Now the government is really showing its teeth. In this USA Today report we learn that the metal inside a nickel is worth about 7 cents, while the metal insidea penny is worth about 1.12 cents. In response, you might expect consumers to collect these coins and melt them down and sell the underlying metals at a profit. True free currencies do not have values stamped on them, and thus avoid this problem. But there is a good reason for government to not use a free currency – it’s the best way to tax its citizens without them ever knowing about it.
My favorite quote from the director of the US Mint has to be this:
“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.”
It should perhaps be rephrased as this:
“American taxpayers don’t want to see their dollars devalued so a few power hungry individuals in government can take advantage of the American taxpayer. Replacing fiat currency with sound currency would be an enormous restraint on government.”
Consider also that: