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Todays word is "seigniorage"

CoinstartledCoinstartled Posts: 10,135 ✭✭✭✭✭

How would you explain it to a new collector, particularly regarding newly minted Cents and Nickels?

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    tradedollarnuttradedollarnut Posts: 20,147 ✭✭✭✭✭

    What is the cause of Rollo’s dementia, Alex?

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    BillJonesBillJones Posts: 33,486 ✭✭✭✭✭

    Seigniorage is the profit a mint makes from producing coins. It's the difference between the face value of the coins and their cost of production.

    I suppose you could say that the modern Cents and nickels earn "negative seigniorage" for the modern U.S. mint system.

    Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
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    JBKJBK Posts: 14,788 ✭✭✭✭✭

    This brings up a question I had - does the Mint/Treasury count the bullion coin programs in the overall seignorage calculation? It must cost close to $20 to make a $1 Silver Eagle, for example.

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    BillJonesBillJones Posts: 33,486 ✭✭✭✭✭
    edited November 3, 2017 2:17PM

    @JBK said:
    This brings up a question I had - does the Mint/Treasury count the bullion coin programs in the overall seignorage calculation? It must cost close to $20 to make a $1 Silver Eagle, for example.

    It would be silly to calculate traditional seigniorage on the bullion gold, silver, platinum and commemative coins. The mint sells all of those coins for more, usually a lot more, then their face value.

    Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
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    JBKJBK Posts: 14,788 ✭✭✭✭✭

    @BillJones said:

    @JBK said:
    This brings up a question I had - does the Mint/Treasury count the bullion coin programs in the overall seignorage calculation? It must cost close to $20 to make a $1 Silver Eagle, for example.

    It would be silly to calculate traditional seigniorage on the bullion gold, silver, platinum and commemative coins. The mint sells all of those coins for more, usually a lot more, then their face value.

    Very true, but by your own excellent definition above, what they sell it for is not the issue:

    "Seigniorage is the profit a mint makes from producing coins. It's the difference between the face value of the coins and their cost of production."

    So, they incur huge negative seignorage upon production, and then may or may not make any money (profit) upon sale depending on what type of coin it is (bullion vs. collector bullion).

    I always assumed they would not calculate seignorage on bullion, but I just don't know if or where they draw the line (do they calc. seignorage on ANY collector coins the mint sells, from commems to proof sets?).

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    BarndogBarndog Posts: 20,458 ✭✭✭✭✭

    government accounting is so messed up, I am sure there is no real attempt at capturing so-called "full cost" of manufacturing coins (simple stuff like future pensions and other benefits to be paid are likely not built in to the formula). It's government. What they tell us is never all true.

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    CaptHenwayCaptHenway Posts: 31,564 ✭✭✭✭✭

    @BillJones said:
    Seigniorage is the profit a mint makes from producing coins. It's the difference between the face value of the coins and their cost of production.

    I suppose you could say that the modern Cents and nickels earn "negative seigniorage" for the modern U.S. mint system.

    This.

    Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
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    BLUEJAYWAYBLUEJAYWAY Posts: 8,049 ✭✭✭✭✭

    "Si Senor(age)".

    Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
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    BillDugan1959BillDugan1959 Posts: 3,821 ✭✭✭✭✭
    edited November 4, 2017 12:43AM

    @Barndog said:
    government accounting is so messed up, I am sure there is no real attempt at capturing so-called "full cost" of manufacturing coins (simple stuff like future pensions and other benefits to be paid are likely not built in to the formula). It's government. What they tell us is never all true.

    'Materiality' is a primary principle in all forms of accounting.

    https://www.accountingcoach.com/blog/what-is-materiality

    How do you build the cost of a future pension to be paid staring in the year 2047 (thirty years from now) into the total cost of a single one cent coin struck in the year 2017?

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    renman95renman95 Posts: 7,037 ✭✭✭✭✭

    TDN has best and most accurate answer.

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    CoinstartledCoinstartled Posts: 10,135 ✭✭✭✭✭

    Ditch the Stetson..
    Forget the bolo..
    Few are as savvy..
    As my friend Rollo!

    Burma Shave!

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    RogerBRogerB Posts: 8,852 ✭✭✭✭✭

    "Seigniorage" is the numismatic name for a married woman, sometimes your wife. A "seignioragetta" is the term for your daughter. ;)

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    pocketpiececommemspocketpiececommems Posts: 5,748 ✭✭✭✭✭

    Wonder if has ever been used in the National Spelling Bee

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    pocketpiececommemspocketpiececommems Posts: 5,748 ✭✭✭✭✭

    Pronounced "ignore you age". B)

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    BackroadJunkieBackroadJunkie Posts: 3,745 ✭✭✭✭✭

    @Barndog said:
    government accounting is so messed up, I am sure there is no real attempt at capturing so-called "full cost" of manufacturing coins (simple stuff like future pensions and other benefits to be paid are likely not built in to the formula). It's government. What they tell us is never all true.

    They do issue an annual report every year, with line items such as operational and administrative costs. Here's the link to the 2016 report.

    US Mint 2016 Annual Report

    @JBK said:
    This brings up a question I had - does the Mint/Treasury count the bullion coin programs in the overall seignorage calculation? It must cost close to $20 to make a $1 Silver Eagle, for example.

    Seignorage doesn't affect bullion, since it's sold as a product, with a tangible net income on sales. (See page 10 of above report.)

    @JBK said:
    I always assumed they would not calculate seignorage on bullion, but I just don't know if or where they draw the line (do they calc. seignorage on ANY collector coins the mint sells, from commems to proof sets?).

    They do. See page 15/16 of above report.

    If you've never read one of the Mint's annual report, they're pretty interesting, from cost of manufacture to the coins produced during that calendar year...

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    RogerBRogerB Posts: 8,852 ✭✭✭✭✭

    Internal accounting at the Mint Bureau is and has long been very detailed. The files for coins made for other nations, for example, go into numbing detail for every phase of production and fulfillment.

    The reality is that governments are much more detailed than most businesses in their accounting of funds. Governments have to answer to pubic and oversight requests for information - businesses do not.

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