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Heh.. that's funny. I promoted the exact same idea on Twitter a couple of months ago. (Though to be fair the idea almost certainly isn't original to me either).

So, the first thing I did was divide 20 billion pennies by the Canadian population of 35 million, and came up with $5.70 per person in pennies. That sounded ridiculously high, so I checked the mint's data: http://www.mint.ca/store/mint/learn/1-cent-5300004 and saw they have been printing (I mean coining) close to 1 billion per year for the last 10 years (since they switched to a mostly steel penny), and comparable numbers before that. So even if the mint withdrew and melted down some of the 1997-2000 zinc pennies, or the pre-1997 copper pennies, that number looks about right.

That's ridiculously high. That amount of pennies would weigh a ton (OK, 1.3kg to be more precise) if we carried them around. Those pennies must be just sitting in jam jars, or down the back of sofas, or, more likely, lost and waiting for future archeologists to find (I am always amazed at the number of coins UK archeologists seem to find).

Sample of one: I have 210 grams of pennies just sitting in a jar, which is about 85 pennies (the older ones weigh around 2.5g each, and 2 in my pocket which I will actually use.

The 2 in my pocket were 2007 and 2010. The ones in the jar were about 50% from the 1980's, 40% from the 1970's, and the rest too hard to read, US pennies, etc..

Here's another way of looking at it: they are printing (damn, coining) about 30 pennies a year for each of us.

My father bought a lot of metal washers to repair barn roofs after a near-hurricane in the 1980's. He noticed that each was about the size of a UK 2p coin, but cost more than 2p. He said afterwards he wished he had just used 2p coins, since they would have done the job just as well, and cost less.

Nick: Fair cop on the number of pennies, I was feeling lazy so just cited the first source on google. The reason I was suspicious of that 20 billion number was that it gave me a total cost figure that didn't fit the Canada=US/10 rule (to get a Canadian number, get a US number and divide by ten). On the other hand, if you use Canada=US/10 you get an estimate of $0.6 billion, which is the same order of magnitude as $1 billion.

Mike: To be fair to Bauman, he didn't claim he was being original. But he was very funny.

Frances: no cop at all. From the mint data, 20 billion pennies looks about right.

But it does look high from the number we would normally have in our pockets, even if we allow that retailers will have some. Even then, I can't believe the Loeb Cafe has more than 20 pennies in the till on average. I sometimes see them break open a new roll. Must ask how many rolls they break open per day, on average.

For currency, the usual 10 to 1 rule becomes nearer to 20 to 1. Presumably because foreigners hold USD and not CAD. But foreigners probably don't hold a lot of US pennies; more like $100 bills.

Nick, but it takes a really determined effort to get rid of pennies. About once a year or so we have a family coin campaign, gather everyone's surplus coins, roll them up and cash them in. I think the last one netted around $40 or so (including quarters and loonies) and took about an hour or two.

To give you some estimate of the cost of cashing pennies - there's a machine in the local supermarket that you can just dump a whole load of coin into, and have it converted into bills. The catch: there's a 10% charge on doing so. I see people using this machine not just for pennies and nickels, but for quarters, as well.

From a very early post:

When I was younger, I would occasionally get irritated waiting in line at a cash register while an older citizen sorted through a handful of coins to pay the exact amount. After all, it was faster to pay with notes and let the cashier - who had the various coins in a conveniently-arranged tray - handle the change. Why didn't they do what everyone else did?

Now that I'm a bit older, I know why: after a couple of decades of dumping handfuls of change into a bowl on their dresser, they've accumulated approximately 3.94 metric tonnes of coins, and they'll be damned if they'll sit down to roll it all up and haul it to the bank.

Actually if pennies were then re-used as nickels, the mint wouldn't have to coin another nickel for years, and could replace the more expensive nickel with the cheaper pennny, so perhaps the cost of a penny promotion would be close to $0.6 billion?

"Mike: To be fair to Bauman, he didn't claim he was being original. But he was very funny. "

Bauman is amazing - I really enjoy his stuff. I'm just flattered we had a similar idea.

"To give you some estimate of the cost of cashing pennies - there's a machine in the local supermarket that you can just dump a whole load of coin into, and have it converted into bills. The catch: there's a 10% charge on doing so. I see people using this machine not just for pennies and nickels, but for quarters, as well."

A lot of TD branches have these machines that you can use for free, though I don't know if you have to be a TD customer or not.

"there's a machine in the local supermarket that you can just dump a whole load of coin into, and have it converted into bills. The catch: there's a 10% charge on doing so. I see people using this machine not just for pennies and nickels, but for quarters, as well"

So the bid-ask spread for coins is actually wider than for most OTC stocks.

Hmm, Andy that's a really, really good point. Does it mean Nick's been wrong all those times he asserted that money is the most liquid of all asetss or does it mean coins aren' t money?

Adam: what's most liquid depends on what you're buying. I wouldn't try to buy a house with quarters, but they work well for a cup of coffee.

But yes, the fact that I've got far more pennies sitting in a jar than in my pocket does suggest that the penny's status as a medium of exchange is debatable.

Nick - 20 billion sounds high if you think of the pennies as being distributed amongst people, but I have a hunch that a significant number of those are rolled up in vaults at bank branches, so I would suspect that the principle beneficiary of a pennies-to-nickles conversion would be the banks rather than any individuals.

Of course, as soon as the government announced that they were considering a conversion like this, people would start hoarding them, businesses would stop giving them as change, and an interesting market in penny speculation would develop.

Getting rid of the penny is an appeal to logic over emotion.

Trouble is emotion is a stubborn thing. People are taught in kindergarten that the penny is the basis of our coinage system. Get rid of it and the system looks foolish. Plus nobody wants to admit that a penny can't buy anything and inflation has taken a real toll. Watch the 40+ set wax lyrical about pennies.

On the other hand I say get rid of the dead-weights.

http://www.parl.gc.ca/40/3/parlbus/commbus/senate/com-e/fina-e/rep-e/rep08dec10-e.pdf

it better happen.

Australia (decimal currency adoption 1966) has dropped the 1 and 2 cent coins and the lowest denomination coin in circulation currently is 5 cents. This is counterbalanced by the size of the coins that remain! I suspect Australia's relatively large coins come from being a major mining exporter.

New Zealand adopted decimal currency in 1967, see the reserve bank reference http://www.rbnz.govt.nz/currency/money/0094086.html
and removed the 1 and 2 cent coins in 1990. The 5 cent coin was dropped in 2006, the lowest denomination is now 10 cents. New Zealand also changed its currency to smaller lighter coins, they used to have the same size and weight as Australia but currency union didn't occur.

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