No More Cents?
February 12, 2025
“The end of the penny.”
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A On Sunday, the president issued an executive order directing the treasury to stop minting 1-cent coins, a practice he called “wasteful.”
- Trump noted that each penny costs over 2 cents to produce.
- The US mint said it lost $85.3 million making billions of pennies at 3.7 cents a pop during the last fiscal year.
Other Countries Have Done It: Canada, Australia, and many European nations have eliminated their lowest-denomination coins without major issues. There have been, nevertheless, debates about eliminating pennies for years, and even with the production stoppage they remain in circulation.
Here are few key reasons:
1. Tradition & Public Sentiment
Pennies have been around since 1793, and many Americans feel a sentimental attachment to them.
2. Rounding Concerns
If pennies were eliminated, cash transactions would need to be rounded to the nearest nickel. Some people worry this could lead to and higher prices over time, although studies suggest the impact would be minimal.
3. The Zinc Lobby
Pennies are 97.5% zinc, and the zinc industry benefits from continued production.
Lobbyists from the metal industry have pushed to keep pennies in circulation.
The debate continues but we agree with the idea that counting and handling pennies slows down cash transactions and thus are a waste of time.
Please keep in mind this information should not be considered as financial advice. Investment decisions should be based on individual research and consultation with a qualified financial professional. The value of investments can fluctuate, and past performance is not indicative of future results. Always consider your risk tolerance and financial goals before making investment decisions.
