Ron Paul on the debasement of the US dollar>>>
America, Ron Paul said, has failed to maintain a gold standard or silver standard for its currency.
"Now," he said, "we cannot even maintain a zinc standard."
This is in ref to a new bill coming to make the penny out of steel, the nickel out of other than nickel, etc.
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The Mint has coined American money since 1792. Congress has given it the power to tweak coin composition several times. Rationing begat a steel penny and a no-nickel 5-cent piece during World War II. Rising prices pushed silver out of coins in the 1960s. Copper inflation gave us the current penny, which is copper-plated zinc, in the early '80s.
Until recently, Mint officials say, no American coin had ever cost more to produce than it was worth.
Global metal prices began rising in 2003, driven by increased demand for raw materials, particularly in India and China, according to Mint statistics. The price of copper quadrupled in the past five years. Nickel more than tripled, and zinc nearly did the same. The Mint lost $33 million on penny and nickel production in the 2006 fiscal year. In 2007, it lost $99 million.
"There is no indication," Mint Director Edmund Moy told the House Subcommittee on Domestic and International Monetary Policy, Trade and Technology in written testimony, "that copper, nickel and zinc prices will decrease over the short term."
Steel pennies in 180 days
Enter the Coin Modernization and Taxpayer Savings Act of 2008, the subject of Tuesday's hearing. It would give the Treasury authority to set the weight and composition of any coin whose production costs exceed its face value for five consecutive years. It also requires the Mint to start producing a primarily steel penny within 180 days of the bill becoming law, so taxpayers would save money almost right away. |
