The purchasing power of coins.
RWM
Posts: 206 ✭✭✭
First, please indulge me as I state the obvious. The writing has been on the wall for coins being used in daily transactions for a long while now and time will only increase making this form of exchange irrelevant. Taxes and vending machines alone are really all that's keeping coins in most individuals lives right now. I even know of several business that are being to just drop the change off what you owe them on some cash transactions.To them it's not even worth the time it takes to handle the coins to make the change for you.
Now of course numismatic coins will always be what time has made them and not really where I'm going with this post. My question is where will the future, if any, of coinage be? Will we see higher denominations of coins replacing lower valued paper notes? Or will coins simply disappear all together leaving us to have to move over to the precious metals forum to see new bullion issues of "coins?" Perhaps it will be something else altogether.
Comments
As a collector, I'm ashamed to say I haven't payed for anything with a coin/bill in a very long time.
I don't think that's necessarily a Bad Thing for the hobby.
In 5 to 7 years, transactions with actual
Physical Currency will be very rare.
I think it may help the Coin collecting hobby, because the mint has to stop minting at a loss at some point, because it doesn't make sense.
Everything will be electronic, there is no doubt and no going back.
So at some point coins will be extinct.
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I don't see coins going anywhere anytime soon...
Predictions of the demise of checks and cash have been being predicted since the 1960's. Here we are almost 60 years into those predictions, and while new forms of payment have emerged, we've never come anywhere close to ditching cash or checks.
Of course, since the 60's, new forms of payment have emerged. Those forms of payment combined with the information age did cause a decrease in the use of checks (the total number of checks getting passed per day). But In just the past week, I've heard a report that the decline in check use has bottomed out and their use has started to increase. (I've got no source to sight... just that I work in the industry and that was something I recently heard).
Then there is the lowly cent. Arguably, the cent is an arbitrary level of precision that we use in conducting transactions. Simply look at gas. It's priced to the thousandth of a dollar (tenth of a cent). An example of a local gas station near me right now is that gas is priced at $2.529/gallon. But if I buy a gallon of gas, I will pay either $2.53 or $2.52 (depending upon how the transaction is rounded). For years, the argument has been made that we should simply ditch using the cent and round all cash transactions to the nearest nickle (i.e. round transactions to 1/20th of a dollar rather than 1/100th of a dollar. But there isn't a hint of that ever getting adopted anytime soon.
By contrast, the government has changed our coins. The largest example I can think of is the dollar. Dollar coins used to be physically large. But today, a dollar coin is larger than a quarter but smaller than a 50 cent piece. So perhaps something else might change in the physical makeup of our coins. However, almost every vending machine uses quarters, dimes, and nickles, and many today use dollar coins. When the golden dollar was created, it was designed to work in existing machines that accepted the SBA dollar. So IF any of these coins were to change, they would only change such that existing machines would still work with them. But the cent... almost no machines (except counting machines) use cents. I could therefore see the government changing the cent to one day be smaller... perhaps something similar in size to the silver 3 cent coin one day.
But otherwise, things change so slowly that I don't see the demise of coins in my life time, and probably not in my children's life time. The only exception I could foresee would be if something catastrophic happens to modern society (nuclear holocaust?).
The USA is well-behind most European countries (and Japan) in moving towards higher coinage denominations. At some future point, someone will see the sense in issuing a one dollar coin, a two dollar coin, and a five dollar coin AND discontinuing those banknotes. Probably need a two hundred dollar banknote (or perhaps a two hundred and fifty dollar bill). You will see more printing of fifties and one hundreds at about the same time.
This prediction assumes that the Western world stays ahead of some deflationary headwinds. This prediction assumes that the USA will not seriously consider going cashless.
The Hundred Dollar bill is today the Twenty Dollar bill of my youth.
The eventual demise of physical representations of purchasing power will be great for the hobby. Smoeday the coins we collect today will be "ancients".
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I agree that today's 100 bill is dang near the same thing (same purchasing power) as the 20 bill of my high school years (41 years ago, now). I only hit the like button because it will take a long time for the present U.S. coinage to really seem "ancient". For example, I don't today consider the daily coinage from just before the Civil War to be super special, although once in a while I have obtained and retained individual coins from that era that tickle my fancy.
In 1977 I bought a very nice 1928 St. Gaudens $20 gold for $280 and a Gemmy super nice 1904 Liberty $20 gold for $245. Those prices, multiplied by five, aren't that far off from today, although the nice 1904 would surely be valued something higher. By 1981, both those coins were gone, sold for beer money and gasoline money.
I use cash all the time and the change goes in the center console to be cleaned out every so often. I have a Ziploc bag full to go through when I have a rainy day. Received a 68 Canadian quarter about 3 days ago. A magnet doesn't stick so without a lot of research I believe its .500 silver. I like cheap thrills.
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Can barely by a pair of shoes with the highest denom note (the hundred)
Drecky 28 page local newspaper is two bucks. Soft drink is well over a dollar. From a commerce perspective everything below the quarter is worthless. Many of course would piss and moan if register totals were rounded up or down but reality is cost to anyone would be miniscule.
Coins will disappear. No doubt. Not in 5 years, but probably in my lifetime.
Millenials and post-millenials rarely use cash. Many of them don't even use cards that frequently - they use their phones!!!
It is far more efficient [for both good and bad reasons] for the government to switch to purely digital currency.
From what I read about a lot of the millennials they don’t use any physical cash at all. Everything is in debit and credit cards, and gift cards when they got a gift from “the old fogies” like me.
Maybe paper is on the way out too. When I was London, England a couple of years ago, it was paper or credit cards. The one pound coin was like a penny. It had so little buying power that it didn’t matter, and I didn’t see much of the higher denomination coins.
I mainly use cash but not change. I save it up and once a year or so I get a little bonus.
I actually use coins two or three times a week....Not for large purchases, but for smaller buys. Also, the Thruway tolls still take coins...My coin pocket normally has 4 quarters, four dimes, four nickels and four cents. With those coins I can usually hit exact change...if multiple buys in a day, I end up with more change and the quantities vary. I can certainly foresee a five dollar coin in the near future and hopefully, the demise of the one dollar bill. Cheers, RickO
That's somewhat already happened... The reason the SBA dollar was created was because the math at the time worked something like this... A dollar bill costs 5 cents to make and stays in circulation for 18 months. The dollar coin costs 15 cents to make but stays in circulation for 30 years.
But the problem was that the public didn't want a pocket of dollar coins, not when a stack of paper money is so much easier to place in your wallet.
So based on this history, I expect coins will be done away with before larger denominations of coins will ever be created.
Perhaps realize this... The mint has been operating for about 200 years. But in the last 100 years, the only significant change to our coins was the creation of the SBA sized dollar coin. Otherwise there has only been relative minor changes to the composition of coins (steel cent, silver nickles, clad cions, and zinc cents) and modifications of the designs (though we're closing in on 100 years of Washington/FDR/Jefferson/Lincoln coins).