The Mile High City: Penny for your thoughts? (2/2)


“Gold is money. Everything else is credit.”

J.P. Morgan

State 24: Colorado - December 18, 2017

Nate

We woke up at a Walmart in Denver having had a great night sleep. The first task of the day was to drive across town for the Cross Country Couple’s, "Made in the USA" tour; The Denver Mint. Please see the pictures below.

The Denver Mint is a branch of the United States Mint which produces US coins for circulation. The mint does not print paper money, and does not produce bullion products! Striking it's first coin on February 1, 1906, the Denver Mint is the oldest continually operating mint in the US! All pennies, nickels, quarters, half dollars, mint sets, and commemorative coins struck at the Denver Mint bear the D mint mark to signify their origin. The Denver Mint is the single largest producer of coins in the world, and in 2000, set a world's record producing 15 billion coins in a single year!

Although the tour was free, it was quite the ordeal to get inside. First, we had to go to a box office outside of the gift shop to reserve tickets for a predetermined tour time. Next, we lined up 30 minutes prior to the tour on the sidewalk outside of the mint! 10 minutes prior to the beginning of our tour, a very large man with a very large gun, and a very stern demeanor came out to tell us the rules of the tour! One of the rules was no photography! Next, we were each individually led through airport style security! Shoes off! Belt off! Everything out of your pockets! All belongings scanned! Walk through a metal detector! Spread and scanned by a wand! Bend over and cough! LOL! I know we were entering a US Mint, but the security seemed a tad over the top considering they only produce pocket change! Even if I did come to steal their coins, how many pennies can one human physically carry?

After successfully making it through the security, we were led into a large and interesting room with displays and artifacts depicting the history of money. After watching a brief movie, our guide joined us, and he was quite the character! The one liners came fast and furious; “This mint is the only branch of government which makes any cents (sense)!”, and my personal favorite, “The Denver Mint is pleased to announce the release a new quarter to commemorate Texas. It will be double the size of a normal quarter, because everything is big in Texas!”. I would not have been surprised to learn he was just moonlighting at the Mint until he got his big break in show biz!

It was interesting to see the massive machines which make the coins we use every day. The process of coin making begins with the metal. The metal is alloyed by a refinery to the exact specifications approved by Congress for each coin. In case you are like myself, and have an inquiring mind: A penny is 2.5% copper, and 97.5% zinc, a nickle is 25% nickle, and 75% copper, and the dime, quarter and half dollar are all 8.33% nickle, and 91.66% copper. Next, the metal alloy is rolled out into sheets to the predetermined thickness, which is also approved by Congress. I will spare you the list of the thickness of each US coin! The sheets of metal are rolled back up, and shipped to the Denver Mint. When the rolls of metal alloy arrive, it's chemical composition and thickness are verified, and then the real fun begins! The rolled metal is unrolled, fed into an automatic coin press, and out the other side comes money! The newly minted coins are rolled, boxed, placed in large bags, and sent to the 12 federal reserve banks throughout the country. Your local bank orders the amount of coinage it needs to conduct business from the Federal Bank. When the coins arrive, the bank provides me with the quarters I need to pay the meter to park Rosie so I can tour the Denver Mint! Ha ha, you get the idea!

The US Mint does not receive a single dollar in federal funding from the US government! Why? Because they have the legal authority to make money!!! Every penny cost 1.66 cents to make! Every nickle cost 8.9 cents to make! This is the reason the national headlines are calling for the elimination of the penny and nickel since they cost more to mint than their face value! However, that only tells half of the story! It only costs the Mint 3.91 cents to make a dime (150% profit), and 8.95 cents to make a quarter (a 273% profit)!!! This is why the state quarter program was initiated. The mint wanted people to collect quarters to take them out of circulation. Therefore, more quarters would be needed to conduct business, and they could mint even more. The quarter is the US Mint's most profitable product! Despite the money the mint loses on pennies and nickels, they make billions and billions of dollars in profits each year minting dimes and quarters! I could not help but laugh when I saw a change machine in the gift shop! For every dollar bill I put in the change machine, I get 4 quarters back, which cost the Denver mint 35.8 cents to make!!!

This entire process seems very practical, efficient, and even perhaps a shining example of capitalism at it's finest. However, there is a HUGE flaw in the system! In one side of the coin press an alloy metal is fed, which has no inherent value besides the minuscule amount it sells for in scrap. Out the other side of the coin press, money is created out of thin air, which still has no inherit value besides the minuscule amount it sells for in scrap! The only value US money has is the public's perception of value! Please read that last sentence again, because it is very important to understand! When the public no longer has any perception of value for the US dollar, then the only value a US coin has is it's minuscule scrap value, and the only value US paper money has is as toilet paper! Perhaps you don’t believe me, or think it could never happen in America? In that case go to your nearest gas station, and attempt to fill your tank with civil war currency from the Confederate States of America! Good Luck! Today, all money is backed by nothing except the public’s perception of value, and by the full faith and confidence of the US government! The very same government, which is 21 trillion ($21,000,000,000.00) dollars in debt!!! To hell with the cost to mint a penny, where are the national headlines on this late breaking news story!

However, US currency wasn’t always printed without inherent value. Until 1964, all dimes, quarters and half dollars were minted with 90% silver, and until 1933, $20, $10, $5 and $2.5 dollar coins were minted in 90% gold. A 1933 $20 coin has inherent value because it contains approximately one ounce of gold. Today that same 1933 $20 gold coin is worth $1,300 solely on it's gold content. Whereas, today a $20 paper bill from 1933 would buy you a pizza, because it had no inherent value! There is only a finite amount of gold and silver in the world, which limited the amount of money the government could make. Today, there is no inherit value in any US currency. There is absolutely nothing stopping the US government from minting as many coins, and printing as much paper money as it desires! The results have been catastrophic!!! Since the US stopped using gold to back it's currency in 1933, the US dollar has lost 98% of it's value!!!

Gold is the unit all other world currencies are measured against. Today, $1,314.23 US dollars will buy an ounce of gold, and so will 150,494.86 Japanese Yen. Like a gallon, liter, or pint, gold is a unit of measurement which remains constant. While it may appear the value of gold is rising or falling, it is actually the value of un-backed government currency, which is going up and down. According to the law of supply and demand, the more money a government prints the lower it's value! However, this process of currency devaluation goes by a more socially acceptable term: inflation! Many actually believe inflation is normal and necessary for a healthy economy! I on the other hand believe government driven inflation by currency devaluation is nothing more than a backdoor tax! Inflation slowly robs hardworking Americans of their life savings over time, and is the cruelest tax of all!

After departing the Denver Mint we drove 11 miles South to Littleton where we found a Walmart to spend the night.

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