Why is the penny still in use? This is a question many people have been debating for years. The small coin is practically worthless, and it even costs more to make than it is worth! Recently, the president of the US Money Reserve, Philip Diehl, weighed in on the subject with PR Newswire.
The biggest problem with the penny is it simply is not worth anything anymore, not even the time it takes for a person to bend over and pick it up. The time it would take to do so would have that person being paid less than minimum wage. However, the circulation of the penny still exists, why?
Some tout its necessity because if production were ceased then prices would increase and inflation would occur. This argument has seemed plausible for many of the past 25 years, but now with 75 percent of transactions taking place with a card rather than cash prices could remain stagnant. Diehl is even more optimistic and thinks that many companies would round down a penny or two to make their prices more competitive rather than rounding up and possibly losing market share.
Others say that if the penny needs to be taken out of circulation for costing too much, then the nickel should as well as it costs 9.4 cents to produce. However the nickel still has a chance to be made profitable as it could be made with cheaper materials whereas the penny is composed of nearly 100 percent zinc.
The main people who stand to profit from the production of the penny produce its blanks or serve on lobbies for the zinc industry. Other than for a select few the cessation of production would have no ill effects. It would actually save American taxpayers of $100 million in production costs each year.
The US Money Reserve is the largest distributor of gold, platinum, and silver coins issued by the federal government. It was started by gold market experts who sought to provide excellent customer service to those interested in investing in precious metals. These precious metals serve as a hedge against inflation and geopolitical events which can threaten the value of paper currency worldwide.