Jim,
The article on currency hyperinflation [by Lee Roger, posted on November 30th] was interesting. However, trying to keep the puny penny alive to prevent hyperinflation is like trying to prevent floods by banning depth gauges.
Someone will need to explain to me why we need any coinage with a denomination less than the value of a minute of a minimum wage worker’s time. For decades in earlier times, our smallest coin was worth about as much as out current dime.
How many billions in wasted time would be saved if we had a simple coinage system that reflected real current prices, instead of living in denial about past and current inflation?
I propose that we could optimally operate with fewer coins: dimes, halves, and dollars, plus $5 coins. All transactions transacted in tenth dollars (drop the whole darn penny digit) Four useful coins for daily transactions, instead of the current six. Drop the wallet-bursting $1 bill, and the silly $2 bill, and keep the $5 as the lowest [denomination] bill. Add a $500 bill to allow more portable wealth, and the system makes as much sense as it used to.
Anyone who worries that this will cause more inflation is well-advised to buy precious metals. And of course, it would be better if the coinage and currency reflected real value. But that is no reason to live in denial about the reality of inflation. A pocket full of worthless change will not change economic reality.
Also, note that www.coinflation.com is an interesting source to determine the theoretical “value” of coins based on their metal content. But be cautioned that no one is paying these prices. They reflect the value if the metals were separated and pure. The cost of the mint to buy the metal to produce a coin does not mean that it has that value to any buyer. Sure, you can “double your money” by picking out pre-1982 copper pennies. But if it takes you only 6 seconds to find each one, you are earning only minimum wage. Never mind that the cost to transport it to copper buyers would eat much of your profits.- Mr. Bravo