My 2 cents

I went to the United States Post Office the other day to do $1.56 of first class business. Much to my amused surprise, in the coins I got back was a Canadian cent. It isn't exactly rare to get Canadian money mixed in change, especially in a Northern state like Minnesota, but it was a bit odd for a US government office to be using it!

When I sorted it out back home, flipping it resulted in a characteristic ~12kHz ring like an older US penny makes. In case you weren't aware, the US penny changed composition in 1982 and the mainly-zinc newer ones ring flat (if at all) while the mainly-copper older ones have a nice sharp tone. This particular Canadian cent was from 1979, and so I naturally wondered how much copper it had in it.

The reason it matters is that a copper penny's metal value exceeds its face value. Although it is illegal to do so currently, melting them down would net you more money than spending them; roughly 2 cents for every penny. The same should be true if a 1979 Canadian penny contains enough copper, plus I should be able to melt foreign currency with impunity! My go-to site for data on this is Coinflation, and they even helpfully have a page that lists Canadian coin melt values. Metal prices fluctuate, but as of this writing that 1 cent Canadian is worth 2.3 cents US. Thanks, Post Office, for the extra 1.3 cents!

If you've surmised by this point that my main point wasn't going to be about netting a cool supra-cent profit, congratulations. No, my greater point hidden in there is that it is dumb to have laws against doing sensible things. It used to be that the metal value of our money was the value. We had currency backed by silver and gold, but for some reason we not only switched to fiat value, we went and outlawed actually using the metal value for the lowest denomination coin we have. As if that weren't bad enough, even the Nickel has a metal value that often floats above 5 cents.

And that leads us to the reason this is in the Kill It With Fire section. There have long been calls to eliminate the Penny, but I'm going to take it the extra step and say we might as well do the Impossibly Stupid thing and eliminate 5 cent coins as well. The difference in value for most business transactions in truncating the total to the nearest 10 cents is going to be less than a single percent, and that's only necessary for paying in cash! They can still price individual items down to the cent, or even the sub-cent pricing that gasoline has long been sold at. Charge a credit card for as exact an amount as you wish but, from a coinage perspective, why not set the baseline at a dime?