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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (756279)	12/19/2006 6:17:28 PM
From: DuckTapeSunroof	Respond to of 769670

US Mint announces that a nickel is worth 7 cents, and bans melting: USA Today reports, “People who melt pennies or nickels to profit from the jump in metals prices could face jail time and pay thousands of dollars in fines, according to new rules out Thursday. “Soaring metals prices mean that the value of the metal in pennies and nickels exceeds the face value of the coins. Based on current metals prices, the value of the metal in a nickel is now 6.99 cents, while the penny's metal is worth 1.12 cents, according to the U.S. Mint… “‘The nation needs its coinage for commerce,’ U.S. Mint director Ed Moy said in a statement. ‘We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers’… “Under the new rules, it is illegal to melt pennies and nickels. It is also illegal to export the coins for melting. Travelers may legally carry up to $5 in 1- and 5-cent coins out of the USA or ship $100 of the coins abroad ‘for legitimate coinage and numismatic purposes.’” Note the irony in the mint for being concerned about those who would “take advantage of the American taxpayer,” when the actual production cost for each penny is now up to 1.73 cents, according to the Houston Chronicle. Year in and year out, The U.S. Mint wastes money by coining pennies. 2006 Coin Production Figures Source: The U.S. Mint. Notice that the Mint produced $78,612,000 worth of pennies at a cost of $135,998,760, thereby wasting $57,386,760 of taxpayer money through November 2006. Worse yet are the continued handling charges (and time wasted) by merchants and banks sorting and counting the damn things. Click on the above link if you wish to calculate how much the Mint wasted in 2004 and 2005 coining pennies. Following is an e-mail conversation I had with John Rubino at Dollarcollapse.com shortly after I wrote “Pennies, Nickels, and Dollars”: Mish: Oddly enough, it is quite likely that The Mint will bring upon the very conditions it hopes to prevent! Telling people 20 nickels are worth 40% more than a dollar can only invite hoarding. Rubino: Exactly! I told my 9-year-old about the nickel thing today (he's home from school with a cold) and he immediately got our change jars out and started picking out the nickels. ...Recall that the Mint long ago replaced much of the nickel in nickels with copper, just as it removed the silver in silver dollars and replaced the copper in pennies with zinc. .... In the short term, it is likely the value of a nickel drops to a nickel or less because of the falling price of copper. If there were as much nickel in nickels as there used to be, then nickels would be worth even more than today's copper nickels.... Mike Shedlock ~ “Mish” whiskeyandgunpowder.com

To: DuckTapeSunroof who wrote (756279)	12/20/2006 9:25:57 AM
From: Rarebird	Read Replies (1) \| Respond to of 769670

>>The FED funds rate affects many consumer credit vehicles, including credit cards.<< The Fed has virtually no tools to prick an asset bubble because their blunt instruments (interest rates) affect all players in the economy and punishing everyone with higher interest rates in order to prick an asset bubble in a single sector of the economy is not fair. Actually, the markets are reacting more rationally (these days) than many in the past did. They have learned that the monetary authorities are ready and willing to come to the aid of stability in the face of threats to the economic system. Checks and balances in the form of risk-sharing make the current system more resilient. I agree with the Permabears that the US has a fundamentally overvalued stock market and a bond market which reflects a ridiculously low yield level for the inflation risk inherent in loaning money for a decade or more. But Nothing in the fundamentals requires this situation to be reversed immediately. The market will rudely take steps to destroy any premature bear who stubbornly dares to stand in its way.