The E-Sylum:  Volume 10, Number 5, February 4, 2007, Article 21

ON REBASING THE ONE-CENT PIECE

David F. Fanning writes: "Regarding Dick Johnson's proposal (echoed
by Stephen Searle) to rebase the one-cent piece, I'm curious what
effects this would have, at least in the short run. In particular,
I'm wondering what effects rebasing just one denomination would have
on inflation. I have no knowledge of economics, but it seems to me
that there would be a short-term spike in prices as retailers and
others tried to take advantage of everyone's sudden (if small) increase
in pocket money. How would it affect the use of other small-denomination
coins?

"Another concern: although I see how everyone would stand to gain from
such an act, it goes without saying that banks would be the real winners.
What possible effect could that have on the economy? Plus, I find it
hard to believe that, were the government to suggest such an action,
the secret would be kept. Word would get out, spread along with other
gossip, and who knows what kind of events could take place. Maybe I
simply take a dim view of human nature, but I don't see this turning
out well."

  Wayne Homren, Editor

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