"Altruistica": Seeking a return to full financial disclosure and regulatory oversight. A financial market analysis blog for "entertainment purposes" only by an experienced CFA seeking new hedge fund engagements for investment writing and analysis. The author has experience investing internationally, running a hedge fund, making angel investments, and helping launch five startup companies. Investors should do their own due diligence.

16 December 2006

Dollar Collapse Directly Ahead

Dollar danger directly ahead

Last Wednesday the NYT reported an event that few noticed, but has immense historical significance. The United States Mint, concerned that rising metal prices could lead to widespread recycling of pennies and nickels, has banned melting or exporting them.

For those of you not familiar with economic history this probably doesn't mean much to you (hence the lack of public attention). But those of you that are familiar with historical currency exchange controls, this story is as old as empire. The only difference in this case is that historically this involved precious metals. Today the dollar is worth so little that it involves base metals.

Until 1982, pennies were made of 95 percent copper. The commodity metal value of one of those coins, which still make up a large percentage of the pennies in circulation, is 2.13 cents, according to the Mint.


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