(Mike Maharrey, Money Metals News Service) The government killed the penny. RIP.
It was tantamount to shooting the messenger.
On Wednesday, the Philadelphia Mint produced the final five circulating pennies.
The Treasury stopped mass-producing pennies months ago after President Trump passed a death sentence, ordering an end to the venerable 1-cent piece earlier this year. However, an unspecified number of pennies were struck with an Omega symbol to signify that they are the last of their kind. The final five pennies produced in Philly were part of that batch, and they will be auctioned off next month.
U.S. Treasurer Brandon Beach was in Philadelphia to witness the execution.
Trump passed a death sentence on the penny in an announcement in February, citing the rising cost of manufacturing the 1-cent coin.
“For far too long, the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!”
Trump went on to say he is going to rip the waste out of the U.S. budget “even if it’s a penny at a time.”
According to the U.S. Mint, it costs 3.69 cents to mint and distribute one penny.
In 2024, the mint produced 3.2 billion pennies and lost about $85.3 million in the process. That was over half of the new coins minted last year.
They Shot the Messenger!
So, what happened to the penny?
Well, it’s not worth anything anymore. You might still be able to give a penny for somebody’s thoughts, but that’s about it. You can’t even get a penny gumball these days.
One cent has become virtually irrelevant in today’s financial system. The greenback has devalued so much that the value of 1/100th of a dollar is approaching zero. It’s worth about as much as the lint in your pocket.
How did this happen?
The government is destroying your money.
Simply put, the government and its enablers at the Federal Reserve have printed the dollar into oblivion. The more dollars they create, the less each dollar is worth.
And they have printed a lot of dollars.
Since 2008, the Fed has created over $8 trillion through quantitative easing alone.
The results were predictable.
Based on the CPI, prices have increased by over 713 percent since 1970. That penny gumball you bought as a kid would cost about 8.1 cents today.
Keep in mind that the CPI doesn’t tell the entire story of inflation. The government revised the CPI formula in the 1990s so that it understated the actual rise in prices. Based on the formula used in the 1970s, CPI is closer to double the official numbers.
On the other side of the coin (pun intended), production costs have gone up due to this same inflationary pressure. Put into perspective, it’s no wonder it costs so much more to produce a penny than it’s worth.
The bottom line is, every time you pick up a penny, it’s a reminder of Uncle Sam’s monetary malfeasance. Instead of actually solving the problem (i.e., end the borrowing, spending, and money printing), your drunk uncle just shot the messenger and sent the penny to its grave.
This isn’t the first time the government has taken steps to obscure its monetary destruction.
In 1982, the mint removed most of the copper from the penny. Before that year, pennies were composed of 95 percent copper and 5 percent zinc. Due to rising copper costs (a result of inflation), the mint changed the composition to 97.5 percent zinc with 2.5 percent copper plating.
The government devalued silver coins nearly two decades earlier.
Under the Coinage Act of 1965, signed by President Lyndon B. Johnson, the U.S. Treasury removed all the silver from dimes, quarters, and half-dollars. Instead, the government mints coins from “composites, with faces of the same alloy used in our 5-cent piece that is bonded to a core of pure copper.”
Today, you will sometimes hear coins minted before 1965 referred to as “junk silver.”
In reality, we should call modern American coins junk.
The demise of the penny is another example of the same phenomenon.
When Johnson signed the Coinage Act, he insisted that removing silver would have no impact on the value of U.S. coinage.
“[The] Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin,” he said.
Just a few years later, President Richard Nixon made a similar claim when he cut the final tie to the gold standard. He said, “Let me lay to rest the bugaboo of what is called devaluation,” and promised, “Your dollar will be worth just as much as it is today.”
Both men were lying.
When you disconnect money from anything of tangible value, it is going to quickly depreciate. It’s as certain as death and taxes.
And that’s exactly what happened.
This currency debasement is ongoing. They killed the penny. What goes before the firing squad next? The nickel?
The way things are going, it’s only a matter of time.
This is why you want to have real money – gold and silver. It will not be devalued by government action and can hold the value of your wealth over time.
Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
