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Nareed
Nareed
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June 16th, 2011 at 9:18:38 PM permalink
Quote: Wizard

Personally, I wish the US would:

1. Circulate $500 bills



Bound to happen sooner or later, especially if the government just keeps printing money.

Quote:

2. Eliminate the $1 bill, in favor of a $1 coin, the same size as the Canadian Loony.



I agree the only way a dollar coin will be widely circulated is if the dollar bill is eliminated.

Quote:

3. Eliminate the penny.



That will never happen.
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rxwine
rxwine
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June 16th, 2011 at 9:50:36 PM permalink
Quote: Wizard

Personally, I wish the US would:

1. Circulate $500 bills
2. Eliminate the $1 bill, in favor of a $1 coin, the same size as the Canadian Loony.
3. Eliminate the penny.



$500 bill sounds like a good idea.

Perhaps the energy consumed transporting (and minting) heavier coins should be calculated in the cost of getting rid of the 1$ bill. Of course, maybe that is offset by eliminating the penny.
prisoner of gravity
Wizard
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Wizard
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June 16th, 2011 at 9:58:41 PM permalink
Quote: Nareed

That (eliminating the penny) will never happen.



It is just a matter of time. Already it costs more than a penny to make a penny. However, according to John Stossal at least, the zinc lobby squashes any talk of eliminating the penny every time it comes up.

Still, eventually they will be worth so little it will just be absurd to keep making them. I set the over/under for the date the Mint quits making pennies at 2026.

Quote: rxwine

Perhaps the energy consumed transporting (and minting) heavier coins should be calculated in the cost of getting rid of the 1$ bill. Of course, maybe that is offset by eliminating the penny.



It is much more expensive making "paper" dollars, considering their much shorter lifespan than coins. The cost in fuel of lugging them around I think is negligible. We overweight Americans could use the additional exercise to carry around more metal in our pockets.

By the way, I put "paper" in quotes because they are not made of paper, but rather a mix of cotton and linen. That is why they don't get ruined when they go through the washer and dryer. Dang, that would have made for a good trivia question in the WoV trivia challenge yesterday.
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pacomartin
pacomartin
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June 16th, 2011 at 10:08:41 PM permalink
Quote: Wizard

Personally, I wish the US would:

1. Circulate $500 bills
2. Eliminate the $1 bill, in favor of a $1 coin, the same size as the Canadian Loony.
3. Eliminate the penny.

Why is it unconscionable for the European Union to print a 500 Euro note? I tend to doubt that is a major consideration in the illegal drug business.



I think it is a huge consideration. Cocaine and hundred dollar bills have a similar value per weight. If you smuggle cocaine you have to worry about the smell. If you are smuggling $100 banknotes you have to worry about the bulk, and you have to exchange the smaller banknotes for $100 banknotes. I think a big part of money laundering is getting the cash from one place to another where it can be converted.

A million dollar cash transaction involves something the size of a briefcase in US currency, but only a thick pocket billfold in 500 banknotes (about 3 pounds).

Now, I will grant you that there are high level government people who disagree. The EU defends its policy by saying that large banknotes don't cause crime, and people in Germany in particular were used to the big bills. There was a 1000DM banknote which is equivalent to a 500 banknote. The USA considered re-issuing the $500 banknote when the Euro currency came out, because they felt that the dollar would lose some of it's competitiveness.

The Canadian loonie is 7 g, diameter of 26.5 mm and thickness of 1.75 mm
The US presidential dollar is 8.1 grams diameter of 26.5 mm and thickness of 2.00 mm
So I don't see much advantage to the loonie over the US coin. But no government in the world prints a banknote as worthless as the American $1 bill. It is a huge waste of money and resources to print tons of these banknotes and then destroy them when they wear out in a little over a year. I mean Guatemala still has small banknotes, but their economy is so low that their biggest banknote is worth US$26.

The only practical solution to the penny is to make it worth 5 cents. The nickel is too expensive to mint as well as the penny, and the cost of producing and distributing all new coins will be outrageous. So the federal reserve should declare that banks will exchange 20 pennies for a dollar, and all the nickels will vanish into coin collections or be exchanged at banks. All the pennies will come out of tin cans and drawers. After that just keep minting the penny, but change the label from 1 cent to 5 cents. Authorize permission for stores to round up their bill totals to the nearest 5 cents. It will be confusing for a little while and some little kids will make out on their penny jars.
algle
algle
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June 16th, 2011 at 10:46:27 PM permalink
Quote: Wizard

Personally, I wish the US would:

1. Circulate $500 bills
2. Eliminate the $1 bill, in favor of a $1 coin, the same size as the Canadian Loony.
3. Eliminate the penny.

Why is it unconscionable for the European Union to print a 500 Euro note? I tend to doubt that is a major consideration in the illegal drug business.



You should live in New Zealand. We have made good progress with "updating" our currency since introducing decimal currency (i.e. 100 cents = 1 dollar) in 1967:

Originally we had:
NOTES: $100, $50, $20, $10, $5, $2, $1.
COINS: 50c, 20c, 10c, 5c, 2c, 1c.

First we dropped the 2c and 1c coins. At the same time, the $2 and $1 notes became coins. That way all the cash registers didn't end up with wasted space for 2 unused coin trays. There is no rule that prices have to end in 0 or 5 cents - you can still charge any price. If paying cash, "Swedish Rounding" is applied: .01 .02 .08 and .09 round to nearest .00 and .03 .04 .06 .07 round to nearest .05 -- a break even proposition over time for cash payers!

Then we changed our notes from paper to plastic. Huge saving in longevity, heaps of added security features, and we made them smaller too. That's killing at least 3 birds with one stone!

Recently we dropped the 5c coin and at the same time down-sized the 10c, 20c, and 50c. These used to be some of the heaviest coins in the world, Australia still uses similar large coins. You can still charge any price in cents, and many stores now round any increment down to the nearest .00. Of course rounding is only done on a total price [not on each item] so the savings are minimal. Over half of all retail transactions here are now electronic anyway, which means the exact price can be charged.

So, lighter and fewer coins, plastic banknotes that don't get destroyed in the wash - it's mostly good! The only downside is that plastic banknotes don't lie flat after being folded, which means casino dealers [to bring this post back to gaming!] find them harder to lay out when cashing for chips.

Can't help with the $500 note though. It seems logical to introduce this but I don't think we ever will. I've read the argument elsewhere that it makes it harder for criminals to move large amounts, this is apparently why the largest UK note is only 50 pounds? Casinos are the only place where I tend to see a lot of $100 bills, but even there we have a law now that slot machines won't accept anything bigger than a $20 note. Of course the casinos got around that by using vouchers and bill exchangers - what a waste of time.
Still, 2 out of 3 ain't bad!
Bring on the $5 coin I say.
If nothing will change then I am nothing.
waltomeal
waltomeal
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June 16th, 2011 at 11:44:30 PM permalink
Quote: Wizard


2. Eliminate the $1 bill, in favor of a $1 coin, the same size as the Canadian Loony.



How ever will I tip strippers?!?
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rxwine
rxwine
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June 17th, 2011 at 12:01:55 AM permalink
Quote: waltomeal

How ever will I tip strippers?!?



Leave her guessing which time your hand will have a $5 bill in it?
prisoner of gravity
FleaStiff
FleaStiff
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June 17th, 2011 at 1:43:39 AM permalink
Those poor Mexican cops. They must have been so tired lugging away their haul that this is what they left behind.
pacomartin
pacomartin
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June 17th, 2011 at 3:21:47 AM permalink
Quote: algle


Recently we dropped the 5c coin and at the same time down-sized the 10c, 20c, and 50c. These used to be some of the heaviest coins in the world, Australia still uses similar large coins. You can still charge any price in cents, and many stores now round any increment down to the nearest .00. Of course rounding is only done on a total price [not on each item] so the savings are minimal. Over half of all retail transactions here are now electronic anyway, which means the exact price can be charged.

So, lighter and fewer coins, plastic banknotes that don't get destroyed in the wash - it's mostly good! The only downside is that plastic banknotes don't lie flat after being folded, which means casino dealers [to bring this post back to gaming!] find them harder to lay out when cashing for chips.

Can't help with the $500 note though. It seems logical to introduce this but I don't think we ever will. I've read the argument elsewhere that it makes it harder for criminals to move large amounts, this is apparently why the largest UK note is only 50 pounds? Casinos are the only place where I tend to see a lot of $100 bills, but even there we have a law now that slot machines won't accept anything bigger than a $20 note. Of course the casinos got around that by using vouchers and bill exchangers - what a waste of time.
Still, 2 out of 3 ain't bad!
Bring on the $5 coin I say.



So the smallest coin in New Zealand is 10 cents (8 cents American) and there are nobody gets upset with the rounding. Very sensible.

New Zealand, like Iceland issues a very small amount of currency, roughly 1000 NZD per capita (US$800). The 100NZD banknote is between 3 and 4 per capita, and the 50NZD banknote is between 4 and 5 per capita. So the 20NZD is the primary banknote of use.

It would be virtually impossible to start a large scale counterfeiting operation. People would notice if you tried to circulate the larger notes since there are so few in circulation, and it would take forever to circulate enough counterfeit twenties to make the operation worthwhile.

The circulation numbers of larger banknotes are so low, that any major criminal organization must work in foreign currency, diamonds, bearer bonds, all electronic transactions. Street transactions for prostitutes, heroin, and stolen goods are also difficult. Muggings and purse snatching also offers little return.

The ability to direct person to person electronic transactions using personal phones should be available in a few years. I suspect your government in limiting the banknotes acceptable to vending machines is thinking they may some day stop printing the 50 and 100 dollar banknote entirely. Then cash transactions will be for only the most incidental of purchases.

The UK has traditionally been wary of large banknotes since WWII. Operation Bernhard made such an accurate counterfeit pound note, that the government withdrew all of it's currency higher than the 5 pound note. They only re-issued the 50 pound note about 30 years ago and even today they are only circulating 3 banknotes per capita. But the UK issues roughly 1000 pounds per capita, nearly double the value of 1000 New Zealand dollars per capita.

Contrast that with my earlier figures that US is printing over 60 $100 banknotes per capita last fiscal year. But the per capita is almost meaningless since they are clearly meant to go overseas and into the foreign reserves of the world's central banks. Almost as a byproduct they finance the criminal organization and dictators of the world.
pacomartin
pacomartin
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June 17th, 2011 at 3:29:06 AM permalink
Quote: Wizard

It is just a matter of time. Already it costs more than a penny to make a penny. However, according to John Stossal at least, the zinc lobby squashes any talk of eliminating the penny every time it comes up.

Still, eventually they will be worth so little it will just be absurd to keep making them. I set the over/under for the date the Mint quits making pennies at 2026.



Both pennies and nickels are money losing operations. Pennies are literally worth less than dirt (if you look at prices for good soil). Just transporting them around is ridiculous.

Nickels have a higher 'nickel' content than quarters or dimes. So they are running at production costs of around 7 or 8 cents.

If you redesign a nickel that is cheaper to produce, you need to make enough of them to replace the entire supply since the originals will immediately vanish into jars.

The only sensible thing is to make a penny worth 5 cents. That way the zinc lobby doesn't go bonkers, and you don't have to replace all the coins. You don't have to radically retool all the mints. The new pennies will just say 5 cents, and they won't make nickels anymore. There will be a handful of people with tubs full of pennies that will make out, but in the large scale it won't matter.

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