Just how much does it cost to make a penny?

[Chex]

From Just how much does it cost to make a penny?

How much does it cost to print a $1, $5, $20 or a $100 note?

Cost of Production

$1 and $2 5.4 cents per note
$5 10.1 cents per note
$10 9.2 cents per note
$20 and $50 10.2 cents per note
$100 13.1 cents per note

Courtesy of the Federal Reserve Banks: How much does it cost to produce currency and coin?

The real question what's backing it? The full faith and credit of the U.S. Government. Feel any better now?

Since 1971, U.S. citizens have been able to utilize Federal Reserve Notes as the only form of money and for the first time had no currency with any gold or silver backing.

This is where you get the saying that U.S. dollars are backed by the "full faith and credit" of the U.S. Government. In other words, Nixon implied take our paper dollars or don't.

What does a dollar or Federal Reserve note represent now that gold and silver no longer back any of the currency printed in the U.S.?

From the Treasury; “Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything.

Redeemable notes into gold ended in 1933 and silver in 1968.

The notes have no value for themselves, but for what they will buy.

In another sense, because they are legal tender, Federal Reserve notes are “backed” by all the goods and services in the economy.”

From the Most Replied

@Dane the Fed was created because John Pierpont Morgan after bailing out the US financial institutions three times, was thought to have too much power and wealth. The Federal Reserve was created in 1913 to stop the gain of power by banks and people like J P Morgan, along with the Clayton Antitrust Act of 1914.

@ Dane what was John Pierpont Morgan bailing out the US financial institutions three times with what?

[Chex]

For S&Giggles I thought I add this in

Penny to Paper: How Much Does It Cost to Make U.S. Currency?

Attachment 2083

[Brian]

Yes and the Fed gets the seigniorage from issuing the FRN's. This seigniorage is part of the profit that is turned over to the Treasury less the 6% dividend kept tax free for the owners of the Fed. The Treasury then gets to tax all of those who used the notes to circulate as money in order to prevent the over supply of currency not issued directly by the Treasury.

On the flip side of that IF one were to be paid in say dollar coins. The Treasury would realize a potential 70+ cents of direct seignoirage for every dollar it supplied to the Fed to make up for you getting paid in coin. The Fed has to pay the Treasury 1 dollar of credit for a 1 dollar coin. The mint makes dollar coins for roughly 30cents of cost. The Fed's 6% dividend is reduced by this type of transaction.

Perhaps this is the reason they suspended making boat loads of dollar coins a few years ago. Not because the Fed was pissed that they had to store them in new warehouses but because it eats their profits.
http://usatoday30.usatoday.com/news/...ins/54005900/1

[allodial]

The article might be biased and overly simplistic. There is a thing called seigniorage. Paper currency and coins have a markup called seigniorage (electronic money does too). In 2002 AFAIK pennies pulled in around $24M rather than a loss for the U.S. Mint. The cost of copper has gone through the roof, thusly it would make sense that the penny's cost of production went up. The taxes generated from a penny circulating for fifty years ought not be disregarded.

P.S. Pennies, nickles, quarters and dimes still work even if electric power systems go out. Perspectives.

[shikamaru]

The real question what's backing it? The full faith and credit of the U.S. Government. Feel any better now?

Since 1971, U.S. citizens have been able to utilize Federal Reserve Notes as the only form of money and for the first time had no currency with any gold or silver backing.

This is where you get the saying that U.S. dollars are backed by the "full faith and credit" of the U.S. Government. In other words, Nixon implied take our paper dollars or don't.

What does a dollar or Federal Reserve note represent now that gold and silver no longer back any of the currency printed in the U.S.?

From the Treasury; “Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything.

Redeemable notes into gold ended in 1933 and silver in 1968.

The notes have no value for themselves, but for what they will buy.

In another sense, because they are legal tender, Federal Reserve notes are “backed” by all the goods and services in the economy.”

Legal tender is binding on creditors, not debtors.

You could offer fish for exchange and settlement. If the creditor accepts, why not?

From the Most Replied

@Dane the Fed was created because John Pierpont Morgan after bailing out the US financial institutions three times, was thought to have too much power and wealth. The Federal Reserve was created in 1913 to stop the gain of power by banks and people like J P Morgan, along with the Clayton Antitrust Act of 1914.

@ Dane what was John Pierpont Morgan bailing out the US financial institutions three times with what?

Me thinks someone needs to read "The Creature From Jeckyll Island"

Morgan was in on the FRB.