Category Archive 'Coinage'

17 Nov 2007

Coins of the Realm

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P.J. O’Rourke discusses, in the Weekly Standard, how it costs the US Government almost two cents to produce a penny.

The problem is the cost of zinc, which is what a “copper” is actually made of. For the past 25 years a penny-weight of copper has been worth considerably more than a penny. And we wouldn’t want our money to have any actual monetary value, would we? That would violate all of the economic thinking that has been done since the days of John Maynard Keynes. And it would give the Federal Reserve Bank governors nothing to do except sit around saying “oops” and “whoopee” every time the economy went down or up. Therefore the U.S. Mint began making pennies out of less expensive zinc with a thin plating of copper for the sake of tradition and to keep Lincoln from looking like he’d been stamped out of a galvanized hog trough. But then a rising commodities market drove up zinc prices. (Maybe China needs a lot of zinc for, oh, I don’t know, stabilizing the lead paint of Barbie dolls so that our girls don’t start beating their girls on math tests, or something.)…

Libertarians are only human. When we’re tired and stressed, we occasionally experience delusional hallucinations involving government–the kind Hillary Clinton should be medicated for at all times. But then comes the story about the penny costing two pennies, and we experience a sudden miraculous Hayekian, Misesean, Rose and Milton Friedmaniacal psychiatric cure. All my sane disgust at and mentally balanced distrust of the political process returned like–need I say it?–the proverbial bad penny.

Meanwhile in Indiana and Idaho, as the Washington Post reports,the federal government was busy eliminating the competition.

Federal agents on Thursday raided the Evansville, Ind., headquarters of the National Organization for the Repeal of the Federal Reserve Act and Internal Revenue Code (Norfed), an organization of “sound money” advocates that for the past decade has been selling a private currency it calls “Liberty Dollars.” The company says it has put into circulation more than $20 million in Liberty Dollars, coins and paper certificates it contends are backed by silver and gold stored in Idaho, are far more reliable than a U.S. dollar and are accepted for use by a nationwide underground economy.

Norfed officials said yesterday that the six-hour raid occurred just as its six employees were mailing out the first batch of 60,000 “Ron Paul Dollars,” copper coins sold for $1 to honor the candidate, who is a longtime advocate of abolishing the Federal Reserve. The group says it has shipped out about 10,000 silver Ron Paul Dollars that sold for $20 and about 3,500 of the copper $1 coins. But it said the agents seized more than 50,000 of the copper coins — more than two tons’ worth — plus smaller amounts of the silver coins and gold and platinum Ron Paul Dollars, which sell for $1,000 and $2,000.

“They took everything, all of the computers, everything but the desks and chairs,” the company’s founder and head, Bernard von NotHaus, said in a telephone interview from his home in Miami. “The federal government really is afraid.”…

“People are pretty upset about this,” said Jim Forsythe, head of the Paul Meetup group in New Hampshire, who said he recently ordered 150 of the copper coins. “The dollar is going down the tubes, and this is something that can protect the value of their money, and the Federal Reserve is threatened by that. It’ll definitely fire people up.”

Von NotHaus said agents also raided Sunshine Minting in Coeur D’Alene, Idaho, a company that makes the organization’s coins. He said agents seized huge pallets of silver and gold, worth more than $1 million, that the organization says back the Liberty Dollars.

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