Philip Diehl, the President of U.S. Money Reserve, makes a good argument about the penny. According to Diehl, the penny has outlived its usefulness. Diehl knows a lot about coins and coins minting. Not only is he the President of one of the largest distributors of coins in the United States, but he has also held some powerful positions in the government.
The penny is mostly zinc these days. The old copper penny was scraped years ago because it was too expensive to make. The zinc version of the penny is also a money loser, and that is one of the points Diehl made when he was interviewed by CNBC Squawk Box. In fact, the government lost more than $114 million last year simply because of penny minting.
The penny has been the basic coin in the U.S Currency system since 1792. The first penny was minted by an outside company in 1787, but that larger version of today’s penny didn’t withstand the test of time either. In fact, there have been 11 different penny designs over the years, and that is partially due to the popularity of the penny.
People loved pennies. They don’t love it for the same reason they did 100 years ago, but Americans still love their pennies. They love them so much that they take them out of the distribution network, and that’s another reason the coin is on the endangered list, according to Diehl.
During the CNBC Squawk Box interview, Diehl also said the banks still ask the mint for pennies and retailers use pennies to assign prices to merchandise. Retailers have always believed that a 99 cent designation is always better than a rounded-off number from a marketing standpoint. Diehl claims the retail industry will adjust once the penny becomes obsolete, but the Zinc industry is fighting hard to keep the penny in production.
But penny lovers say, if each thought is worth a penny and someone puts their two cents into a conversation then someone just made a penny. That statement just wouldn’t sound right if a nickel was used instead of a penny in that statement.”
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