Well, is it time to say goodbye to the penny? According to Philip Diehl, The president of U.S. Money Reserve says yes. His one reason is, most people do not care about the penny anymore. Most people toss the penny to the ground when they have them. The other reason is that is costs more to make the penny that the penny is worth. However, the same can be said for the nickel as well. He also said that they can make the nickel more profitable or close to profitable. The penny is lost beyond all hope. In fact, the penny is no longer made of 100% copper. It is made of 97.5 percent zinc.
Philip believes that companies will round down their prices if the penny was eliminated and does not feel may would be affected by this. He also believes that competition in the market place will discipline companies not to increase prices. When questioned during his interview on CNBC Squawk Box about companies such as McDonald’s raising their prices by one penny, he felt that companies would be possible for companies to round down their prices. Why would you irritate a customer over a penny? He feels eliminating the penny does not create a new situation because companies could raise their prices regardless if the penny stays or goes. Philip Diehl says that eliminating the penny would reduce the budget by 105 million dollars, but the interviewer says that seems in the grand scheme of things. When asked who was on the other side of the argument, who was all for keeping the penny. Diehl did not give a direct answer immediately. He simply states that the coin blanks are outsourced and the mint only stamps the coins, bags them, and sends them to Federal Reserve. He did mention the zinc lobby and zinc industry are primarily interested in keeping the penny alive. Additionally the Illinois Congressional Delegation protects it because it is the seat of the American coinage with Abraham Lincoln. So the question remains, is the penny on its way out, not right now.