Benjamin Franklin once observed that "a penny saved is a penny earned," however, in recent times, a penny saved is almost two pennies earned. Pennies made prior to 1982 contain 95% copper. Pennies made after 1982 only contain 5% copper. Therefore, at today's copper prices, a pre-82 penny is actually worth $.019. Rounded up, that's $.02. See Coinflation.com for more information.
Many people save pre-82 pennies because they see the value of copper rising in the future due to inflation and demand for the metal. These people are often referred to as "penny-hoarders". I would refer to them also as "wise"- how often when investing can you purchase your investment at half of its' value? It is literally instant profit- once the copper is melted down- which we will discuss shortly.
If you decide that saving pennies is a good idea, you can start by just sorting through the pennies you receive as change every day. Identify the pre-82 pennies before you even put them in your pocket, and store them in a different pocket. Pretty soon, it will become habit. At some point in the future, you may find yourself willing to expend a certain amount to expand you penny-saving program. Ryedale Coins makes a line of machines that will seperate up to 300 pennies per minute. Here is a video showing it in action.
At this point, it is important to note that the US Federal Government, as of December 2006, has made illegal the melting or exportation of pennies and nickels. If you melt or export too many coins, you will be labelled a criminal and fined up to $10,000 or imprisoned for up to 5 years. In the ruling, Director Ed Moy states that "We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers." It seems Mr. Moy has failed to note that the production of these coins has already come at enormous cost to the taxpayer, as it costs more to manufacture and ship the coins than the coins are notionally worth- see page 18 of the 2007 Annual Report from the US Mint.
The illegality of melting copper and nickel coins is questionable. Some would say that the coins belong to the US Federal Government, and it certainly bears their image. Jesus even told them to "render to Caeser that which is Caeser's". There are a few points to consider. If any producer of a good or service sells that product for less than it is worth, thereby losing money, it is their responsibility to suffer the loss. The US Mint had no restriction on melting copper pennies until 2006, when it became evident that copper prices would be high and stay high. Furthermore, when a person earns wages for their output, it is their money to spend. They have traded a product of value for like value. Formerly, they possessed the product, now they have exchanged it for coinage. The Federal Government's only role in the transaction is to "coin money and regulate the value thereof".
If the Federal Government loses their shirt in coining money, that is their loss to bear. Perhaps they should regulate the value of the pre-82 penny upward to stem the tide of coin meltings. Or realize that no one can regulate the value of anything- value is relative to the parties involved in a transaction. Either way, each individual should be aware of the consequences of their decisions and be willing to bear those consequences, whether they be fair or not.
Let us examine two more possibilities: 1) the US Mint could lift the melting and exportation restrictions, or even retire the penny and 2) your economic survival could depend on your ability to save pennies and melt them down. In the first scenario, my advice would be to melt the coins when the ban is lifted, in the expectation that it would be imposed again. Then, you may claim that no laws have been broken. In the second case, you must define what your conscience allows. As we move closer to more government oversight and regulation, each person will find themselves choosing between what is legal and what is illegal to survive. Note that metal scrap laws have been enacted in many states, requiring photo ID and a vehicle, and creating incentives for scrap dealers not to accept metals, such as requiring them to hold metals for weeks, risking that the businesses will lose money if their scrap purchases go down in value over that time.
In closing, note the words of Samuel Johnson, "Do not discourage your children from hoarding, if they have a taste to it; whoever lays up his penny rather than part with it for a cake, at least is not the slave of gross appetite; and shows besides a preference always to be esteemed, of the future." It is wise always to ponder on the future, and lay up now for future needs then. It may make you wealthy, and it may help you survive.
Many people save pre-82 pennies because they see the value of copper rising in the future due to inflation and demand for the metal. These people are often referred to as "penny-hoarders". I would refer to them also as "wise"- how often when investing can you purchase your investment at half of its' value? It is literally instant profit- once the copper is melted down- which we will discuss shortly.
If you decide that saving pennies is a good idea, you can start by just sorting through the pennies you receive as change every day. Identify the pre-82 pennies before you even put them in your pocket, and store them in a different pocket. Pretty soon, it will become habit. At some point in the future, you may find yourself willing to expend a certain amount to expand you penny-saving program. Ryedale Coins makes a line of machines that will seperate up to 300 pennies per minute. Here is a video showing it in action.
At this point, it is important to note that the US Federal Government, as of December 2006, has made illegal the melting or exportation of pennies and nickels. If you melt or export too many coins, you will be labelled a criminal and fined up to $10,000 or imprisoned for up to 5 years. In the ruling, Director Ed Moy states that "We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers." It seems Mr. Moy has failed to note that the production of these coins has already come at enormous cost to the taxpayer, as it costs more to manufacture and ship the coins than the coins are notionally worth- see page 18 of the 2007 Annual Report from the US Mint.
The illegality of melting copper and nickel coins is questionable. Some would say that the coins belong to the US Federal Government, and it certainly bears their image. Jesus even told them to "render to Caeser that which is Caeser's". There are a few points to consider. If any producer of a good or service sells that product for less than it is worth, thereby losing money, it is their responsibility to suffer the loss. The US Mint had no restriction on melting copper pennies until 2006, when it became evident that copper prices would be high and stay high. Furthermore, when a person earns wages for their output, it is their money to spend. They have traded a product of value for like value. Formerly, they possessed the product, now they have exchanged it for coinage. The Federal Government's only role in the transaction is to "coin money and regulate the value thereof".
If the Federal Government loses their shirt in coining money, that is their loss to bear. Perhaps they should regulate the value of the pre-82 penny upward to stem the tide of coin meltings. Or realize that no one can regulate the value of anything- value is relative to the parties involved in a transaction. Either way, each individual should be aware of the consequences of their decisions and be willing to bear those consequences, whether they be fair or not.
Let us examine two more possibilities: 1) the US Mint could lift the melting and exportation restrictions, or even retire the penny and 2) your economic survival could depend on your ability to save pennies and melt them down. In the first scenario, my advice would be to melt the coins when the ban is lifted, in the expectation that it would be imposed again. Then, you may claim that no laws have been broken. In the second case, you must define what your conscience allows. As we move closer to more government oversight and regulation, each person will find themselves choosing between what is legal and what is illegal to survive. Note that metal scrap laws have been enacted in many states, requiring photo ID and a vehicle, and creating incentives for scrap dealers not to accept metals, such as requiring them to hold metals for weeks, risking that the businesses will lose money if their scrap purchases go down in value over that time.
In closing, note the words of Samuel Johnson, "Do not discourage your children from hoarding, if they have a taste to it; whoever lays up his penny rather than part with it for a cake, at least is not the slave of gross appetite; and shows besides a preference always to be esteemed, of the future." It is wise always to ponder on the future, and lay up now for future needs then. It may make you wealthy, and it may help you survive.
