The fifth World Money Fair to be held in Berlin is now history and I am on my way back to the United States. There are many things on my mind as I try to digest what I have experienced over the past week.
A conversation I had with a blank supplier was most interesting. We were talking about the most recent news that it cost 1.61 cents to make a U.S. cent and a bit over 6 cents to make a nickel in fiscal year 2009.
What were the U.S. Mint's options, I asked?
Bottom line, the reply came, was the Mint probably just has to live with it.
The only cheaper alternative was some sort of coated steel planchet, copper coating for the cent and nickel coating for the nickel. These would be cheaper, but in the case of the cent, it would still cost more to strike the cent than face value. However, even to make this change, the Mint would be taking on a future problem. Apparently, when coins of this composition need to be retired, there is no easy way to dispose of them. Metal recyclers do not like coated steel blanks. It is just not commercially feasible to do it. That makes the coins little more than trash for a landfill and that is not the most environmentally sound thing to do. This hasn't stopped countries from using this type of blank, though.
The supplier recounted a story where one place used retired unrecycled coated steel coins as footings in a small construction project to get rid of them. That is not something that could be done in the United States on a large scale or perhaps any scale at all, so why create the problem in the first place?
So the problem of what to do with the cent and the nickel will probably persist for years.
"You can't very well drop the cent, now can you?" I was asked rhetorically. "If you do that, you might as well go and add a zero to the currency."
With all of the inflation fears out there, even a hint of such an outcome would be enough to prevent any boat-rocking actions with the cent.