Recently the US Money Reserve decided to open on the reasons why the penny was eliminated from the currency. Before we go into that, it is wise if we first understand the position of the US Money Reserve in all this. The US Money Reserve was founded in 2001. Currently, it is among largest private distributors of gold, silver and platinum products from the U.S government. It has one of the biggest clients bases in the whole of United States. They offer a variety of products ranging from assets that are made of precious metals like in the case of U.S. gold and silver coins. U.S. On board, it has highly qualified staff that are equipped with extensive market knowledge in the highly profitable precious metals market. This firm is famed for it superior customer service that keeps its customers coming back for more. The headquarters of this found in Austin, Texas.
Philip Diehl, the current president of U.S. Money Reserve, took the stage on CNBC morning show to discuss why the penny is being eliminated from the economy. The main reason he gives is that after analysis the penny use has gone under the cost of running it on the market. Thus maintaining it is uneconomical. He claims that nobody still uses the penny, and most people find it discouraging to carry around. Many economists think that this move will affect prices of commodities and bring about inflation. According to Diehl, this is not true as the bigger part of the economy that is 75% relies on the electronic transaction. This leaves on 25% of transactions on the cash grid, this is not enough to cause inflation. He even speculates that prices would even come down as manufacturers try to extend a hand good relation to their customers.
Competition is also a checker here, and most manufacturers won’t dare to increase their prices if one does customers may turn to competitors who lower their price. Some claim that instead of eliminating the penny the composition of metals would been change to cheaper metals. Instead of the expensive nickel, a copper-nickel mix, which is cheaper could still be able to maintain a profitable penny. Diehl claims that this move to eliminate the penny will save taxpayers around $105 million annually which is a win for he economy. He encourages consumers to embrace this move as it has more advantages to them and the economy in general.