I'd like to hear speculation about the fate of unused coins like Kennedy Half, U.S. Dollar Coins etc
nickelsciolist
Posts: 196 ✭✭✭
Yes, I am one of those nerds who like to go through boxes of rolls, especially Kennedy Halves, and it's pretty humorous the lengths I will go to get them from bank branches that will still provide them without a charge.
No, I make no pretense of being knowledgeable or having an amazing collection of coins, I just like them and think it's fun. I also find them fascinating from a historical and sociological view.
Anyway, I just wonder about all the Kennedy Halves for example that are sitting in distribution vaults.
I wonder what's eventually going to happen to them all? For that matter, since they are no longer produced for circulation, are there boxes and boxes of 2002 and later Kennedys that the mint never sold just hanging around somewhere?
Also what about other coins like the Presidential Dollars that sit around in boxes?
Comments
It's probably the best example of government waste and inertia most of us are familiar with. Eventually, some administration in the future will announce the sale of bags of old coins to fascinated collectors, who will buy them in graded GSA slabs.
Here's a warning parable for coin collectors...
At some future time, the USD will lose more than 80% of its present purchasing power, and then all clad coins and all zinccents will go to the melter/scrapper.
What do you think happened to all the mountains of crud coins that Mexico minted in the 1970s and 1980s? They went to the scrapper by the truckload.
Until the future inflationary period occurs, the coins will just languish in bags, somewhere.
I can understand how this would get pushed to the side...hard to envision a politician taking up the cause as a major election issue, ha.
So...logistically...how would that happen? All these boxes are sitting in vaults all over the place under the watchful care of companies like Dunbar, Brinks etc. who make their money schlepping money around. How would it all get auctioned?
Also, how much would they sell for? Not face value surely? Scrap value?
Bill, I was responding to the post by dpoole. Yours came in while I was typing. So...by USD you mean the dollar? Excuse my ignorance.
So you are saying the govt. will recall all these coins and scrap them, then keep the proceeds? What do you speculate that might do to the value of the ones that are being hoarded by nerds like me?
What do you think about all the Golden Dollars that are sitting in the expanded vaults that they had to build just to hold them? Millions and Millions of them just sitting there, we should have to start putting these into circulation some people say they have never even seen a Golden Coin Dollar in change. Lets get them out there and start using them then people will say they don't mine using them.
There will be no scrapping as long as face value is more than scrap value. (Then again, it is the gov't so who knows).
Same fate as Ikes, I assume. Ikes sat around in vaults until they all trickled out and went somewhere.
Trouble is nobody will be interested in them then either.
Time to kill the cent and the half dollar. The first is a money loser for the government, the second is a pointless coin in commerce. Many nations have ditched the cent and are still functioning societies.
We also need to scrap the dollar bill and use coins instead. I can’t think of a country that still has a $1 bill equivalent.
One or two Central American countries are using our coinage
as their own almost exclusively. The dollar coin is minted partly
for its seigniorage, I think. Maybe the reason for the Innovation
series.
3stars, yes that seems very sensible. I have heard the $1 bill is a money loser, as is the cent.
JBK...seems unlikely to me the Kennedys will all get dispersed as the Ikes did. There are just way to many of them.
I like 1buffan's idea of spending $1 coins to get them circulating, but I am afraid that is a vain hope. My local bank branches actually charge a fee for any quantity of them. I have to drive downtown to a large branch to even get them and I'm sure cash machines will never dispense them.
In our neck of the woods, bring up scrapping the cent and activists claim it will hurt low income people...but that seems inevitable to happen, and then presumable the hoarders will cash in 3cents on the penny
Tibor...that is fascinating about coins being used in Central America. What a great way to save cost haha!
Yes, re seigniorage: I looked into this a while ago and the Mint claims to have netted almost a billion dollars to date on the US Quarters Programs alone. When coins get taken out of circulation, it creates more demand so the Fed orders more, and quarters get collected by casual collectors everywhere.
As regards any other coin, as long as they can keep making money minting money and selling to coin nerds, I guess they'll keep cranking them out, even if they never get circulated.
It's a funny world ain't it?
It costs the govt significantly less than 50 cents to make a half dollar, they are worth 50 cents face value, and made only for collectors, who actually pay more than 50 cents for them.
It is a money maker so why stop production?
hyperinflation will make them the new penny.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
JBK, you seem to have the right thought. Does the mint actually sell out of Kennedys every year? Not that they would have to make money, but...seems like they must, as you can't order older coins from the mint, am I right?
derryb...that would be an interesting outcome wouldn't it?
If you stop the half dollar production and use that capacity for dollar couns in conjunction with getting rid of the dollar bill you probably make even more.
3stars...interesting thought. But I am not sure it's a production capacity issue. As long as they make money on the halves that is a bird in the hand. Adoption of the dollar coin seems iffy, though eliminating the bill would certainly change that equation wouldn't it?
Also to Tibor's point...I said something about cash machines that was actually kind of stupid...they don't dispense dollar bills, so why would I expect them to dispense dollar coins? Duh.
It’s not a production capacity issue. But seigniorage on a dollar coin is something like 88 cents and doesn’t require special handling such as being put in mint bags or rolls, added to a website, shipped in small quantities. Dollar coins can be produced, dumped into a ballistic bag and distributed in the thousands at a time. You can probably mint twice as many dollar coins in the same amount of time it takes to mint and prep the halves, making way more on seigniorage in the process.
Agreed...but seems to me as with any commodity there still has to be a market or you don't make money. So if I get you you're arguing dump the dollar bill which is a cost liability and viola you have an instant market for the dollar coin which becomes an instant cash cow. Makes sense to me.
If I'm looking at it production wise though...if I can still make money on halves, I'd do both. Kind of like I'm sure Dairy Queen does way more volume at a way better margin on Dilly Bars than Banana Splits, but they still make Banana Splits.
Then again...I'm a sentimentalist. I like the Kennedy Halves and would hate to see them go. I don't collect currency so seeing the dollar bill go away would not make me cry. Except they are fun to do parlor tricks with, like making oragami rings and bow ties and stuff.
Several people say half dollars are heavy, yet one weighs the same as two quarters.
Paper money eventually returns to its intrinsic value. Zero. Voltaire. Ebay coinbowlllc
You and I may agree on that friend, but the market decides. The jury has reached a verdict: it's a big klunky coin, hard to fit in cash drawers, inconvenient to carry in your pocket or purse, bigger than a dollar coin. As currency my favorite coin is kaputs. Happily for he time being it's still a money maker for the mint.
Americans are strange... they are accustomed to their money and resist any changes... Politicians know this and want to avoid the massive uproar that eliminating the cent or dollar bill will bring. While logical, logic has little to do with public opinion or politics. Cheers, RickO
I really doubt if the uproar would be that big. There'd be a couple of hurumphy letter to the editor, but not enough people rely on coins for transactions now to worry too much, and nobody reads letters to the editor any more, either.
The problem is inertia, political priorities, and bigger noisemakers in Washington supporting coinage infrastructure than those wanting to reform it.
Here's a warning parable for coin collectors...
I agree...the dollar won't hyperinflate, but continue to lose value to the point just where people will just stop using it, and all the coinage will be scrapped. But until then, forget about getting rid of the cent, etc. Unlike most countries, any changes to the US coinage has to be done through legislation, so nothing is going to happen.
We have a car wash nearby where the bill changers only dispense Sacs and SBAs.
I'm waiting to see Halves and small dollars laying on the ground; like pennies , nickels, dimes and quarters. They're how I pay for my wife's iced tea at MickeyD's. " I'm lovin' it. "
Today's society is the most wasteful, thus far. Now what to do with all these plastic lids & cups ? To the ocean, perhaps. To me, they'll never be unused. Repurposed, maybe. Collected ? That's laughable.
Bill Jones: I recall on a trip to Zimbabwe about ten years ago, seeing lots of coins strewn everywhere. Valued at fractions of an all but worthless Zimbabwe dollar, people simply just threw them away! With a bankrupt government and no fiscal responsibilty within the goverment, there is no question of a future inflationary period coming, just the question of when it will arrive. One thing I have observed in three different places that had hyperinflation, was the speed in which the shelves cleared. Trades only for the few available goods with PM coinage, cigarettes, liquor, and coffee worked the best!
I don't agree or disagree, but I see a larger issue. If so few people use coins that a change would not create much resistance, then why the need for any change in the current process?
The status quo is a powerful force, especially if no one cares much about changing it.
My local Post Office used to have a stamp vending machine in the lobby which would return only SBA's & Prez $1's. While at the same time, clerks at the counter disdained them & did their best to avoid taking in. Go figure. I used to put in a $5 bill or other $1 coins into the machine & then cancel my order, just to see if any new coins we still needed would be returned.
But those machines didn't last very long there, and yet one more source of small $1 coins dried up.
Count me in with those who say it's time to do away with the penny and half, especially if the latter is no longer circulated. As with the non-circulating $1 coins, I feel an "obligation" to keep up our collections with each year's issue, as long as the series is out there, since we've already started them. But if we'd have known at the start that a series like the Prez or Innovation $1's were not going to be available from general circulation, we never would have bothered with them. As a matter of fact, we're going to ignore the Inno-bucks (will Whitman even produce a folder for them?).
I actually welcomed the end of the Canadian penny series, as it now makes our sets "complete" and that much more desirable/historic. Could doing the same here have the same effect for U.S. penny collections?
One final thought.............. am I right in my understanding that there is just 1 politically well-connected producer of the special paper/linen used in producing U.S. paper money? I'm sure the BPE has a good supply in reserve, but, in the words of famous TV mobsters, if "something unfortunate were to happen" to the factory that produces it, would the remaining supply have to be diverted to just the printing of larger-denomination paper money vs $1 bills? Maybe that would be an opportunity to re-introduce $1 coins into circulation on a massive scale and possibly gain more acceptance? And just never go back to paper $1 bills if & when the supply steam is re-established? Just sayin'.......................
Failing that, what if we took the $1 coins out of storage, stacked them high, and used THEM to both pay for & actually construct any border wall?! (Although, considering seignorage, ECUADOR would then actually be paying for the wall instead of Mexico!!
).
Chances are they will probably continue to sit in government vaults, stored at government expense. Those coins produced sengeiorage when they were minted, which is the difference between their face value and the cost of production. That helped to lower the government’s annual deficit. If they were melted, the “profit” would go away.
As for the coins in people’s hoards, and there are a lot of the clad copper-nickel JFK half dollars from what I’ve seen, they will continue to sit. In 2080 I can see people taking them to coin dealers, only to hear, “Those coins are worth their face value (or nothing if they have been demonitized) despite the fact that they are 100 years old.”
The Treasury should get it together and offer to sell the excess to the dollarized countries like E. Timor, Ecuador, Panama etc.
how big of issue is this? are there a few trillion dollars worth sitting in totes?
if it costs 5 cents to make a 'golden dollar', do they value it as a dollar so the mint is a money making manufacturer?
the more they make the lower the cost per coin, hence, the larger profit from each. at some point one of two things will happen, all that "money" gets into the system and our Uncle profits or it gets melted and we lose.
if you look at the production numbers for Presidential Dollars it was very high in 2007, almost a Billion coins struck. that went down consistently through 2011, then from 2012-2016 the Mint averaged under 35 million/year. perhaps our Uncle is smarter than we think and he is "selling" them to the other countries mentioned above. even at a discount under $1 it is still profitable.
NEVER give Uncle Sam credit for being SMARTER than we think........................
Fun discussion. Enlightening too.
My conclusion...doesn't seem to me there is really enough impetus for change as long as the mint makes up its losses elsewhere. A well referenced Wikipedia article says " The U.S. government, the largest beneficiary of seignorage, earned about $25 billion annually in 2000.[12] For coins only, the U.S. Treasury received 45 cents per dollar issued in seigniorage for the 2011 fiscal year.[13]
There's just not enough to gain by changing anything. As to the halves and dollars, the Mint seems to be selling all the halves and dollar coins it makes. So leaving the existing old issue coins laying around appears to be a problem for nobody but us coin nerds who want to get at the few desirable ones left, and the carrying services and bank tellers who have to put up with us.
For what it's worth, only pennies, nickels, dimes, and quarters are considered "circulating coinage". Halves and dollar coins are "other numismatic products". So wherever they end up, the mint seems to be under no illusion that they are necessary for commerce.
https://www.treasury.gov/about/budget-performance/budget-in-brief/BIB18/22. US Mint FY 2018 BIB.pdf
LIBERTY SEATED DIMES WITH MAJOR VARIETIES CIRCULATION STRIKES (1837-1891) digital album
Speaking of half dollars, just finished rollsearching a box tonight. My third box ever and was skunked on the other two. Told myself I would be done with halves if skunked again. I guess I may be hooked now? Pretty fun.
Wow! Now that is cool! You say you have not tried this before? I'd keep going.
It is not uncommon for me to go through 3 boxes and find nothing.
A lot of the ones I see are marked, so I know there are others in my area (MN) going through the hoard.
None of those seem to be in great shape, but it is fun when you find them, especially that many.
Yes. And of those only dimes and quarters are profitable...but very much so. I talked to someone from Canada that said dollar and two dollar coins are very popular up there...so who knows, maybe there will be a...change...someday. Ha. Aha. I am so funny I crack myself up.