Anybody want to melt some pennies?

[toowm]

http://abcnews.go.com/Business/story?id=2725597&page=1

With the soaring price of copper, a melted-down penny or nickel is now worth more than it would be in its regular state at face value.

Who still thinks that inflation is low?

... the new regulations prohibit the melting or treatment of all 1- and 5-cent U.S. coins... Violators of these new regulations face up to a $10,000 fine, imprisonment of up to five years, or both.

Oops - we just made a dozen pressed pennies. Wonder if it's per occurrence.

Does the UN flag burn get hot enough to melt fiat coinage?

[Kat Kanning]

Melting point copper 1084.62 ?C, 1984.32 ?F.  I don't think our fire will get that hot.

[Dreepa]

What about all those penny stamping machines?  Are they all illegal now?
Are they going to arrest kids who put pennies on train tracks?

[Lloyd Danforth]

You can distress them, just not melt them. 

[Pat McCotter]

United States one-cent coins after 1981 are 97.5 percent zinc and 2.5 percent copper (copper-plated zinc). From 1962-1982 it was 95 percent copper and 5 percent zinc.

[toowm]

Zinc melts at 787.15 ?F, so if we add some charcoal and an oxygen bellows, who knows?

[Lloyd Danforth]

Copper pennies are about 160 to the pound

[eques]

So... how do they figure out if somebody's melting pennies?  I'm guessing it wouldn't be too intelligent to drop a 5-lb copper ingot off at the scrapyard if you wanted to avoid detection, but how would they even find out?

[aries]

I have a hard time understanding how a coin can be worth less than the materials it's made of.
I understand how it can be worth MORE

[Lloyd Danforth]

The cost of the raw material and making the coin is more than the face value.

[eques]

I have a hard time understanding how a coin can be worth less than the materials it's made of.
I understand how it can be worth MORE

It's because the cost of the raw materials is not linked to the value of the dollar.

The government would want the cost of the raw materials to be roughly equal to the stated value.  If it's too low, then it becomes cost-effective to make counterfeit money.  If it's too high, then it becomes cost-effective to break the coins down for raw materials.

The way you figure this out is you take the amount of raw materials that consist a coin.  You then go to the market values for those raw materials.  If the amount of material in a penny can be sold for greater than a penny, then (legal issues aside) it makes sense to "trade up" your penny for "real money" (you're not going to do just one penny, though, and that's the point, I think).

That's why paper money is so great for governments.  If they make it difficult to counterfeit due to doping/doctoring of the substrate and/or printing mechanisms and such, they can churn out all kinds of money for very, very little cost.

[aries]

I have a hard time understanding how a coin can be worth less than the materials it's made of.
I understand how it can be worth MORE

It's because the cost of the raw materials is not linked to the value of the dollar.

The government would want the cost of the raw materials to be roughly equal to the stated value.  If it's too low, then it becomes cost-effective to make counterfeit money.  If it's too high, then it becomes cost-effective to break the coins down for raw materials.

The way you figure this out is you take the amount of raw materials that consist a coin.  You then go to the market values for those raw materials.  If the amount of material in a penny can be sold for greater than a penny, then (legal issues aside) it makes sense to "trade up" your penny for "real money" (you're not going to do just one penny, though, and that's the point, I think).

That's why paper money is so great for governments.  If they make it difficult to counterfeit due to doping/doctoring of the substrate and/or printing mechanisms and such, they can churn out all kinds of money for very, very little cost.

I understand that the value is not related to the copper but

WHy not some sort of threshold... if a coin's face value is worth less than its parts, it is traded at the value of its material... It seems to me like using something valuable (ie a pair of jeans) and trading them for something worth slightly less (ie a 12 pack of soda)

[eques]

I understand that the value is not related to the copper but

WHy not some sort of threshold... if a coin's face value is worth less than its parts, it is traded at the value of its material... It seems to me like using something valuable (ie a pair of jeans) and trading them for something worth slightly less (ie a 12 pack of soda)

Who is going to agree to trade your greater-than-face-value coinage for what its raw materials are worth unless it's somebody who intends to melt it down?

A bank will take your penny and give you... a penny!

I also don't understand your analogy.  Perhaps a better analogy will help you understand the issue.

Let's say you have a work of art made of aluminum (cast when aluminum was really cheap) that's worth $100.  The market price of aluminum goes up so that the work of art is now worth $200 (say).  Setting aside the aesthetic implications, you can either sell the art for $100 or you can melt it down and sell the aluminum for $200.

That's what's going on with the pennies, really.  If you had 10,000 pennies, Uncle Sam says that you have $100.  But if you were to melt those pennies down and sell the metals to scrap dealers, they'd pay you about $175 or so for that metal.

Good luck finding a bank or a government agency that will give you $175 in return for "$100 worth" of pennies.

[eques]

Does anybody know if the value of quarters and dimes have similar fates to those of nickels and pennies, or are quarters and dimes made of cheaper materials on the whole?

[mraaron]

   The penny...the only common US currency backed by
intrinsic value.