Canada abolishes the penny

Is anyone aware of the implications (including to the U.S.)........ about Canada getting rid of the penny.......... which happened over a year ago?

What are the positive & negative implications.

Put your thinking caps on!

((( It's a game-changer/history-maker )))

One effect will be that cash registers with automatic change making dispensers will need re-programming. All prices can remain to be set to,the exact cent, only final sums in cash transactions are subject to rounding up or down to the nearest five cents. The penny remains legal tender.

Coins are on the way out in general. Cash transactions are increasingly in the minority. Card purchases will soon be joined by various electronic payment systems based on smart phones. Online shopping is all cashless.

For is detectorists, this is bad news. What is worse for us however is the irrationally conservative approach the U.S. has to coinage. Not only should the penny be abolished, but the nickel as well. We need well designed and distinctive $1 and $5 coins and the abolition of these bills. That would leave $10, $20, $50 and $100 in circulation and give us something worth detecting!

Just for your amusement, here is some stuff about the situation in Norway.

This is the case in Norway. The Norwegian Krone is worth about 14 cents and this has been the case for most of the post WW 2 era. The krone is divided into 100 øre. Until 1972, there were 1 and 2 øre coins - the smaller one being worth 0.14 US cents - it would take 7 to equal a US penny! Over the years since then, the rest of the ore coins have been eliminated, namely 5, 10, 25 and 50 øre. Now the 1 krone coin is the smallest and cash transactions are therefore rounded up or down to the nearest Krone.

For detectorists, the bad part is that the replaced coins (with the exception of the last 50 øre coin), are no longer legal tender and cannot be exchanged, even at the National bank! Even worse this applies to former versions of the 1, 5 and 10 krone coins! You can find lots of 5 and 10 krone coins, worth 70 cents and $1.40 US respectively and they are legally worthless - ouch!

So, why would they do this? The answer is that it is an unfortunate side effect of laws intended to "smoke out" stashes of "black money". Folks who have piled up safe deposit boxes full of cash by theft, tax evasion, drug dealing, etc. are inconvenienced by the issue of new 100, 500 and 1000 krone bills with relatively short periods where you can hand in the old ones for new ones. After that, the old ones are worthless! Honest folks can just go into their local bank and exchange unlimited amounts - but such transactions are recorded.

Interesting to note that in this country, the Federal Reserve issues all the paper currency (Federal Reserve Notes) while the Congress issues all the coinage. With every coin that ceases production, it simply gives the Federal Reserve more power. Perhaps that is the reason they will not stop making paper dollars: giving it up means a loss of control to the Federal Reserve. Imagine what would happen if Congress decided to start making $5 and $10 coins again!

Here in Canada, yup penny is no gone. If you pay by debit or credit card you still get charged $1.02, if you pay by cash, you pay $1.00, if the bill is $1.04, you pay $1.05.
You will no longer be given pennies in change. Stores will accept pennies as well as banks. Because they want the copper coins. But, no longer issued.
That's great as I hate digging zinc pennies, if they are too badly corroded, the coin machines will spit them out.
That's how it now works.

Canada did away with the $1 bill long ago in favor of the $1 coin. And also have the $2 coin. That's a plus for us since they fall out of peoples pockets like quarters in the US.
The nicest thing about Canadian clad coins, for the most part they can be in the ground for 10 years and still look good.


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This will prompt the US to review their own currency. They are losing their shirts in the minting of cents, and also taking a big hit on the nickel.

Your dollar has consistently lost purchasing power over your lifetime, and has lost a great deal more since 2008. ( 8% IIRC)

Watch for either the banishing of the lower value coins, or substitutions in material. I suspect that they will make them from steel or some type of polymer.

Ive heard that Canada want's to replace the 5 dollar bill with a coin also..

they have the 1 and 2 dollar coins already...

they want to phase out the 5 center.. I have read also

A coin last for about 30 years in circulation ..paper ?? Not long I bet....especially the 1's 5's and 10's..

I could see this as an advantage to the detectorist as being able to find REAL value FLASH money...

I would not mind digging 5 dollars up instead of 500 penny's....

Im sure one day all currency will be gone in this digital age we live in but for the next couple/few decades we the detectorist might be in for a treat if the U.S. decides to do the same thing...


but lets look at it like this also ..if they round the pennys to the nearest dollar or nickle...but then get rid of the nickle well somehwere along the way we will end up paying 5 -7.5 percent more for good's...and probabbly in reality 10 percent more as the consumer will get the short end of the deal when rounding if the nickle dissapears too....

but what if all the Cent coins are removed and we just have coins in dollar denominations...Some small countries could seebig economic problems by that..

As I sit here writing I think to myslef theres not alot I can buy for 50 cent's anymore...I mean a 12 ounce coke in a machine is 50 cents if your lucky...Loaf of bread on sale store brand 1.09...can of chili over a buck now...vienna sausages are the cheapest thing I eat..and unless I can catch them on sale for 50 cents on the libbys there a buck or more...

but to be perfectly honest with you the only time I need coins in my pocket anymore is to use in vending machines at work...and ours are non profit so stuff is cheap..but out in the real world vending machines are a bcuk or more for anything..

Yes its coming ...anything is at least a buck...a pack of wrigleys..well it's not worth a buck but if they make you buy 2 packs at a time for 1.00 including tax..well I think you see the point..My libbys vienna's for 50 cents ..Ill have to buy 2 at that price to get to the dollar with tax...Or will I ???Maybe Libbys vienna sausages will double their profit ?HMMMM

I can see the 1, 2 ,5, dollar coins taking the place of 1-5-10-25-cent coins in the future for sure..

Prices will have to be adjusted so that everything comes to the nearest dollar...even the small trinky stuff that may have tp be bought in multiples or driven out fo business or your geiven less value for the dollar..

we the consumer will pay the prices!!

Keith

The unit prices aren't adjusted. If you buy 10 items at 99 cents each, your bill is $9.90. If we eliminated the nickel and penny, you'd pay with a $10 and get a dime back. If two of the items were only 97 cents, then your bill would be $9.88 - that would get rounded up to $9.90 as well. If four of the items were 97 cents, your bill would be $9.86 - again you pay $9.90. Once it goes down to $9.95 however, your bill becomes $9.80!



Edited 1 time(s). Last edit at 05/24/2014 11:22PM by lytle78.

Sven1 Wrote:
-------------------------------------------------------
> Here in Canada, yup penny is no gone. If you pay
> by debit or credit card you still get charged
> $1.02, if you pay by cash, you pay $1.00, if the
> bill is $1.04, you pay $1.05.
> You will no longer be given pennies in change.
> Stores will accept pennies as well as banks.
> Because they want the copper coins. But, no longer
> issued.
> That's great as I hate digging zinc pennies, if
> they are too badly corroded, the coin machines
> will spit them out.
> That's how it now works.
>
> Canada did away with the $1 bill long ago in favor
> of the $1 coin. And also have the $2 coin. That's
> a plus for us since they fall out of peoples
> pockets like quarters in the US.
> The nicest thing about Canadian clad coins, for
> the most part they can be in the ground for 10
> years and still look good.
> [www.canadianmetaldetecting.com]
> oad/file.php?id=26005

I am just across the pond (St.Lawrence River) from Ontario,Canada and find a few Canadian coins but hardly ever a Loonie or Toonie. We get lots of Canadian folks around here shopping in the stores and getting gas at the gas stations but probably not many go to the parks,schools,etc.

Well guess i"ll start keeping the pre 82 cents- the copper in them exceeds the face value. Sure hope to see 1 & 2 & 5 dollor coins (have read a paper 1$ bill has a lifespan of 18 months). Will have to expand my th into relics, copper float, silver nuggets and a lot of water hunting.

Hey Dale I would love to see the 1,2 and 5 dollar coins for sure...It would make recent drop hunting alot of fun!!!!

Keith

By the way, all Canadian bills are no longer made of paper. They are made out of plastic.
And it does melt.
Scratch the maple leaf on the $100 bill and it smells like maple syrup.


DeepTech Vista X with 3 search coils.
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Sven1 Wrote:
-------------------------------------------------------
> By the way, all Canadian bills are no longer made
> of paper. They are made out of plastic.
> And it does melt.
> Scratch the maple leaf on the $100 bill and it
> smells like maple syrup.
> [timenewsfeed.files.wordpress.com]
> asticmoney.jpg?w=360&h=240&crop=1

And tastes like chicken,lol Sorry Sven I couldn't resist.

I'm just brain storming here.......................

My guess is retailers will set the prices so goods will be priced to have to round up. Retailers may boast that they have everything priced to round down, when in fact, they raised the price,,, too round down.

People may choose to use credit cards for buying because of the 'rounding'....credit card purchases don't get rounded. Using credit cards tells a story of what you personally consume, what you do, where you go, etc.
This may be a baby step for the elimination of all currency....Bitcoins comes to mind.

They would have to produce more nickels if eliminating pennies....nickels also cost more than their worth, to make. So whatever their gaining not making pennies, they're loosing making more nickels.....on up the line until the paper bill isn't worth making anymore....BAHM!.. totaly digital.

How does this work out in the currency market?

Like I said, I'm just throwing out thoughts that may kick up something. I have almost zero qualifications in this area.

One more thought. What happens to the money that's rounded up? Does the govt. get a chunk in the form of tax from it? my guess is sure they do....sales tax, income tax? Who benefits?



Edited 2 time(s). Last edit at 05/25/2014 12:37PM by ozzie.

The end results of eliminating the penny all fall on the side of the government so expect a push to shove it down your throats.
From an economic point , studies at Penn State have shown 93% of transactions will be rounded up as most transactions end in 3,4, 8, & 9 and where do you think the additional revenue will go but eventually to the government through taxation
Who will "feel"it the most will of course be those who can afford it the least.
The nickel will be next on the list and much more vulnerable as the government is losing more on the nickel than on the zinc. (BTW , silver is a by product of ther production of both of those so it could be negative for silver production which SHOULD be positive for silver prices)

The real significance is that from a philosophical point the penny and nickel are the only remaining vestiges of "sound money" left in our currency, hence the governments "logical" arguments for abandoning them because it costs us more to make them than they are worth. The amount lost on production of the two combined is insignificant when compared to the leviathan of real debt and waste on other issues.

It will happen because the 52% who depend entirely on the govenment for existence will do exactly as the government tells them to do.

I've no idea why some of you are so concerned about the subtle details of rounding up / down / being ripped off. Firstly the cent and nickel are near-worthless, so rounding has trivial consequences. Secondly, when we here in the U.K went decimal in 1971, people were concerned that they would lose out, prices would rise etc. In fact no such effect was detectable, and the high inflation at the time made it hard to determine if there was any real price increase.
Re. the US currency, if they lose the cent, and keep the nickel, there will be increased demand for nickels, as it would be the smallest denomination coin. So more would need to be struck...but they cost too much to make. So making them out of nickel-plated steel would be a likely solution, with the probable gradual withdrawal of the cupro-nickel ones. That sounds like a lot of trouble - it's likely they will withdraw the nickel, too. But they could probably get away with waiting another 5 or even 10 years, until the nickel really is worthless before doing this.

We're anticipating withdrawal of out 1 and 2 pence coins (=1.5 & 3 cent), but our next largest coin (5 pence) is now nickel-plated steel, and suitably small, so it's likely to survive for some time to come.

........ Exceptionally perceptive.

The average person does not carry cash or change like they did 10 to 15 years ago. It is all about plastic cards. In the near future I can see all types of (hard) money going away. If you need cash, it will most likely cost you more.....

Our new Canteen at work is all plastic... no cash or change. Employer requires you have a debt card to get paid for your labor, so it works out......

Tom in SC

Since moving to Canada, with no $1 bills, my pockets always have plenty of $1 and $2 coins in them and unless you have deep pockets, they will fall out.
Go buy something with cash and you more than likely get those two coins back in change if paying with a $5 or $10 bill.
If the US goes to nickel plated steel coins like Canada, so much the better, they won't have that ugly looking copper grey brown color when they come out of the ground.
The steel ones will be pretty clean, a quick rinse and spend away. Now and than you'll get one with a rust spot.
Your biggest fear will be being used to ID machines ID'ing US coins correctly. Your ID detector will be like a pinball machine, your target ID will bounce all around.
If your used to a beep and dig detector using low discrimination, you'll have no problem. Tesoro's have no problem finding Canadian coins. So if the US goes steel,
Tesoro's lowly detectors maybe rise to being number one. Maybe Tesoro knows something, if they keep producing the current line of detectors without sinking money in new technology,
they may stand to make a lot of profit.

DeepTech Vista X with 3 search coils.
Works for me

Interesting what you observe about the steel coins, Sven. Is the coins detectability caused by the copper content? Wikipedia says they are 3.5% copper, though in what way it doesn't detail. Nickel-plated copper-plated steel? Our British nickel-plated steel coins appear to be just that. And as nickel is ferromagnetic, like iron/steel, our newest 5p & 10p coins look like iron to detectors.

Canadian coins changed again, some register in the low iron range, most folks with discrimintion will not dig.
You can get a better idea how the coins mess up detectors by visiting Crusty's site:

[www.crustymetaldetecting.com]



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Sven1 Wrote:
-------------------------------------------------------

> The steel ones will be pretty clean, a quick rinse and spend away.

It is not true. Here in Canada steel core coins came up from the soil badly rusted. After several years they will desintegrate completely.

YuriyV Wrote:
-------------------------------------------------------
> Sven1 Wrote:
> --------------------------------------------------
> -----
>
> > The steel ones will be pretty clean, a quick
> rinse and spend away.
>
> It is not true. Here in Canada steel core coins
> came up from the soil badly rusted. After several
> years they will desintegrate completely.


Sorry bud, not in Ontario, for the most part all are clean compared to US dug coins. Dug thousands of CA clad coins. You get the odd one with a spot of rust, just scrapes off.
Loonies never rust, maybe the 2012 ones will? You do get the odd clad coin that is rusted. I would agree with you if where you live the ground was more acidic.

These are all from 4-6" depths, 1970's-2012

You will get the what look to be tarnished CA clad and older clad from the years where the composition differed that did turn a grungly orange like color, like US clad coins.
What I am saying is the Ca clad coins for the most part look clean and spendable without having to take a second look at the coin and start asking questions. If you are from the US,
you know what I mean.
Some of my finds



After a 15 minute tumbler CA clad for the slightly tarnished looking ones, looks pretty damn good.
Pix bottom of page.
[www.treasurelinx.com]


Typical US coins after being in the ground


Pennies dug here in Canada are no diff than if found in the US.

DeepTech Vista X with 3 search coils.
Works for me

Gresham's Law still applies here, and that should tell you all you need to know.

Here's a really interesting paper on Gresham's law and monetary theory in general.

[www.columbia.edu]

The basic idea is that if two coins have the same face value but different metal values, the one with the higher metal value will disappear through hoarding, smelting or export. Some interesting examples are:

In the US, silver coins have all but vanished. The presence of Federal law prohibiting smelting of these means that most are being hoarded. The same is true to,a lesser extent of copper pennies and our nickels.

In Scandinavia, governments have recalled low face value copper and copper-nickel coins, either eliminating coins of low value or issuing newer, smaller coins for the higher values. The governments, in turn have "obeyed" Gresham's law, selling the old (and now no longer legal tender) coins as metal scrap.

Cash becomes illegal

Consider Italy Intensifies Its All-Out War on Tax Evaders


In addition to banning cash transactions, [Italy] has included an ad campaign comparing tax evaders to parasites. There have been headline-grabbing raids on stores, hotels and restaurants in affluent Italian cities. For good measure, tax officials have also been stopping luxury cars and asking drivers to show their licenses, then using the information to pull their most recent tax returns.

Recently, best-selling financial author and well-known investor, Doug Casey, offered his perspective on this issue by pointing out that “governments hate cash for lots of reasons…it costs a couple of cents to print a piece of paper currency, and they have to be replaced quite often. As the US has destroyed the value of the dollar, they’ve had to take the copper out of pennies, and soon they’ll take the nickel out of nickels. Furthermore, with modern technology, counterfeiters—including unfriendly foreign governments—can turn out US currency that’s almost indistinguishable from the real thing. And the stuff takes up a lot of space if it’s enough to be of value. So sure, governments would like to get rid of tangible currency. They’d like to see all money kept in banks.”

Canadian Mint produces coins for a multitude of countries

[www.coinscan.com]

[www.mint.ca]

[www.coinweek.com]

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