FRIEZE NEW YORK 2013
INTERNATIONAL HOME + HOUSEWARES SHOW 2013
TOKYO DESIGN WEEK 2012
BEIJING DESIGN WEEK 2012
It makes such little cents
You probably know that the U.S. penny used to be made out of copper, which was once inexpensive. As the cost of copper began to rise, it would have cost more per penny than the penny's own value, so the U.S. Mint switched over to a zinc alloy.
But the price of zinc has been steadily rising since 2005. Which is why U.S. currency is in the absurd situation it is now: A one-cent piece costs about 2.4 cents to make. A penny is 97.5% zinc and 2.5% copper, and that zinc ain't cheap.
The nickel's got it even worse. This five-cent coin costs 11.2 cents to manufacture. That's because 75% of it is zinc and 25% is, well, nickel, another expensive metal. Which means that a nickel costs more to produce than every U.S. bill from a one-dollar bill (5.2 cents) all the way up to a C-note (7.7 cents).
The money math starts to make a little more sense when we get to the smaller dime (92% copper, 8% nickel), which rings in at a production cost of 5.7 cents. The quarter, which has the same ingredients as the dime, is only a slighly better bargain at 11.1 cents.
Clearly the U.S. Mint needs to start researching cheaper alloys or phasing out the penny and the nickel. It's true that the math is a little more complicated than it would be for pure product manufacturing; for example, while you'd quickly go broke selling a product for $100 that cost $240 to make, currency is a little trickier. The government has an obligation to produce and circulate currency because it enables commerce, so it's okay if they lose a little in manufacturing costs, as its citizens will theoretically make it back up by creating wealth. But if we don't do that fuzzy math and look at it in terms of straight production, in 2012 alone the U.S. government lost $58 million dollars just by making pennies.
I have two brilliant ideas concerning the future of money production:
1.) Let's make pennies and nickels smaller, so that they use less materials and cost less. In fact let's make them tiny, like smaller than an Advil. Sure, we'll constantly lose them, accidentally eat them when they fall into a salad, and need to use tweezers at vending machines et cetera, but it will be funny.
2.) It would be awesome if currency was made out of some magic material that could grow and shrink in proportion to its fluctuating value. I'd love to go to a country where the dollar was strong, and the U.S. bills I'd brought would physically grow huge, like the size of menus. Conversely it would shrink down to matchbook size in countries where the dollar was weak.
I guess those are terrible ideas, but it would certainly make wallet design more interesting.
Seriously though, if they're going to insist on keeping the penny and nickel and using the same metals at the same overall size, couldn't we switch over to a donut design? If we kept the outer perimeter the same but removed material from the center, we could cut down on the metals cost. Of course we'd have to lose the portraits, but I think Abe Lincoln would be down to take a powder if he knew it'd save us $58 mil a year.
Someone, please Photoshop what a donut penny and nickel oughta look like.
Comments
This is also an action of a fractional reserve system not based off a gold standard. Once you print endlessly the value of your currency drops compared to the metals market in which it use to be tied.
This is a just one of the signs of a poor financial house. Th bubble is always biggest before it pops. Note last weeks all time highs of the stockmarket.
The outer ring could be the five cent coin, and the "hole" could be the ten cent piece. Two for one.
You could keep the donut design on the current penny and call it the "Our American Cousin" edition.
It's why we stop producing the penny in Canada
Unfortunately, the weight of each coin can't be changed any more easily than size. Vending machines, toll booths, etc. can rely on size, weight, or both to determine the amount of money being taken in, whether or not the coins are fraudulent, and so forth. Machines that only rely on one metric can be tricked--dropping washers or game tokens of roughly the proper dimensions into an automatic toll booth, for example--but those that rely on both would need to be retooled. I think the best solution is to follow Canada's example, and simply give the penny the boot.
I vote for embedded chips in our bodies
AWD,
You dont't know what you are talking about. The DOW was not at an all time high. (Adjust for inflation). The DOW is a terrible measure for the economy (see the latest episode of planet money's podcast). We got of the gold standard and it helped us get out of the great depression. Gold value has plummeted, and is "the worst investment of 2013".
Now, for a solution, lets just stop making physical currency. Easier to track, impossible to cheat on taxes, ends the problem of undocumented workers being paid in cash and not paying income tax. You essentially end the grey market, except for bartering, which shouldn't and wont be taxed.
my suggestion is instead of using a circular cut out we could use the outline of the president for each coin respectively.
I got to thinking of this the second I read the article in Time last month. Here's my solution.
1. kill the penny
2. kill the paper dollar
3. Make the dollar coin out of copper and zinc to keep those industries happy.
4. Take a nap.
On a adjacent note, I was at a museum the other day looking at roman coins featuring a profile view of Caesar. It's crazy 2000 years later we still have the same traditional format.
I have a friend who is hoarding Nickels as an investment, hoping that he can sell them later for a good profit. Yeah, it's illegal to melt currency, but I'd like to know the process of catching people who melt down coins.
Matt,
I look at data not what I'm told. Here is just one example of the value of the dollar vs gold (metal).. http://pricedingold.com/us-dollar/
Notice everyone asking for gold and China and other major players buying it up like its better then the dollar, oh wait it is.
Best investment I have made was switching all my stocks to silver when it was at 8 dollars an ounce, its now at 30..I hope more people fall into believe paper and bits on a machine have value when you turn off the power.
Do you know what the fractional reserve system is.
To the whole idea, most machine use weight to determine which value is being used. Going digital is a great solution but what happens when the place you want to eat doesnt take cards or bitcon?
News flash AWD, nothing has value unless we all agree that a thing has value. Value is an attributed trait. Again, you don't know what you are talking about.
We could stop making the nickel and make the penny worth five cents.
Breaking News: Society from the Vedic to today has deemed the value to that metal!!
AWD, the only difference between now and than is that we all use to agree that gold was worth $24 an ounce. Now we agree that the value of the dollar can change based on how much of it there is.
Seems like others who love that gold prices are rising forget that it is only because we're off the gold standard. The minute we go back, all their gold will be worth $24 an ounce.
Who cares, keep making them. [penny - $0.024 - (.416) - 0.416cents]...[nickel - $0.112 - (.446) - 2.23cents]...[dime - $0.057 - (1.75) - 17.5cents]...[quarter - $0.0111 - (2.25) - 56.25cents]...[dollar - $0.052 - (19.23) - 1923cents]...[100 - $0.077 - (1298.7) - 12,987,000cents].....|||> 24,128,000 million pennies made for $58million. 1.85 100dollar bills need to be made to balance the loss. Not to mention coins last much longer than bills.
We could save 6 cents per nickel if we just converted it into a bill.
Or make it out of the same metal combo as pennies.
They should make penny's exactly the same but increase the value of the coin to 3 cents. Plus the cost of changing out every vending machine would drag down the economy. Especially if New Yorkers no longer can by big gulps. Vending machines will be in high demand!
Mobile money could be the answer, if the physical is made at short. Testing ground = start with a city.
AWD walks into the local sandwich shop, orders, and hands the cashier 4 grams of silver...
Does it cost more to make a penny than a $100 bill?
Remember NYTimes pulitzer prize winning Krugman?
He endorsed the answer to this problem weeks ago with the platinum trillion dollar coin (the idea was nixed).
Losing $58mil? Please. Less. Than. Chump. Change.
$Millions means nothing anymore to the govt. $Billions are fast going going out of style. Heck, the tax payers gave out something like $1.6 billion in free cell phones to its citizens and non-citizens in 2012 alone.
$58 million? We spend more on advertising for food stamps.
All the financial market transactions are done electronically these days, it means that the mayor part of money declared by companies and governments doesn't exists physically.
It's only a matter of time to represent all the money in the world in a digital way. And after reading this article it makes sense: inflation is part of our system, so governments needs to create more bills/coins, but as the population grows even the resources to create paper bills will become more expensive. "bits" doesn't suffer from this scale issues.
And that brings a lot of interesting topics to think about:
- How was the history of money related to the development of our societies?
- What happens if all the money goes digital? Do the people really need to be in physical contact with bills/coins to assign them value? Is that change going to bring more awareness on how abstract the concept of money is... and maybe changing our mind set about money in a way that changes our societies too?
Who knows... Interesting times ahead :)
"We could stop making the nickel and make the penny worth five cents."
And then those guys who are hoarding millions of [copper] pennies make a killing.
I say get rid of both the penny and the nickel and just round up or down. But let's get the facts right first. There is no zinc in a nickel. They are 75% copper and 25% nickel.