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Changes Coming to Our Change?
OAKSTAR
Posts: 5,806 ✭✭✭✭✭
Disclaimer: I'm not a dealer, trader, grader, investor or professional numismatist. I'm just a hobbyist. (To protect me but mostly you! 🤣 )
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OAKSTAR
Posts: 5,806 ✭✭✭✭✭
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Well, making coins that are worth less than their intrinsic base metal content is moronic. I think we can all agree on that.
Their suggested remedy is incorrect in my opinion. In 1857 the half-cent was discontinued largely due to insufficient purchasing power. At the time, it was equivalent to 18 cents today. We should therefore abandon all coinage below the value of a quarter and we should mint denominations up to $10 or $20. Actually, a dollar in 1857 would be equivalent to $37 today.
From an inflationary viewpoint, this would put us back on track with historical norms. But, it will never happen. To do so would be to admit that inflation is a real, and politicians would rather avoid the optics of that.
I'm sure Congress will get it right. They always act in the best interest of us all.
Yeah, right! What have you been smoking my friend?
As always it's more complex than it seems. The mint has several conflicting requirements
Therein lies one of the traps - the apportionment of variable and fixed costs.
Variable costs should be easy, correct? If you make more or less of a coin the basic operations should follow production. Cheaper compositions should make the coins less expensive. Fluctuation of raw materials costs makes it more complex, but accountants know how to do this.
Fixed costs are harder - a judgment is required as to how much goes to what? Do you total them up and divide them per coin? Per dollar of coin value? By the value of the raw materials? Right now it seems that the mint puts a lot of the fixed costs against the collector coins (making them expensive, but circulation coins a bit less expensive).
In 2022 the mint made just over 13.62 billion coins, but 6.36b cents and 1.55b nickels or roughly 58%. If the mint were allowed to just stop making them, it doesn't automatically become 58% less costly.
If you read the articles, the average cost for the raw materials for the Nickel jumped (2021-->2022) by 41.4% but the per-unit costs increased only 22.2%. If you stop making the Nickel, you may lose some of that efficiency gains, making the other coins (dime, quarter) more expensive.
ANA 50 year/Life Member (now "Emeritus")
The situation is always made more complex by politicians. The operation should be run as a business. There are viable solutions to all problems. I do not pretend to have the solution, as I am not in a position to understand all the variables. However, I have no doubt, if run as a business, with a competent staff at hand, a profitable - or at least a comfortable break even - status could be achieved, and satisfy the hard currency needs. Unfortunately, this course will not be pursued, since it is in the hands of politicians. Cheers, RickO
They ( politicians ) can't leave well enough alone. IMO.
Minting $10 and $20 coins for circulation wouldn't work because they would be heavily counterfeited.
Worry is the interest you pay on a debt you may not owe.
Pretty sure that was sarcasm.
Lance.
You missed the $5.
Nevertheless, it would take a total overhaul of coin & bill production. If you have $1, $10, and $20 coins and $1, $2, $5, $10, $20, $50, and $100 bills - well the public has already voted on the $1.
Having to walk around with a wallet of $50 and $100 and a pocket of "change" which would weigh 5#... I know which way I vote (tap to pay).
ANA 50 year/Life Member (now "Emeritus")
A few years ago, I was reading that the people of Ecuador were using the US $1 coin in commerce since their own money was worth so little and that these dollar coins were being heavily counterfeited. The FBI sent some of their agents to Ecuador to work with the local law enforcement to put the counterfeiters out of business.
Worry is the interest you pay on a debt you may not owe.
@PerryHall- There was also talk here recently about how worn and circulated some of the 2000-P Sacagawea are. That they were heavily "apparently distributed" and circulated in Ecuador and find their way back here. I've been looking for them. A modern P01 would be pretty cool!
Disclaimer: I'm not a dealer, trader, grader, investor or professional numismatist. I'm just a hobbyist. (To protect me but mostly you! 🤣 )
Maybe it would be a problem, but fear shouldn't prevent us from doing something smart for commerce. Isn't that the job of coinage? Isn't the use of coins already almost almost gone in practical day-to-day life?
I imagine if we put our big brains on the project we'd figure out a way to stay ahead of them better than we could in 1857.
I agree, but we have been doing that since 1965.
The following chart shows the metal value and percentage of monetary value in each denomination.
From Coinflation April 28, 2023:
" Lincoln Copper Cent 1909-1982 Cent (95% copper) *
$0.01
$0.0256322
256.32%
Jefferson Nickel 1946-2014 Nickel
$0.05
$0.0617137
123.42%
Lincoln Zinc Cent 1982-2014 Cent (97.5% zinc) *
$0.01
$0.0070052
70.05%
Roosevelt Dime 1965-2014 Dime
$0.10
$0.0222348
22.23%
Washington Quarter 1965-2014 Quarter
$0.25
$0.0555895
22.23%
Kennedy Half Dollar 1971-2014 Half Dollar
$0.50
$0.1111805
22.23%
Ike Dollar 1971-1978 Eisenhower Dollar
$1.00
$0.2223622
22.23%
Susan B. Anthony Dollar 1979-1981, 1999 SBA Dollar
$1.00
$0.0794142
7.94%
Sacajawea Dollar 2000-2014 Sacagawea Dollar
$1.00
$0.0668789
6.68%
Presidential Dollar 2007-2014 Presidential Dollar
$1.00
$0.0668789
6.68%"
The only denomination that has more metal content value than its face value is the nickel. The article must be mistaken. I do not think it costs more then face value to make any of the other denominations except maybe for the penny if adding in minting costs. Something is missing from that article. What is the cheapest metal that you can make a coin with? Aluminum?
I do not see how a change to aluminum coins or some cheap alloy will be good for collectors.
But it's legal to see thing that go up in smoke 🚬