August 2025 – Week 4 Edition
Eliminating the Penny from Circulating Coinage Article Wins Top Award
Each year, the Numismatic Literary Guild (NLG), founded in 1968, hosts its annual awards competition, held in conjunction with the American Numismatic Association’s World’s Fair of Money. It’s a tradition that dates back several decades and is highly regarded by the industry for its recognition of the top writers, authors, publishers, content creators and podcasters.
In November 2024, I began researching and writing an article analyzing whether or not the U.S. Mint should eliminate the one-cent coin, aka the penny, from its circulating coinage. The article explained how doing so would save taxpayers hundreds of millions of dollars, as each penny costs nearly four cents to make and it is the most-produced coin at the mint.
The NLG’s executive director, Jerry Jordan, presented me with the L. Miller Award for the best article of the year, beating out all other entries in every written category.
Different versions of the article, entitled “Eliminate? Future of the Cent,” were published in January 2025 simultaneously as the cover stories for the two leading industry publications Coin World and COINage magazines. The story appeared weeks before President Donald Trump issued his executive order to halt production of U.S. one-cent denomination coins.
I have studied and written on the topic for over a decade but with the nation looking at ways to cut costs for taxpayers, I took a much deeper look at it. In the past, pennies were made primarily from copper; now, pennies are made of 97.5% zinc and just 2.5% copper to save money.
Do you know who is the most prominent advocate of keeping the penny, regardless of the cost to taxpayers? It’s not coin collectors. It’s the zinc lobby and the loudest disguises itself as the group called Americans for Common Cents. The most vocal lobby effort is essentially one person funded by the company Artazn, formerly known as Jarden Zinc Products.
“The important Miller Award is posthumously named after Jim Miller, an esteemed magazine publisher and long-time NLG benefactor,” said Jordan. “This in-depth article was vitally important in educating people about the cost of our nation’s currency. Dr. Fuljenz has long believed that eliminating the penny could save taxpayers hundreds of millions of dollars over time, and shortly after his in-depth, highly researched work appeared in Coin World, President Trump issued his executive order. Knowing the reach of the numismatic industry and the gravitas of Dr. Fuljenz in the political spectrum, I don’t think that was a coincidence.”
Powell’s Change of Fed Policy Boosts Gold and Stocks
Last Friday, August 22, gold and stocks were mired in a low trading range as Federal Reserve Chairman Jerome Powell gave his final talk at the annual central bankers’ convention held in Jackson Hole, Wyoming. His term expires in May. During his talk, Powell changed on a dime,” so to speak) from his restrictive monetary policy of high interest rates to strong hints of lower rates next month. Powell signaled “the shifting balance of risks may warrant adjusting our policy stance.” He also said that “downside risks to employment are rising.”
The Fed has two mandates – low inflation and low unemployment – so these last two phrases tell us the Fed’s employment mandate is now starting to be Mandate #1, replacing its inflation fears due to “shifting balance of risks” and “adjusting our stance.” Powell also recognized the slower economy: A “decline in growth has largely reflected a slowdown in consumer spending.”
Gold and stocks shot up in response to Powell’s talk. Gold rose from $3,360 at 9 am EDT Friday to $3,420 at 11am. Stocks also erased their declines of the previous four days and closed the week positively, near all-time highs. Gold staged another big rally on Tuesday, August 26th, rising $25 on the day, coming within $7 of a new all-time high.
Despite what most pundits say, gold’s latest rise is about more than inflation or even the prospect of declining interest rates next month. There is a clearly rising demand for gold as a safe haven against soaring government debt, both here and around the world. In the past three years, central banks have purchased over 1,000 metric tons of gold each year and are still buying at that torrid pace this year. Going back to 2022, the central bank buying surge came right after the eruption of two major new wars – Russia’s attack on Ukraine in 2022 and Israel’s response against Palestine’s terror attacks in 2023. Gold keeps rising as those two wars keep raging.
In the fortuitous fate of timing, our meeting with author and publisher Steve Forbes took place right after Hamas attacked unarmed Israeli citizens on October 7, 2023. The day before that attack, Friday, October 7, gold traded at $1,810 per ounce. Gold rose to $1,900 in short order but when we met with Forbes, gold was still well below $2,000. Forbes and I went out on a limb, predicting $2,500 per ounce in 2024. We were being modest, in retrospect, as gold $2,500 in August 2024, reaching a new all-time high of $2,789 per ounce in October 2024.
Gold is now up 88% in less than two years, dating back to the day before the Hamas attack in 2023. The big fuel for gold’s rise in the past two years includes two huge global wars, high and rising deficit spending and the Fed’s stubbornly high discount rate, near 5%, so gold has risen the most when rates were high. Gold keeps rising on central bank hedging, fiscal anxiety and a weak dollar. Gold has now replaced the euro as the second most common central bank holding (to the U.S. dollar) but with the dollar’s decline since 2023, gold may replace it as the top central bank holding within five years, or so. This creates the possibility of a new gold standard by the centennials of when Great Britain (1931) and the U.S. (1934) abandoned gold.
In the meantime, it’s likely gold will make a big move following the Fed’s next policy meeting on September 16 and 17. Currently, the CME’s (Chicago Mercantile Exchange) FedWatch market tool predicts an 89.2% chance of a 25-basis point (0.25%) interest rate cut. Historically, gold tends to decline when rates decline but gold also tends to rise when Fed interest rates rise, as it has done since 2022.
The U.S. Dollar Index (DXY) is down 10% this year and -14% from its peak in 2022. During that time, the Fed raised its Discount Rate from 0.25% to 5.25% from March 16, 2022, to July 26, 2023. During that rate-raising run, gold was flat at $1,900 per ounce. When the Fed cut rates last fall, gold rose moderately but gold waited for the dollar’s decline in 2025 to rise faster. This short history argues against the general belief that rising interest rates bring foreign investors into the dollar, thus boosting it. The dollar fell as rates rose and it also argues against the assumption that gold is weak when rates are high, as it has risen most when rates have been high.
Gold is up 4.4% through August 26, Silver is up 5.7% and Platinum is up 5.2%. By comparison, stocks are up about half as much, at +2% for the S&P 500 and NASDAQ, and +2.9% for the Dow, including all the big gains last Friday, following Fed Chair Jerome Powell’s announced policy shift. For the year so far, and also over the past 25 years, precious metals have significantly outperformed the rate gains of the two major stock market indexes. Additionally, many of our innovative 20/20 Program rare coins have outperformed stock market indexes since we introduced the program in 2019.
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