In a recent interview on CNBC Squawk Box, Philip Diehl, president of the U.S. Money Reserve, stated that the U.S. penny costs more to mint than it is worth.
He spoke, compellingly, about eliminating the penny, itself, saying that only 25% of all transactions are in cash while 75% are completed via electronic transmissions.
Simply put, what can a person buy for a penny? Penny candy has fallen by the wayside. Gumball machines that take a penny are no longer in operation. Nobody gives a shiny bright penny to anyone because it would be seen as an insult.
The only people that want to continue the production of the penny are the independent, private sector companies who supply the material for the production of the penny. These suppliers use 97% zinc in the production of the copper penny.
This penny lobby and the state of Illinois, the birthplace of Abraham Lincoln, seen on the face of the penny, are alone in their desire to see the penny continue as a viable coin in the American marketplace.
Many people don’t even stop and pick up a penny anymore, it has such a small value. Diehl said in his interview that if you stop to pick up a penny, you are making less than minimum wage for your efforts.
Nothing costs just one penny, anymore. Penny candy was the last American Product priced at a penny.
Consider other world currencies for a moment. In one third world economy where 500 units of their currency are equal to one American dollar, the smallest part of that currency system is a coin designated at a value of 5.