UK Coinage Stupidity

This story is funny.  (There’s one regular UK commenter who would be amused by this story.) In the UK, they are changing the metal composition of 5p and 10p coins. That’s approximately equivalent to dimes and quarters in the USA.

Due to high inflation, the UK government was losing money on the coins. The melt value of the coin was greater than the face amount. The USA has a similar problem with pennies and nickels.

Here’s the joke. The UK government will save 8m pounds by changing coin composition. However, the private sector will have to spend 80m pounds! The new coins have a different shape and density! Old vending machines won’t work! They all need to be fixed and replaced!

That is really ironic. The coin composition change is a hidden tax on the private sector. There are costs due to upgrading vending machines.

That’s a sign of hyperinflation, debasing metal coins. In the 1960s, it was a change from silver to other metals. Now, the coins are changing to steel.

The low-denomination coins should be completely eliminated. However, that would mean that the State is admitting there’s an inflation problem.  In the USA, it would be politically inappropriate to eliminate pennies, nickels, and dimes, because that would be an admission that there’s inflation.

That was an amusing story. Due to hyperinflation, the UK government changed 5p and 10p coins to cheaper metals. The private sector must upgrade all their vending machines due to the change. That cost is greater than the amount that the State is saving. This is only a temporary solution to coin hyperinflation. In a few years, the State won’t even be able to afford steel 5p and 10p coins.

3 Responses to UK Coinage Stupidity

  1. I’ve heard Max Keiser say a few times the banking industry crashed an economy worth 1000*x just to make a profit of x. So a similar theme to the one you are speaking of.

    What do you expect from UK politicians? David Cameron (the barely elected Prime Minister with only 1 in 5 votes) used to “work” in Public Relations beforehand.

    George Osborne’s (Chancellor in charge of the Treasury and tax) family makes posh wallpaper and have a nice line in setting up trusts to reduce/dodge tax.

    Again you can’t make this up. The man in charge of tax has a family that sets up trusts to AVOID TAX.

    Why are these clowns still in office?

    • This is the difference between good logic and evil logic.

      According to good logic, crashing the economy to make a profit is evil.

      According to evil logic, crashing the economy to make a profit is brilliant. According to evil logic, all that matters is your relative wealth to everyone else, and not absolute wealth. Therefore, it’s OK to wreck the economy as long as you’re still on top.

      An honest form of government would penalize and punish people who do evil things. The current State is of the psychopaths, by the psychopaths, and for the psychopaths.

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