The curious case of the Canadian penny

The inflation squid finally took its toll on the Canadian one penny coin. Due to increasing metal prices the cost of minting and distributing the coin reached 1.6 cents and the Central Bank of Canada decided in May to discontinue its production. Its purchasing power dropped by a staggering 96% since the coin was first introduced in 1908. The Central Bank of Canada reckons that the move will save $11 million a year, while Bloomberg estimates that banks will save $20 million per year from not having to deal with small change. Not worth a penny ?

FED's Chairman Bernanke sees trouble ahead

It's time to sober up and say a little prayer for the wellbeing of the United States of America. The recent Federal Open Market Committee decided today to keep the benchmark interest rate at the 0% - 0.25% interval, effectively prolonging the Zero Interest Rate Policy, through at least mid- 2013. FED's policy makers agreed that the economy picked up some steam while "signficant downsize risk" still remains. The US Federal Reserve will still conduct the so called "Operation Twist" which aims to swap short term Treasuries with longer term maturities in order to flatten the yield curve and lower the costs of capital investments. 

The inflation rate, measured by the CPI rose to 2.9% in September, the highest since 2008, while the core-CPI (excluding housing and energy costs) rose to 1.6%.