The American penny collapsed under that weight—3.69 cents for every penny minted. Thus, it cost multiples of its face value to produce—a financial contradiction sustained for years out of habit and political inertia. Now the nickel stands in the same position, costing far more to mint than it is worth. This is not a marginal accounting problem, it is a visible symptom of a system that no longer disciplines itself.

In any private enterprise, producing goods at three times their sale price would be unsustainable. In public finance, it persists year after year. The losses are absorbed, diffused across taxpayers, and hidden within a monetary system capable of expanding to cover them. The question is not why it happens once, the question is why it continues. The answer leads directly to the structure of modern money and to the role of the Federal Reserve.

Fiat currency is money by decree. It has no intrinsic value, no material anchor, no origination from market processes, no constraint beyond policy and confidence. That design offers flexibility, but it also removes the natural limits that once enforced discipline. When coins were made of silver or gold, their production costs imposed a boundary. You could debase them—as empires often did—but not without consequence. Today, the constraint is political will, and that is far easier to erode.