Canada Eliminates the Penny
The Canadian Penny is done for (Read more: Buy Canadian Pennies). The Royal Canadian Mint on March 29th, 2012 made a press release stating the penny costs too much to mint and will not longer be minted as a result:
“…the Royal Canadian Mint will no longer distribute pennies as of fall 2012… Due to rising labour, metal and other manufacturing and distribution costs, each penny now costs more than 1.6 cents to produce. As a result of the Mint’s patented, cost-effective multi-ply plated steel technology, all other Canadian circulation coins cost well under face value to produce.”
– exert from the press release.
United States Penny Eliminated Next
The really intriguing fact about this is the part that we have placed in bold above. A steel penny? Sound familiar in the U.S.? The United States is currently entertaining the idea of changing the metal composition of the penny (and the nickel) to steel. However, Canada has already done this and still takes a loss on the penny.
This doesn’t just suggest the end of the U.S. penny must be coming closer, it proves it. After all, That quote could easily be replaced with the economic conditions in the United States.
Canada’s Mint, called the Royal Canadian Mint, has an “Alloy Recover Program” that is designed to sort out high value coins in the same denomination and recover them for commodities use. For example, sorting Canadian copper pennies out of zinc and steel pennies. Keep your copper pennies! After all, they’re already proven to be worth more than face value. These acts are largely shown in the cost to make a penny.
Cost to Make the Penny
Notice it states the penny costs 1.6 cents in Canada. In the United States it costs 2.41 cents. That’s a huge difference in relation to the fact that 1.6 cents was enough of a loss for Canada to eliminate the penny. Here’s a chart showing the cost to make the penny followed by a second chart showing the production capital loss extrapolating the past ten years of minting the U.S. penny:
Is the U.S. penny on the chopping block to be eliminated next? Only time will tell when. But that’s the real factor here. No longer is the question if, but when. History repeats. Time and time again countries have and are eliminating the denomination equivalent of the penny.
Canadian Penny Melt Laws
Note that it is illegal to melt the Canadian penny:
“No person shall, except in accordance with a licence granted by the Minister, melt down, break up or use otherwise than as currency any coin that is current and legal tender in Canada.”
– exert from the Source
This is big news for copper penny investors. The penny being eliminated from Canada is very close to home in the United States. So close that it will have to raise enough attention from the general public that politicians may look even closer at eliminating the penny.
Do you invest in copper pennies? If so, great! Keep it up because your big pay day may be coming soon. If not, why? Did you know every U.S. copper penny is worth over 2.5x its face value because of its copper metal value? This is how much inflation and metal appreciation has effected our economy.