Canada abolishes the penny

Quote: pacomartin

How do you feel about Canada hawking their $100 bill and taking a small percentage of this profitable business away from America (and the EMU)?

If it helps my adopted countries economy, makes me happy.

(I'm still waiting for Canada and the Turks and Caicos Islands to do a deal on economic union as well).

US $1 coins are buried with the Atari ET games :)

The Canadian mint has followed its pledge to discontinue the penny by introducing MintChip (not a digital currency, but an inexpensive digital pay system) which it hopes will reduce Canadians dependence on coins and banknotes.

MintChip - The Evolution of Currency
Today's digital economy is changing faster than ever, and currency has to change too. It is, introducing MintChip, from the Royal Canadian Mint - the evolution of currency. MintChip brings all the benefits of cash into the digital age. Instant, private and secure, MintChip value can be stored and moved quickly and easily over email, software applications, or by physically tapping devices together.Change is good, this is better.

In a separate issue Canada notes that as of the end of 2011 the currency in circulation is now $61.0288 billion, up from $57.8742 billion at the end of 2010. The increase in hundred dollar bills is $2.06 billion of the $3.15 billion increase.

I really don't think this is going to go anywhere. This is due to the "loading" process where there needs to be a transfer from the bank onto your secondary payment device (your mintchip). I don't think this is much better, though it is an evolution.

We have Interac in Canada, which is a payment system that debits your bank account and uses chip technology, similar to your "credit card" bank cards in the US. It is quite convenient, and secure.

Quote: boymimbo

We have Interac in Canada, which is a payment system that debits your bank account and uses chip technology, similar to your "credit card" bank cards in the US. It is quite convenient, and secure.

From their website it says Interac is available to about 8 million Canadians. It's a wonderful system, and fees to merchants are less than 1 cent per transaction.

I know that many Canadians are devoted to the system, and they no longer carry cash (possibly with the exception of some coins). One gentleman was absolutely shocked when I told him that half the Canadian currency supply is in hundred dollar bills (9 per capita). He assumed that they were very rare.

==============
Do you use Interac in bars?

Among the more cash intensive businesses are bars. I personally consider it very dangerous, as my friends would often have to walk to the bank deposit with over $10,000 in cash very late at night to deposit the revenue from the day. Even in very nice neighborhoods, robberies at gunpoint are an issue.

A bar owner told me it is very common for patrons to leave a credit card and not pick it up until the next day. The reason is that the bars would charge just the drinks and put the cards in a safe. It is a way for the customer to welch on the gratuity. Some bars have begun adding an automatic gratuity on any cards left overnight.

A prudent safety procedure is to make periodic deposits from the cash drawers to the company safe. A friend of mine had her safe pulled out of the wall by a pick-up truck and carted away intact causing a huge amount of destruction. She also had massive problems with employee theft.

Quote: pacomartin

From their website it says Interac is available to about 8 million Canadians. It's a wonderful system, and fees to merchants are less than 1 cent per transaction.

Actually, Interac is available to all Canadians with a ATM bank card. A number of Interac (TM) transactions are usually included per month as part of the monthly fee package. According to Interac, there were 23.9 million users in 2010 which represents 75% of the country's population. There were about 3.971 billion Interac transactions in 2010 worth 175.6 billion dollars. (link here)

You can use Interac in bars and restaurants, and now, given that most restaurants bring the Visa/MC payment machine to the table, Interac is much easier -- if you wanted to pay Interac in a bar, you had to go to the credit card machine to punch in your PIN. With chip technology in Canada on credit cards in Canada, you now punch in your PIN at the table.

Just to give you an idea how ludicrous it is that USA still has the penny. The coin pictured is a Columbian peso worth a little more than 1 cent. Columbia's biggest bill is worth US$28. There GDP per capita is a tiny fraction of that of Canada or the USA. The sum total of all the banknotes is worth US$433 per capita. The country tried to issue a coin about 15 years ago to replace the smallest banknote (worth less than 60 cents), but the coin was so widely counterfeited that they went back to the banknote.

Even this country never uses this coin. They are very difficult to find in circulation. People simply round off the bill. So if a country that poor can round off, it seems stupid that we can't do it as well.

Rant on Youtube with 477,570 views [so far]

LINK

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A rare penny (one of 14) just was auctioned for over $1 million.

The real reason why we keep making the penny, is 60% of all production coins minted last year were the penny.

In reality we are only using 35% of the coins we produce, the nickels dimes and quarters.

How do you justify keeping two mints open? Is it for national security if one mint gets bombed by terrorists? How would America function without it's supply of pennies?

Production in millions of coins

Mint	1¢	5¢	10¢	25¢	50¢	N.A.$1-NativeAmerican$1Coin	Pres.$1-Presidential$1Coin	Total:
Denver	2,536.14	540.24	754.00	195.00	1.70	48.16	148.96	4,224.20
Philadelphia	2,402.40	450.00	748.00	196.20	1.75	29.40	148.40	3,976.15
Total:	4,938.54	990.24	1,502.00	391.20	3.45	77.56	297.36	8,200.35

For those who care, looks like Canada made their last penny yesterday.

I have a jar full here if anyone wants one for their collections :)

Quote: thecesspit

I have a jar full here if anyone wants one for their collections :)

The article states:
The mint has produced 35 billion pennies since it began production in 1908.

So that means that they have made more than a thousand pennies for every man, woman, and child in present day Canada in the last century. The article states that the penny will not be demonetized. So in theory they can still be used for a while. That's a lot of coins to vanish into collections, jars, and landfills.

As I said earlier, the biggest problem in the USA is that we have two mints, and over half of the utility coins produced are pennies. If the USA stops making pennies, nickels, half dollars, and dollars and concentrated on the only two coins that anyone really cares about, then what will those other people do for jobs?

Quote: pacomartin

As I said earlier, the biggest problem in the USA is that we have two mints, and over half of the utility coins produced are pennies. If the USA stops making pennies, nickels, half dollars, and dollars and concentrated on the only two coins that anyone really cares about, then what will those other people do for jobs?

I guess they will have to stop making money and find new jobs?

Does anybody know if US Mints make coins for other countries? Surely there has to be some business in that. Enough to keep a second mint open probably not.

Quote: AZDuffman

I guess they will have to stop making money and find new jobs?

Does anybody know if US Mints make coins for other countries? Surely there has to be some business in that. Enough to keep a second mint open probably not.

In the past the United States has struck coins for Argentina, Australia, Bahamas, Belgian Congo, Belgium, Bolivia, Brazil, Canada, China, Colombia, Costa Rica, Cuba, Curacao, Dominican Republic, Ecuador, Ethiopia, Fiji, France, French Indo-China, Greenland, Guatemala, Hawaii, Honduras, Israel, Liberia, Mexico, Nepal, Netherlands, Netherlands East Indies, Nicaragua, Panama, Peru, Philippines, Poland, El Salvador, Saudi Arabia, South Korea, Surinam, Syria, Taiwan, Thailand and Venezuela.

The U.S. Mint last produced coins for a foreign country in 1984. Since that Time, our Mint has struck coins exclusively for the United States. There is no current legislation forbidding the U.S. Mint to produce foreign coins. Demand for U.S. coins has been so great since 1984 that the Mint has not had the resources to strike coins for other governments. Since that date, the Mint has been taxed with a significant number of commemorative and precious metal bullion coins to be produced.

This, in turn, paved the way for many foreign Mints to chase down these lucrative foreign coin contracts. The British Royal Mint is probably has the most foreign coin contracts of any of them. The Royal Canadian Mint, Pobjoy Mint, Franklin Mint, Royal Australian Mint, Valcambi Mint, Italian State Mint all produce foreign coins,

Many people don’t realize it, but due to the expense many countries do not own their own facilities to produce their coinage or their bank notes. Those countries that have these facilities routinely solicit the countries that do not, making a profit from this production.

In addition to government Mints and security printing facilities, there are a number of privately owned mints and security printing facilities that also solicit nations for contracts to produce their currency for them. The Pobjoy Mint in the United Kingdom is probably the largest private mint in operation today. The firm of Thomas de la Rue and others are privately-owned security printing facilities that print stocks, bonds, negotiable instruments and bank notes for many countries.

Upwards of over 300 billion pennies have been made by the US Mint in it's history. Like Canada, that is roughly 1000 pennies for every person in the USA today.

2 things:
1. Death to Pennies, another video on the stupidity of pennies. This video pointed out something that I didn't realize: when the US stopped making the half-cent in 1857, the half-cent was worth more than 10 cents in current dollars. Blah, so stupid.

2. I'm current reading The End of Money: Counterfeiters, Preachers, Techies, Dreamers--and the Coming Cashless Society (previously mentioned by pacomartin in a few other threads I believe). In this book, the author makes a case for not getting rid of the penny: not calling attention to inflation and causing a panic among the general public. I don't agree with this case, but it's something to think about. There are probably lots of people out there who don't understand inflation, but if the US stopped making pennies, they might have it explained to them and would then FREAK OUT!

Quote: AcesAndEights

There are probably lots of people out there who don't understand inflation, but if the US stopped making pennies, they might have it explained to them and would then FREAK OUT!

I think that case is pretty weak, as every currency around the world (except USA) has dropped a denomination in the last century. The act is usually met with indifference as the coin must be pretty weak before it is dropped.

As to the larger question, Britain did a study which said that (as we all know) people spend more if they are using cards and large denomination banknotes. Poor people in particular use the £5 banknote as a way of budgeting their spending. The Bank of England launched an initiative to make the smallest note more available, and get better quality banknotes in circulation via ATMs.

For Americans who don't want to use bankcards, it may be possible to have throw away cards that will function for small change. Then the government can issue only the $10, $20 and $100 banknotes. Instead of getting rid of the penny, they should just get rid of all coins and small banknotes.