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US Money Reserve’s Phil Diehl Gives a Penny For His Thoughts
In an recent interview with CNBC Squawk Box, US Money Reserve’s President Phil Diehl cites logical reasons to do away with the penny as currency. The most obvious reason he mentions is that the penny costs more to make than it’s worth. Although minted by the Federal Reserve, the actual molds are filled by private companies using zinc, not copper.
As only 25% of monetary transactions are made with cash, doing away with the penny will not cause economic problems, as some penny advocated maintain. Most of those fighting to keep the penny flowing in our currency are zinc traders and Illinois academized ratings , who favor keeping the penny as it displays President Abraham Lincoln’s image.
Mr. Diehl expertly addressed the interviewer’s questions about price changes that could occur as the result of doing away with the penny. Many items are sold at prices such as 2.99 or 3.99, and if the penny is abolished, won’t prices go up? The US Money Reserve President pointed out that due to our free market system, companies have always had the power to raise prices and will have the choice to mark their prices up or down with little difference. The same answer holds true for inflation, where proponents of keeping the penny suggest that taking the penny out of circulation will press inflation, which according to Mr. Diehl is not a real concern.
The cost of minting pennies adds up to big dollars, approximately 105 million dollars per year! Doing away with the penny will provide substantial savings for the government.
When asked by the interviewer if the nickel is the next target, as it also costs money to mint, Mr. Diehl advised that there are some cost effective ways to change how nickels are produced, but the penny is a lost cause at this point in time.