1.26 Cents For Your Thoughts

It was bound to happen. Prices are going up on...well, everything actually. The cost of some of the metals used to make our coins has tripled since 2003, so the U.S. Treasury is actually putting Americans in debt to the tune of $100 Million a year just to mint pennies and nickels that cost more to produce than they're worth. A penny costs 1.26 cents and a nickel costs nearly a dime.

I found it interesting that the "copper" Penny is really 97.5% Zinc and only 2.5% copper while the Nickel is 75% copper and only 25% nickel. There's been talk of striking both of these denominations using steel. I'm not old enough to remember the series of 1943 steel pennies, but I have a few in an inherited coin collection. Of course back then it was because copper was needed for the war effort to make bullets.

Are we short on bullets? Considering the scope and cost of the Iraq War, it wouldn't surprise me. And we certainly can't leave our foot soldiers armed with nothing but harsh language and low-yield tactical nukes.

For my money, I say give the commodities markets an unceremonious kick in the crotch and start making the coins out of steel. What's the difference? It's not like the good old days when the coins actually had a measurable, intrinsic value based on their composition. They're only worth what the government says they're worth. The U.S. Treasury could start issuing wampum at this point and we'd have no choice but to accept it for the sake of our national debt.

But that is an issue unlikely to be addressed, let alone resolved, this year. Until it is -- you knew this was coming -- don't take any wooden nickels.