Coin hoarders costing Canadians a pretty penny, Flaherty says

This is a classic example of Gresham's law, bad money drives out good under legal tender laws, at work. People hoard the good money, and dishoard, or spend the bad. Gresham's law is the main reason why Executive Order 6102, issued in 1933, was necessary before the dollar could be devalued by the Gold Reserve Act of 1934. The Gold Reserve Act revalued gold from $20 to $35 an ounce.

Jim Flaherty remembers when pennies were enough to keep him stocked in bubble gum for the baseball diamond, but after four years of chewing on the future of Canada’s smallest denomination, the Finance Minister says the penny’s days are numbered.

US pennies, 97.5 zinc and 2.5% copper, were once 95% copper and 5% zinc. Soon, US pennies will either disappear or switch to the cheaper steel/zinc and copper plating mixture.

Source: theglobeandmail.com