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The Cashless Penny

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About KDR

The Cashless Penny

Brent Jessop - Knowledge Driven
July 5, 2007

A new report by the Bank of Canada has concluded that we should have dumped the penny two years ago. Apparently it costs about $130 million a year to make 1.4 billion pennies. That is, it costs 9 pennies to make one penny. You may ask why are pennies so expensive? Their answer: it is your fault because “people are hoarding and not spending their pennies”.

Now, if the government** went around and discarded everything that was costing more money than it was worth, there would be no government left. So something else must be going on here.

A Penny Has Always Been Worth a Penny, Right?

Way back before about 1919 (the timeline varies slightly for the 5, 10 and 25 cent coins) our silver looking coins were actually silver. 92.5% to be exact. From 1920 to 1967 they were reduced to 80% silver. Immediately after that in 1968 the sliver was completely removed and the coins were then composed of nickel. One last time, in 2000 the coin compositions were switched to 94% steel, 3.8% copper and 2.2% nickel plating.

The penny had a similar fate, recently being changed from copper to zinc to steel.

This short history of our coin composition represents quite nicely the shrinking value of our currency.

The value of the currency had dropped so much that the silver content made the coins too expensive to make.

The value of the currency had dropped so much that the nickel content made the coins too expensive to make.

The value of the currency had dropped so much that the steel content made the coins too expensive to make.

Now the penny is essential worthless, so why bother?

But do not forget that this continual drop in value was because of a corrupted banking system, not because “people are hoarding and not spending their pennies”.

Cashless Penny to Cashless society

The real purpose behind all of this is to focus your attention on how expensive it is to create hard currencies and how much cheaper it would be, for everyone, if we just used electronic money instead. The great cashless society. The wet dream superstar of control freak despots everywhere. Without the approval of your local petty bureaucrat, or any other layer of the ever growing bureaucracy, you will not be allowed to make any transaction. Every transaction tracked, traced and stored forever on one gigantic database. But don’t you worry; it would never come to that. You can be reassured (just like the new ‘no fly list’) that there will be an Office of Reconsideration to quickly correct any of the rare injustices that may popup from time to time.

** The Bank of Canada is still nominally under governmental control under the Bank of Canada Act

Related Common sense is no cents at all: Winnipeg MP

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