Does this new regulation strike you as somehow wrong – and a case of overreaching by government?

People who melt pennies or nickels to profit from the jump in metals prices could face jail time and pay thousands of dollars in fines, according to new rules out Thursday.

Soaring metals prices mean that the value of the metal in pennies and nickels exceeds the face value of the coins. Based on current metals prices, the value of the metal in a nickel is now 6.99 cents, while the penny's metal is worth 1.12 cents, according to the U.S. Mint.

That has piqued concern among government officials that people will melt the coins to sell the metal, leading to potential shortages of pennies and nickels.

"The nation needs its coinage for commerce," U.S. Mint director Ed Moy said in a statement. "We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers."

There have been no specific reports of people melting coins for the metal, Mint spokeswoman Becky Bailey says. But the agency has received a number of questions in recent months from the public about the legality of melting the coins, and officials have heard some anecdotal reports of companies considering selling the metal from pennies and nickels, she says.

Under the new rules, it is illegal to melt pennies and nickels. It is also illegal to export the coins for melting. Travelers may legally carry up to $5 in 1- and 5-cent coins out of the USA or ship $100 of the coins abroad "for legitimate coinage and numismatic purposes."

Violators could spend up to five years in prison and pay as much as $10,000 in fines. Plus, the government will confiscate any coins or metal used in melting schemes.

The rules are similar to those enacted in the 1960s and 1970s, when metals prices also rose, the Mint said. Ongoing regulations make it illegal to alter coins with an intent to commit fraud. Before today's new regulations, it was not illegal to melt coins.

Now hold on – is the money MY money, or the government’s money? Do the coins belong to me, or to the government? What about the metal the coins are composed of – my property or the government’s? And if the answer to these question is that it is my property, where does the government get off penalizing my decision on how to dispose of the coins and their metal content?

Posted by: Greg at 02:07 PM | Comments (1) | Add Comment
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