This blog is about competition. Not just sports, or games, or politics, or economics, or decision-making, or relationships, but possibly about any or all of these things. It will use examples from current events to illustrate broader ideas. Or so I hope. It begins at the start of 2012.

Sunday, April 1, 2012

12-01-11 Penny...Penny...Penny


Random fact of the day:  Neither the penny nor the nickel is allowed to be exported out of the United States.  The penalty for such an action is a fine of up to $10,000 dollars and/or 5 years jail time.

Due to either extensive investment or excessive speculation in the commodities market (depending on your point of view and preference for buying such luxuries as food and energy), the zinc market has inflated to the point where the metal within the penny (mostly zinc) had exceeded the value of one cent.  The same policy prevents melting down the coins in the US either (obviously, the US government can do nothing about people melting down coins once they are exported).

Interestingly, this policy was implemented in April 2007, prior to the economic crash.  Even more interestingly, the implementation of this policy correlates with a sudden, rapid collapse of the zinc market that resulted in the metal losing one third of its value by the end of 2007 (It continued downwards into 2008 and dropped precipitously with the economic crash, and has recovered to its end-of-2007 value today).

The unanswerable question is, of course:  How much was the world’s consumption of zinc (an important resource for rust-proofing steel, by the way) modified by people buying lots of pennies, shipping them abroad and melting them down for an approximately 0.3 cent/penny margin?

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