We all know that the metalic value of any coin must be lower than the face value of the coin itself, lest people starts melting coins for profit. In recent years, rising price of raw materials has lead to concern that it might really be profitable for people to melt their coins.
This week the cost of the metals in a penny rose above 0.8 cents, more than twice the value of last fall. Because the government spends at least another six-tenths of a cent — above and beyond the cost of the metal — to make each penny, it will lose nearly half a cent on each new one it mints.
Appearances aside, pennies no longer contain much copper. In the middle of 1982, after copper prices rose to record levels, the mint starting making pennies that consist mostly of zinc, with just a thin copper coating.
But these days, zinc is newly popular. Rising industrial demand and speculation have sent the price rocketing. Since the end of 2003, zinc prices have tripled.(The New York Times - April 22)
I guess I'll start hoarding all those annoying 1, 2, 5 cents coins that I cannot normally use.
Just came back from Amsterdam...will blog about the trip later :)