Persuasive essay request for lifting melt ban

[Market Harmony]

If you are interested in lifting the melt ban, then think of what it will take to do it. Bring out the facts. Use numbers. Use common sense and draw conclusions that are practical and achievable.

If you want to post them here, then that is fine. If you want to PM me, that works too. I'd like to consolidate the group-think and create a letter to the Treasury and Congress in regards to lifting the melt ban, and when and why it should be done. Please contribute.

[68Camaro]

Who do you perceive the audience to be? If I was going to try one it would be as a very brief (<1 page) summary, with appendices containing any detail. The most important factoids would be a bit difficult to get as actual facts, which would be:

a) the total number of cents in circulation
b) an accurate estimate of those which are copper
c) the total number of cents needed to supply the banks without shortage
d) future plans of the Mint with regard to continuation of the cent, period

Bottom line of the decision tree is that:

1) as long as zincs cost more to make than they are worth, and
2) as long as neither the Fed nor MINT plan to do a copper recovery program to partially justify withdrawal of the ban, and
3) as long as the cent is planned to remain in active supported circulation with new minting

Then allowing copper cent melting will cause an unncessary accelerated expense to the Mint. They will have no motivation to withdraw the ban.

So frankly, any argument towards this needs to focus on cancelling the cent. Leave the melt ban lifting to a later future argument. Once you create the argument for eliminating the cent, and get support for it, and stop minting new cents, then the argument for allowing melting of Cu cents is straight-forward. WIthout that, there isn't a great argument, and the second best argument - a copper recovery program - would no doubt delay lifting of the ban while the Fed did the bulk of the recovery and melting.

Just my 2 cents....

[inflationhawk]

The melt ban on silver quarters, dimes and halves was lifted in 1969 while they were still being used in circulation. It might be beneficial to do some research on the path taken to lift the silver melting ban in 1969. I don't believe elimination of the penny has to occur before the melt ban necessarily, however I am fully supportive of eliminating the penny altogether regardless of the melt ban status.

[68Camaro]

The melt ban on silver quarters, dimes and halves was lifted in 1969 while they were still being used in circulation. It might be beneficial to do some research on the path taken to lift the silver melting ban in 1969. I don't believe elimination of the penny has to occur before the melt ban necessarily, however I am fully supportive of eliminating the penny altogether regardless of the melt ban status.

Of course not, but It comes down to the cost of replacement. Replacement cost of a new cent is much more than face even with a cheap alloy. Replacement cost of higher priced coins is far less than face, especially when the alloy is low in cost. By 1969 the silver content in the fractional coins had dropped back to 1.3x face after peaking in 67 (and it continued to drop for several more years). People had gotten used to clad, and hoarding had stopped. It was not cost-effective to melt them when you could buy pure silver for a little more. It made sense to lift the ban then, as it would not cause the Mint any hardship.

[Lemon Thrower]

the govt wont' lift the melt ban until it eliminates the penny. it won't eliminate the penny until inflation is so recognized they have nothing to lose by doing so. that is still several weeks off at least.

[barrytrot]

I think Lemon is probably correct unfortunately. Although I hold out hope for "steel based" coinage within the next year or so.

If that happens they could lift the ban without as much pain.

I hope: some time during 2012 they steel-ize coinage
Then in 2015 they lift the melt ban on the cent.
In 2020 they lift it on the nickel.

That's my hope.

[inflationhawk]

Well, we've had 28 years of creating supply of non copper pennies. There was only 5 years of new supply build up of clad dimes, quarters and halves. Considering the current copper penny percentages throughout the country, I do not see a penny shortage occuring with legalized melting. And if there was, that would accelerate the elimination of the penny altogether. I believe the lifting of the melt ban would be more likely to occur before the elimination of the penny altogether. There is more recent precedent for allowing the melting of currency in circulation than the elimination of a denomination altogether (ala the half penny for example).

[SoFa]

What if they did something similar to Cananda with it's nickels? They changed the composition and the gov't started pulling the 99.9% coins. I don't think they banned the public from melting them either.

The amount of copper the US Mint could recover would probably pay for the new steel cents.

[68Camaro]

Well, we've had 28 years of creating supply of non copper pennies. There was only 5 years of new supply build up of clad dimes, quarters and halves. Considering the current copper penny percentages throughout the country, I do not see a penny shortage occuring with legalized melting. And if there was, that would accelerate the elimination of the penny altogether. I believe the lifting of the melt ban would be more likely to occur before the elimination of the penny altogether. There is more recent precedent for allowing the melting of currency in circulation than the elimination of a denomination altogether (ala the half penny for example).

The Cu cent co-circulated with the Zn cent for 20+ years without need for a melt ban, because the price of Cu made melting not attractive. It was only a few years ago when Cu went up, and people started to hoard, export, and melt, that they put the ban in place. If the ban was lifted now the Cu cent wouldn't survive a year before it was driven down to <1% yield.

[ed_vantage17]

...If the ban was lifted now the Cu cent wouldn't survive a year before it was driven down to <1% yield.

I agree with this. I am sorter/seller I actually hope the ban stays in place for quite a few more (at least 5) years. Once it is lifted the big dogs will swoop in and the copper well will quickly dry up. As long as the ban is in place the little guys can still make a few fiat by selling to speculators. What I've got saved as part of my portfolio is for retirement and that's 30 years off. No rush guys.

[SoFa]

My hoard is only 1/3 of the way to my goal. I hope the ban stays for a little longer too. At least until the price of copper gets higher.

[tinhorn]

I am a sorter/seller. I actually hope the ban stays in place for quite a few more (at least 5) years. Once it is lifted the big dogs will swoop in and the copper well will quickly dry up. As long as the ban is in place the little guys can still make a few fiat by selling to speculators....No rush guys.

Yup, this is exactly what I predict.

[Economist]

I'm with Ed, Sofa, and Tinhorn. Lifting the ban now would kill the small time hoarders/ sorters in short order. And, in my opinion, it would lead to penny shortages. Let's face it: if the ban were lifted tomorrow, we'd all be at the ATM first thing, draining FRNs, and spending the rest of the day filling up our cars & pickups with fresh unsorted cents.

[Rodebaugh]

I'm with Ed, Sofa, and Tinhorn. Lifting the ban now would kill the small time hoarders/ sorters in short order. And, in my opinion, it would lead to penny shortages. Let's face it: if the ban were lifted tomorrow, we'd all be at the ATM first thing, draining FRNs, and spending the rest of the day filling up our cars & pickups with fresh unsorted cents.

Yep, I would take the day off to, literally, back up the truck.

[HoardCopperByTheTon]

I'm with Ed, Sofa, and Tinhorn. Lifting the ban now would kill the small time hoarders/ sorters in short order. And, in my opinion, it would lead to penny shortages. Let's face it: if the ban were lifted tomorrow, we'd all be at the ATM first thing, draining FRNs, and spending the rest of the day filling up our cars & pickups with fresh unsorted cents.

You mean you guys don't already do that every day? Why wait for the sky to fall? The end is near!

I am against lifting the melt ban also.. I don't have nearly enough copper hoarded. Once the ban is lifted it will be end of game.

[warthog]

I'm with Ed, Sofa, and Tinhorn. Lifting the ban now would kill the small time hoarders/ sorters in short order. And, in my opinion, it would lead to penny shortages. Let's face it: if the ban were lifted tomorrow, we'd all be at the ATM first thing, draining FRNs, and spending the rest of the day filling up our cars & pickups with fresh unsorted cents.

You mean you guys don't already do that every day? Why wait for the sky to fall? The end is near!

I am against lifting the melt ban also.. I don't have nearly enough copper hoarded. Once the ban is lifted it will be end of game.

Iv'e only really just started a couple of months ago and hand sort.. I need the time too!!!

[TwoAndAHalfCents]

With the melt value of nickels currently about five cents, lifting the melt ban will cause the nickels to disappear. Unlike pennies, we don't have a cheaper metal coin already diluting the pool of circulating nickels.

[TXBullion]

I like your idea MH , that's thinking big and I like people that think big. Even if the letter was not filled with sound logic, I think it is still worth a try.

I hope to be able to get more copper as well before the ban is off

[68Camaro]

New story on ending the cent

http://www.politico.com/news/stories/0811/61442.html

[inflationhawk]

Nice article...maybe eliminate the paper dollar along with the penny and then put Lincoln on a new 2 dollar coin. That would shake things up! And save a lot of money.

[didou]

It only need to benefit someone who has contact with the government and finance their campaign.
They will invent any illogical excuse then to get rid of it and feed it to the mass and voila. Doesn't need to have common sense, be practical or logical.
I believe that what's happening in Canada, you should see how media talk about it. The argument they use don't make sense at all.

I don't think a logical letter to your elected official will do any good. Politician don't do well in common sense for most people but more in what can benefit them. Politics today are nothing more than making the mass believe this is for their own good while stealing them.

I'm against it for now, and i don't think it will happen in the U.S. unless a major company in making coin machine push for it.

If you need it done, i think it's better to ask who benefit from having the penny right now, who the big player who make money because of it or will loose money if it disappear. I'm thinking bank, mint, armory car, coin machine maker maybe mining company who all charge fee for this (mainly) useless token. Some of these may make profit from the fee they charge for business account or may loose money in it. If it truly benefit one of them, the penny could be still active long after it don't make sense for everyone else. They are the one who are in reality in power here and can make this happen in a reasonable time frame and without too much complication.

That being said, it think inflation will get rid of it faster than all this. The government currently in power NEED to devalue the money faster than the exponentially growing debt to keep thing running, only way for them to pay the debt is to devalue the money. Inflation reduce the value of all fiat money, including debt. The penny don't stand a chance face to that.

What if they did something similar to Cananda with it's nickels? They changed the composition and the gov't started pulling the 99.9% coins. I don't think they banned the public from melting them either.

It's still illegal to melt them in Canada.

[John_doe]

I know this is slightly off topic, but if the melt ban is lifted will international sales become legal? Or be made easier than the current methods of international sales.

[PolishPunisher]

I think we should push for all pennies to be re-based to 5 cents. This would allow for the CuNi nickel to be retired and limit the minting new zinc nickels for some times and provide a one-time $6 Billion "stimulus" for us! (people who hoard pennies). Additionally, I think this plans weakens the charity and impact on the poor arguments against removal of the penny as they would benefit from a 5 cent penny. Once all pennies are worth 5 cents there is no need to limit the melting of nickels as the supply of new nickels will be very large.

[inflationhawk]

Re-purposing the penny as five cents when it states directly on the penny "one cent"? I think that would be challenging. I like the concept, but don't think it could ever be executed and agreed to by Congress.

[PolishPunisher]

The way our Congress is working these days, I think the possibilities are wide open.