Does it make sense to keep pennies in circulation? With prices such as $9.99, marketers think that the customers feel they’re paying $9 rather than $10.
The fact is that a penny costs more than one cent to make. It’s made of 97.5% zinc, and it’s been costing the American taxpayers over $100 million a year to produce.
On the contrary, the supporters of the penny, including some economists, believe that eliminating it from circulation would raise inflation.
In a recent CNBC Squawk Box interview, U.S. Money Reserve President, Philip Diehl, claimed that the value from using pennies doesn’t cover the costs of producing them.
According to Mr. Diehl, “very few transactions on the market would be affected by the elimination of the penny,” while competitive markets would keep vendors from raising prices.
At present, only 25% of transactions are cash-based, while the rest is done electronically. So, few transactions would actually be affected by the elimination of one-cent coins.
Mr. Diehl had served as the Director of U.S. Mint after being appointed to the post by President Clinton. Currently, he runs U.S. Money Reserve, a top distributor of gold, silver, and platinum coins. The company has clients on all the continents.
The U.S. Money Reserve offers investors precious metals coins of varied sizes, ranging from 1/10 to 1 ounce for the gold coins. Government-issued coins from the United States, Canada, South Africa, and Australia are available, and are guaranteed when it comes to their purity.
The customers receive top quality customer service through a team of dedicated precious metals investment professionals.
The company also offers Individual Retirement Accounts for American investors as a way to diversify into precious metals for retirement savings. The gold bought in an IRA account is held by a custodian, while those looking to buy precious metals outside IRA get outright possession of their investments.