Peter Leeds, penny stock authority and publisher of Peter Leeds Penny Stock, says that Canada's recent decision to stop penny production may be a sneak peek of what to expect in America. While the penny is still legal tender in Canada, the Canadian mint has ceased production of new one cent coinage, partially because it costs as much as 2 cents to make a single penny. Here in America, it costs as much as 2.4 cents to make a penny, according to the New York Times.
Raleigh, NC -- (SBWIRE) -- 04/16/2012 -- According to the U.S. Mint, both the penny and nickel cost more to produce than their actual stock value, with a single penny often costing as much as 2.4 cents to produce. Combined with the decreasing purchasing power of our currency, and increasing costs driven by brewing inflation, as argued by penny stock authority Peter Leeds, the penny has seen it's importance in our economy diminish like never before.
"Dropping production of the penny," mentions Leeds, "like they just did in Canada, is a quick way to lower the governmental budget. It doesn't make sense to produce ANY stock currency, penny or nickel, at a cost greater than their value."
Leeds goes on to say that, in America, there are several austerity measures on their way to get the massive budget deficits under control. This includes raising the retirement age, potentially increasing some property taxes, applying new stock market trading fees, and several other approaches under consideration. Dropping America's loss leaders, like the 2.4 cent cost of producing the penny as cited by the U.S. Mint, is a no-brainer, and will almost certainly come to fruition in the next few years, Leeds claims.
In Canada, the penny is still in circulation of course, and has it's current value. The Canadian Mint will just not produce any new pennies.
"Expect America to follow a similar course," adds Leeds. "We'll stop making the penny. Then is will eventually fade away over many years, as the penny becomes more rare, and rising costs squeeze it's value out of existence."
Asked what this means for penny stock, and his moniker as the Penny Stock Professional, Leeds says he may need to evolve with the penny. "Maybe instead of the penny stock professional, I'll be the nickel stock professional."
About Peter Leeds
Leeds is the authority on investing in penny stock, the author of Invest in Penny Stock," and the publisher of Peter Leeds penny stock, a financial newsletter with over 32,000 subscriptions sold. Leeds and his penny stock team never have, and never will, receive compensation from the penny stock companies they review. Not even a single penny.