Some Canadian banks rationing pennies

[1945v]

I have been to three banks since the Canadian government announced this is the last year the penny will be minted and I was limited to 20 rolls per trip.
I never had this limitation before and in the past I remember seeing stacks of penny boxes in the vault.
The tellers told me many people were asking for rolls of pennies and they could not keep up with demand.

[Morsecode]

Sorry to hear that, but it does seem inevitable given the announcement.

I wonder how this will affect commerce in the short term. If the cent supply dries up faster than planned will all Canadian cents, moderns too, command a premium?

Back in '81 or so, there was a penny shortage here (in CT, anyway), and for a brief time banks were offering 2 cents per cent to get people to clean out their sock drawers and jelly jars.

Makes me wonder if I shouldn't be setting some percentage of zincs aside as a speculative hedge.

[knibloe]

I won't be turning in any canadian cents that I find. Copper, zinc, steel or otherwise.

[ZenOps]

Yup, my local branch seems to be limit of one box every other day.

[adagirl]

Sorry to hear that, but it does seem inevitable given the announcement.

I wonder how this will affect commerce in the short term. If the cent supply dries up faster than planned will all Canadian cents, moderns too, command a premium?

Back in '81 or so, there was a penny shortage here (in CT, anyway), and for a brief time banks were offering 2 cents per cent to get people to clean out their sock drawers and jelly jars.

Makes me wonder if I shouldn't be setting some percentage of zincs aside as a speculative hedge.

Interesting thought. I have held on to all of zincs to date.

[jacer333]

So? Take them to your car, walk back in for another, separate "trip" and demand more!

[Engineer]

There will be quite a few people who try to stock up to take advantage of a rush, but I'd expect any premiums to fall off quickly if they develop at all. Eventually a lot of people will just turn their pennies back in to the banks, but you could keep a steady supply of coins coming in by running ads offering to pay slightly over face. In the meantime, enjoy selling your zinc and steel cents for a profit.

[PolishPunisher]

Some banks in the United States were paying 60 cents per penny roll in the late 1990's when the economy was hot in the U.S. and pennies couldn't be minted fast enough.

[1945v]

I have stepped up my copper hoarding efforts, given the Canadian government will be actively removing pennies from circulation in late 2012.
I would not be surprised if the US followed suit in a year or two and also stop minting pennies.

The penny removal campaign in Canada was not done to save money (only a meager 11 million dollars a year is saved), but rather to serve as a distraction from other more serious
things that were done in the federal budget. They raised the mandatory retirement age from 65 to 67 (forcing people to work longer for less retirement benefits), but most people were focused on the removal of the penny from circulation, a rather trivial issue (except to us Realcenters )

[dpwozney]

The penny removal campaign in Canada was not done to save money (only a meager 11 million dollars a year is saved), but rather to serve as a distraction from other more serious things that were done in the federal budget. They raised the mandatory retirement age from 65 to 67 (forcing people to work longer for less retirement benefits), but most people were focused on the removal of the penny from circulation, a rather trivial issue (except to us Realcenters )

With the penny still currently being made, in mass circulation and available at banks, the dollar can’t be devalued much more.

Now, when the penny is no longer made, no longer in mass circulation, and no longer available at banks, the dollar can be devalued much more.

With no penny, and with the cost of making the nickel currently about 2.5 cents, the dollar can be devalued to about half it’s present value, before the nickel costs the RCM money to mint.

Right now, with the penny still currently being made, in mass circulation and available at banks, if the dollar was devalued a lot, there would be a run on 98% copper pennies and even 98.4% zinc pennies. About half the pennies minted after 1999 are not magnetic and therefore are not 94% steel and most likely are 98.4% zinc.

Also, if the dollar was devalued a lot and the penny was still to be made, the cost of making even the 94% steel penny would be many, many cents, and too many cents for the RCM.

With at least 25 billion pennies in circulation, at least 250 million dollars worth of pennies, in face value, is being removed to save about $11 million per year.