Bankrupting Canada 1 penny at a time?

[adamtheman]

I recently read that it costs our government $0.05 to manufacture a penny.

Couldn't a multi-billionaire go out and buy, say, 100 billion pennies (for a cost of $1 billion dollars), and just keep them all? I don't know how many pennies we have in circulation but I am sure 100 billion would make a dent. These would need to be replaced by our government to keep circulation levels up, and it would cost them $5 billion dollars to create $1 billion dollars worth of pennies. There would be no risk in this by the people purchasing the pennies, because it would still be legal currency, just would take up a lot of room.

Why anyone would want to do this, I don't know, but it is possible. I assume the same could be done in the United States with their penny, although there must be significantly more US pennies in circulation.

[adamtheman]

I just did some research online and found this:

"Current estimates by the U.S. Mint place the number of pennies in circulation at around 140 billion".

So I assume Canada probably only has, what, 20 billion pennies?

So for a mere $200 million dollars, one could own every single penny in Canada.

[mcheng7]

I assume it's labour included? I can't picture it cost 5 cents for the machine to mold the small piece of copper...

[adamtheman]

"Francois Dupuis, a vice-president and chief economist with the studies branch of the Desjardins banking group, estimates the cost of producing a penny at closer to 1.5 to two cents per coin once labour, production and transport are considered. “The mint has been saying for many years it costs .8 cents to produce a penny. . . . They only consider direct production costs, which are the costs of metals,” he said.

New Democrat MP Pat Martin, who tabled a private member’s bill to eliminate the penny last April, has said the actual cost is closer to six cents per coin, but the mint has flatly denied that. Other studies have pegged the cost at four cents"

hmmm

[sklm]

They are reusable so cost of manufacturing being higher than face value is not an issue.

[highvelocity]

I hate pennies, I always "donate" mine to the Tim Hortons Kids thing when I get change from buying coffee.

[Archanfel]

The important part is the cost of the copper can not be significantly higher than the penny or people would just melt it.

[Shawguy]

I heard a while back it costs $11 to make a loonie...should we start collecting those now? (and this was like early 2000's I heard this)

I would assume the metal plating that they do now may have lowered this cost...but in reality all coins cost more to make than face value due to labour and other conditions.

[AllWheelDrift]

The important part is the cost of the copper can not be significantly higher than the penny or people would just melt it.

Well, I have a feeling that's why they stopped making pennies out of copper. 1942-1996 pennies are made from over $0.02 of copper. I'm pretty sure melting them down is illegal though.

[Asoul]

Well, I have a feeling that's why they stopped making pennies out of copper. 1942-1996 pennies are made from over $0.02 of copper. I'm pretty sure melting them down is illegal though.

I would think it is illegal since you can't destroy bills, I would think the same would apply to coins.

[tallshipjoe]

The mint currently uses copper plated steel planchets. (as apposed to the US copper plated zinc, which is much more expensive) They have a value of less then a cent so any cost more then a cent would include other costs.

We really should have rounding of transactions done in cash (like in New Zealand)

I heard a while back it costs $11 to make a loonie...should we start collecting those now? (and this was like early 2000's I heard this)

This would be wrong, more like $0.11

I would think it is illegal since you can't destroy bills, I would think the same would apply to coins.

Yes it is.

[brunes]

I recently read that it costs our government $0.05 to manufacture a penny.

Couldn't a multi-billionaire go out and buy, say, 100 billion pennies (for a cost of $1 billion dollars), and just keep them all? I don't know how many pennies we have in circulation but I am sure 100 billion would make a dent. These would need to be replaced by our government to keep circulation levels up, and it would cost them $5 billion dollars to create $1 billion dollars worth of pennies. There would be no risk in this by the people purchasing the pennies, because it would still be legal currency, just would take up a lot of room.

Why anyone would want to do this, I don't know, but it is possible. I assume the same could be done in the United States with their penny, although there must be significantly more US pennies in circulation.

It may cost $0.05 to make a penny, but there is less thasn a cent worth of metal in it.

Pennies are mostly steel and are worth very ilittle in terms of materials.

From www.worldcoindata.com:

Information

Value: 1 Canadian Cent
Mass: 2.8 g
Diameter: 19.0 mm
Edge: Smooth
Metal Composition: 94% steel, 1.5% nickel, 4.5% copper
Years of minting: 1953-
Total Number Minted:
Elizabeth II D G Regina

Also it doesn't matter much that it costs 5 cents to make a penny because they don't make many of them, as they last almost forever. They spend way more making bills then pennies, rest assured.