Collapse of US Dollar?

Is the US Dollar on its way down? If you've been following the nation's fiscal policies and spending at all, you've no doubt seen articles such as this one, or this one, foreshadowing the possible forfeiture of the US dollar as the world's reserve currency.  I guess the dollar's only saving grace, is that there is no other nation's currency ready and able to step up and take it's place.  For many of us, the dollar has always been the world's reserve currency, but the older generation know that before WWII, the British Pound held that status.  After the war though, the pound's power declined, and the US dollar moved to the forefront.  Pretty much all of Britain's economic troubles from the 50's to the 70's can be attributed to this fact.  If and when the same thing happens to the US dollar, I'm afraid that the whole nation will be in a world of hurt.  Our most recent economic troubles will be just a drop in the bucket if the US government doesn't stop hemorrhaging money at the current exponential rate.  The recent government shutdown was a step in the right direction, but it is far from over.  If the US wants to stay as the world powerhouse that it is, even more drastic changes will be needed.

New $100 bills

So I've been able to check out a handful of the new $100 bills the government unloaded last week.  I have to say they are pretty cool.  The little blue stripe is awesome and the watermarks and detailed artwork are nice too.  Of course with the old $100's still in circulation, the counterfeiters can still try and duplicate the old 100, at least for a few more years.  It's sad that there are dishonest people out there, but at least they help us to have non-bland money.

Cashing in on Hoarded Pennies

So I found another online article here from a couple years ago about some penny hoarders and their stories.  I just had to laugh.  The guy about half-way through, who is selling the copper pennies at a premium is probably laughing too...all the way to the bank.  What idiot out there is actually paying a premium for these worthless copper disks?  Apparently there are a bunch of them.  And then the reporter asked him about if the penny gets discontinued, and they concluded that you could then melt the pennies and then smiled.  I'm sorry to say that his smile will soon turn to a frown, when he realizes that his conclusion is dead wrong. I've said it before and I'll say it again: Just because the mint isn't making a coin anymore, does NOT mean it's not legal tender or that it's no longer governed by the "no melting down" law. If and when the penny is discontinued, you'll only have two legal options: 1) turn in your pennies to the bank for face value, or 2) do nothing and get nothing.  Of course, it's the suckers who are actually buying the pennies from this guy that will be hating life the most. After all they just invested $176 into something that is only worth $100, and will always only be worth $100.  But I suppose this guy can continue to ride his money train as long as there are idiots out there willing to pay a premium for those pennies.

How Do We View the Penny Now?

A relatively new article from Fox Business News brings the debate of keeping or ditching the penny forward once again.  It's more of the same, but there are some post-Canadian-penny comments, and a little more from organizations that depend on donations to continue operating.

pennyfreebiz

So, pennyfreebiz.com is a website businesses can join to support not using pennies in their transactions.  Though there are thousands and thousands of businesses that don't use pennies, not all of them are members of this site.  The site does have some information on how to transition to a penny free business and a list of retail software that will round to the nearest nickel for you.  If you're a business owner and hate pennies, go check it out to get started on switching over, or join the movement to show your support.

Rounding Rules

Did you know that there are rounding rules in place now for all transactions in the US?  In fact, I'm sure every country has its rounding rules, but I'm not going to check them all.  The rounding rules are governed by the state in which you live, because there is no federal sales tax, only state and local sales tax. The basic rule is that for all taxable sales, multiply the total sales amount (rounded to the nearest cent) by the sales tax rate and carry it out to 3 decimal places.  If the digit in the thousandths place is 5 or higher, round up to the nearest cent. If it is 4 or lower, round down to the nearest cent.
In fact, your listed prices don't even have to be in whole cents. You could sell items for $3.46309 if you wanted.  But then you must subtotal the entire bill, rounding to whole cents and apply your sales tax to that amount and then round the grand total to the nearest cent.  The final price always has to be in whole cents, because that is the lowest denomination with which someone can pay.  Go look at your local gas station and see the price per gallon at $3.699 or some other amount with 9/10th of a penny on the end.  Or check your natural gas or electric bill.  Your price for natural gas most likely includes some fractions of a cent per CCF (100 cubic feet), and your electric bill includes fractions of cents per kWh (kilowatt hour).  But of course, your bill is always rounded off to the nearest cent.
Since we are rounding already, why not round to a denomination that is more convenient for consumers and retailers?  Like the nearest 5 cent increment, or even better the nearest 25 cent increment. We need to lay the penny to rest, and relegate it to a nice bit of nostalgia.

Do you pick up pennies off the ground?

So, we've all heard the phrase about having good luck when we pick up a penny off the ground. The phrase has been around almost as long as the penny has.  Of course as the purchasing power of the penny declined, additional superstitions were added, such as only "heads up" pennies were lucky, and the "tails up" pennies should either be turned over to "heads up" so the next person to come by could receive the luck, or given immediately to someone else so that they could receive the luck, or other variations.  Now you'd have to find a $5 or $10 bill to get the same purchasing power as the penny of the 1800's.  No doubt you'd feel lucky if you found that much money on the ground.  Way back then, it was almost unheard of to find money on the ground, so it was indeed lucky.  Now you can find pennies every day just by walking down the street.  So, do you receive the same amount of luck and gratification today, as the people back in the 1800's had when they were fortunate enough to find a penny and pick it up?  Do you even bother stooping down to pick up those pennies?  If I'm not in a hurry, I'll usually pick up those pennies.  Not because I think they are worth so much, but because each penny I return to circulation, is 2 cents I save the government (and myself) paying to replace it. So does anyone else pick up pennies out there and why?