry needed the copper and nickel to "save the world" It is known as the "war nickel"