Monday, July 16, 2007

Profitable Coinage

When is an Indian one rupee coin worth thirty-five rupees?  When it is turned into razor blades.

"Our one rupee coin is in fact worth 35 rupees, because we make five to seven blades out of them,”...

Enterprising merchants in India, who deal in products which tend to produce alot of pocket change for their tills, are taking the coin of the realm received in payment for their goods, which I must consider as being sold at a profit, and further profiting from the exchange either by selling the coins received as payment for goods at a profit, or, by melting down the coins and turning them into razor blades.

This is, of course, upsetting Indian officials, who have decided to crack down on this practice, just as the United States has done when it made it illegal to melt coins, or to carry more than a certain amount of coins out of the country back in December 2006.

People who melt pennies or nickels to profit from the jump in metals prices could face jail time and pay thousands of dollars in fines, according to new rules out Thursday...Under the new rules, it is illegal to melt pennies and nickels. It is also illegal to export the coins for melting. Travelers may legally carry up to $5 in 1- and 5-cent coins out of the USA or ship $100 of the coins abroad “for legitimate coinage and numismatic purposes."

What’s that old saying, “Penny Wise, Pound Foolish?”

Story regarding India’s profitable coinage is titled Sharp practice of melting coins. Story regarding the United States’ legislation making it illegal to melt coins, or travel with more than a prescribed amount of coins, is titled New rules outlaw melting pennies, nickels for profit.

Linked via Marginal Revolution.

Posted by John Venlet on 07/16 at 06:52 AM
(0) Comments • (0) Trackbacks • Permalink
Page 1 of 1 pages