EU considers withdrawal of 1 and 2 euro cent coins

EU Observer ^ | 15.05.13 @ 09:29 | Valentina Pop

[Olog-hai]

The European Commission on Tuesday (14 May) tabled several scenarios for the withdrawal of the 1 and 2 euro cent coins, with the cost of minting these coins greater than their use.

“The production of 1 and 2 cent coins is clearly a lossmaking activity for the euro area, with the difference between the face value of the coins and the price paid by the state to get them pointing at an estimated total cumulative loss of €1.4 billion ($1.8 billion) since 2002,” the commission said in a press release.

Public opinion about the 1 and 2 euro cent coins is “rather paradoxical”, says the commission, referring to various Eurobarometers. On the one hand, people seem attached to these coins and fear inflation should they disappear. But on the other hand, they do not recirculate them. …

[Atlas Sneezed]

It’s time once again to trot out my currency and coinage reform proposal.

Given that there has been ample inflation on the order of 10 since the last change, and we have an excessive array of confusing coins and low-value currency, it is time for a practical simplification.

First, denominations need to proceed in a proportional way without large value ratios or crowded ratios. The classic 1-5-10-50-100... progression with ratios of 2.0-5.0 is ideal as a minimum, with denominations of 2, 20, etc. being optional for important valuations.

Second, we want to avoid coins of such low value that they are more trouble than they are worth. Economic waste occurs with the extra time wasted dealing with needlessly small coins. A dime is worth less than a minute of labor at minimum wages, and no currency transaction requires anything smaller than this denomination. The penny and the half-cent served well as the smallest denominations when their values were that of today’s dime. (Note to any economic imbeciles: electronic transactions are often conducted in smaller units than our smallest coin, and that cash registers have been “rounding” - without bias up or down - to the nearest small coin for sales tax purposes for generations. Google “sales tax rounding” if you have doubts and read a few articles).

Third, we want to set the coin/currency transition at a practical level that avoids our wallets being overstuffed with small bills, or our pockets with too many coins. Coins should be suitable for purchases like a magazine, a coffee, a lunch, or a brief cab ride.

Fourth, the ratio between the largest and smallest coin should be limited to a practical factor. Consider that the economy functions effectively with coins at 0.05, 0.10, and 0.25, with pennies treated as trash, and larger coins generally not used. That is a factor of 5 between the largest and smallest coin. A factor of 10-50 may be ideal, and a factor of 100 (as in actual current coinage) is excessive.

Fifth, we need bills of adequately high value for large cash purchases (consider the largest Euro note has a value of about 6.5 times that of the largest US note.)

Sixth, coins should be sized approximately proportional to their value for ease of recognition and use.

The proposal:

Coins:
$0.10 (slightly smaller than the current dime)
$0.50 (slightly smaller than the current nickel, larger than the penny)
$1.00 (slightly smaller than the current quarter dollar, larger than the nickel)
$5.00 (slightly smaller than the current half-dollar) Or it could be set at $2 to avoid overlap with a $5 note.

Currency Notes:
$5 (optional)
$10
$20 (optional)
$50
$100
$500

Our current 6 coins are replaced with 4.
Our current 7 notes are replaced with 4-6.

If you want to talk about making coins out of silver or gold, I’m even more enthusiastic:

$1000 gold coin (1 oz)
$500 gold coin (1/2 oz)
$100 gold coin (1/10 oz)
$20 silver coin (1 oz)
$10 silver coin (1/2 oz)
$2 silver coin (1/10 oz)
$1 copper or base metal coin (1/2 oz)
$0.50 copper or base metal coin (1/4 oz)
$0.10 copper or base metal coin (1/10 oz)

[Olog-hai]

You do know that the dollar has lost over 95 percent of its value since the advent of the Federal Reserve, right?

The euro is a different animal: it was deliberately set up as a fiat currency to make it fail, for political purposes. The goal there is to induce countries to give up their sovereignty to a central government.

[SeminoleCounty]

Better just to withdraw the entire currency

[Olog-hai]

That’d interrupt their grand scheme to rid EU member states of their independence and sovereignty. It’s literally the better thing to do, but the fanaticism of “Europhiles” has to be taken into account.