One funny effect of monetary inflation: ?New rules outlaw melting pennies, nickels for profit?

December 14th, 2006

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Today, this article filled our day with laughter: New rules outlaw melting pennies, nickels for profit.

Monetary inflation has now come to the point that the price of the metal in coins far exceeds the face value of the coin itself. Pathetically, the government then has to make up new rules in order to intervene into the free market. The justification for this new rule is:

?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.?

Against this excuse, we would like to point out what Murray Rothbard had to say in What Has Government Done to Our Money?:

On the free market, money can be acquired by producing and selling goods and services that people want, or by mining (a business no more profitable, in the long run, than any other). But if government can find ways to engage in counterfeiting, the creation of new money out of thin air, it can quickly produce its own money without taking the trouble to sell services or mine gold. It can then appropriate resources slyly and almost unnoticed, without rousing the hostility touched off by taxation. In fact, counterfeiting can create in its very victims the blissful illusion of unparalleled prosperity. Counterfeiting is evidently but another name for inflation, both creating new “money” that is not standard gold or silver, and both function similarly. And now we see why governments are inherently inflationary: because inflation is a powerful and subtle means for government acquisition of the public’s resources, a painless and all the more dangerous form of taxation.

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