Nickels Cost More to Make Than They're Worth

The story of the nickel starts in the first US mint founded in 1792 which produced these 5-cent pieces along with other coins including the quarter dime penny and a mystery coin we'll get back to later. Nickels weren't known as nickels then cuz nickels weren't made of nickel yet. They started made of silver mostly same as the 10-cent dime. So this 5-cent coin was called the half dime. But two forces conspired to ensure the protokeic wouldn't stay made of silver for long. First the value of silver went up and second inflation pushed buying power down. By civil war times, the lines crossed and the value of silver in the 5-cent coin was greater than 5 cents. The coins were worth more dead than alive, so people melted them to sell the silver at a profit. To stop this, the mint switched from making the coin with silver super valuable to nickel, not so much. Renamed it the nickel to make it clear the new coin wasn't worth melting down. And everything was fine, but only for a time. Because again, the value of the metal in the coin continued to go up while inflation pushed the buying power of 5 cents down. way down for the next century until a nickel was worth nearly nothing compared to its silver start and thus even the value of the nickel in the nickel grew greater than 5 cents. So again, people melted them down for profit. At this point in an economically efficient world, the story of the nickel would have ended here with the government realizing after two centuries of inflation, the coins weren't worth minting no more and happy its citizens were profitably removing them from circulation. But instead, the government made melting US coins illegal and continued to mint nickels at negative value. Currently, it takes 5 12 cents of nickel to make a 5-cent nickel. Bad enough, but the cost of creating a coin is not just in the metal to mint it, but also in running the mint to print it. The molds, the machines, the manpower, the management. It all adds up to spending 14 cents to make a nickel. And the government makes 1. 5 billion nickels a year, which doing the math creates $75 million of nickels at a cost of $210 million. a loss of about $135 million a year incurred by the government as it literally prints money which if anything should be profitable it's printing money. So if you are losing money while this cannot be emphasized enough literally printing money you should literally stop as with the 1 cent penny cost to make 2 cents. If killing a coin because it loses 1 cent to make is a good idea than killing the nickel which loses 9 cents per coin is a better idea times nine. And it's not just about saving money. There's a better reason to get rid of the nickel. It's no good at its only job being money. Reminder, governments print physical money to make buying and selling stuff with cash easy for their citizens. that at bare minimum requires each part of that cash to be worth handling, which back in the olden days, a nickel alone was valuable enough to buy stuff on its own. Nickelodeon is the oldtimey term for a movie theater, which got the name because the price of entry was a nickel, but that is no more for sure. Now, a nickel buys you nothing. Vending machines refuse to take them, so there's nowhere to spend them, leaving the nickels only use for making exact change. But the time it takes to fiddle to find a 5-cent piece in a pocket is probably net negative. And if there's a line, guaranteed net negative on everyone's time. So nickels have nothing going for them. They lose money in the making and handling, making them make no sense as money at all. It's time to nyx the nickel. But if you're worried cutting a coin could have consequences, don't. America has done this before. The mystery coin mentioned at the start, that was the half cent. Seen one lately? Of course you haven't. It was discontinued in 1857 for being worth too little to bother with. But when the half cent met its fate, it had more buying power than today's dime. America seems to have forgotten that it's okay to stop making coins when they're no longer needed. She did it with the halfsent and she also trime, a three cent coin you've also never seen because once it solved the problems it was created to solve, that's a whole other story. America simply stopped making them. So if America could stop making the chime and the half cent without problem back then, America can stop making the half dime now too. Nyx the nickel. The only effect will be rounding transactions to the nearest 10, simplifying the change, saving time while saving $135 million a year to do so. Although if you think about it, there would be one little quirk with getting rid of the nickel in a post penny America. for only the quarter and dime would remain as common coins and rounding cash transactions to the nearest 10 would make spending a single quarter or three quarters impossible for they both end in five a ghost of nickels past. You could only actually spend quarters two at a time. Very strange, but try to fix that by rounding to the nearest five and that makes the amounts under a quarter. Five and 15 also impossible to pay. So what to do? There are options too. Option the first is just kill the quarter two and deal only with dimes. Maybe bring back the half-dollar nearly forgotten now as it's minted in amounts only for new mismatists. With those two coins, all change could round to 10. Nice and tidy.

But boy would that be annoying for the half-dollar is huge and the dime tiny, almost the smallest coin ever minted with the exception of the trime from before. Partly killed for its annoying size not that far off from the dime. So option the second is to keep the quarter. Not only is it the most American of coins, most countries divide their money by fifths to get 20, not fours to get 25. So, America is by far the biggest economy to have quarters. And quarters have gotten all the cool designs, probably because quarters are obviously the most useful coin by far, still just valuable enough for some small purchases and accepted by millions of machines of all kinds. It's also the most cost-effective coin to make, so money can be made literally making this money. How refreshing. The quarter is great. So what if instead to straighten out this strange change, we for once try to solve a problem before it's a problem and just ditch the dime ahead of its time. There's no need to wait until inflation drives the dime's value down until it's not just worthless, but worth less than zero. We can get ahead of the inevitable. And while ditching the penny and nickel, ditch the dime, too. Keep only the quarter and have the world's best, most simple, uniquely American change system. And if your final worry is that rounding to 25 will be too big of a jump, again, back when the penny was first printed, it had more buying power than the quarter does today. At a time when all transactions had to be cash. So, if it wasn't a problem then, it really won't be a problem now. So, let's do solution the best. America keeps her quarters, but with the penny past its prime, it's next up to nicks the nickel and maybe, just maybe, ditch the dime ahead of its time. Oh, hey, you've made it to the end of the video, past the fake end of the video. Welcome and congratulations. Since you're here, what started as a quick and easy update to my old Death to Pennies video, of course, had me coming across a story where I couldn't stop myself. the Trime, the strange three cent coin mentioned in the video created to solve a triple threat to American currency security that I just had to write up into a bonus video as a thank you to all of the Bonnie Bees who support this channel. If you're interested to find out why the tribe was created, what it had to do with the Spanish Empire, and the mail, then you can click here to sign up to become a Bonnie B and find out and also get access to a whole other bunch of bonus content. Quarters are great, but do we even really need coins?