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The E-Sylum:  Volume 9, Number 17, April 23, 2006, Article 18

JOHNSON'S PREDICTION: NO U.S. CENT COIN IN 2010

Dick Johnson writes: "I can remember only once before that a
Lincoln Cent story made the front page of the New York Times.
In Saturday’s (April 22, 2006) NYT the story of the rising cost
of striking a cent was indexed on page 1, with a color illustration
of the Lincoln Cent.

The full NYT story with three charts was inside (p C3, see above
article). Floyd Norris wrote about the mint’s mounting problem
of rising cost of zinc and copper, the U.S. cent’s two metal
components. The cost of these two metals in a cent crossed the
line of profitability, according to the major chart in that article,
about October 1, 2005. But the U.S. Mint is not losing money. Yet!

The mint had contracts in place with the supplier of the cent
blanks – the mint buys the copper-plated zinc blanks from private
industry – it then strikes the image in its coinage presses creating
the cent coins. In all likelihood these firms hedged their zinc
bullion purchases when those contracts were last signed. So they
are not losing money. Yet!

However, this cannot last past the end of these contracts. If the
cost of zinc is still above 80% of a cent when these contracts
expire, THEN the mint will lose money by continuing to strike a
cent in the present composition.

The problem has to be solved by the U.S. Congress. Knowing how
fast Congress reacts, I see the cent being struck through 2009 –
the year legislation is already in place to have the cent with
four different reverses (see E-Sylum vol 8, no 50, a 19). There
are those that see these coins as commemoratives in which a
surcharge could be added to their cost to the public. Most
numismatists see these as circulating coins, like the current
Jefferson nickels with three Lewis & Clark reverses -- intended
for circulation.

I predict we will have cents until 2009. But THEN the cent coin
will be abolished. We will have no cent coins of 2010.

Next week: How the cents can go out with a bang."

  Wayne Homren, Editor

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