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Bedrock of the Community
United States
17884 Posts |
Quote:
Another weird thing I encountered was where some sites say in the countries where they switched, it takes at least 2 dollar coins to replace every dollar. This isn't supported by the mintage figures of the coin in places such as Canada or Great Britain. |
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Bedrock of the Community
United States
10038 Posts |
jbuck said: Quote:
If the cent lingers on, rip the spring-clip out of the slot that currently holds the one dollar note and put the dollar coins there. The added benefit is supporting the habit of getting "one dollar" from that location. Like I said - Yankee ingenuity  Another valid point you make is that it is probably the politicians and not the people's voice that keeps the dollar bill going. Earle42: Quote:
Another weird thing I encountered was where some sites say in the countries where they switched, it takes at least 2 dollar coins to replace every dollar.... Conder101's response Quote:
This isn't supported by the mintage figures of the coin in places such as Canada or Great Britain. Like I said, I thought this weird also.: Here is the link - the Federal Reserve Bank of Cleveland: http://www.grocheteau.com/papers/Th...the%20US.pdfOn the third page, in the gray box, the second point. Quote:
Then, adjust for the fact that more coins will be needed than notes ... the experiences of foreign countries have shown that the demand for coins is different from the demand for notes. According to a 1990 study by the General Accounting Office (now renamed Government Accountability Office), if the one-dollar note were removed from circulation, 25 percent of the one-dollar note demand would be absorbed by two-dollar notes, which currently do not circulate very widely. The remaining 75 percent would be replaced by coins, but at a ratio of one to two: each dollar note would be replaced by two one-dollar coins. An interesting thing here is that if there is NOT a need for double the number of coins, as Conder has said, then the calculations of this report (which agree with the generally accepted total savings figure of "$5.6 G over 30 years) go haywire again! Since this is an eight year old report, and Conder has told us the production numbers do not show a need for a 2:1 replacement ratio, this means the total savings calculation is halved.  Why? Their "$5.6G over 30 years" savings was computed by doubling the actual needed/produced amount of coins. Since the mint would only be making HALF this number, their profit (return to the Fed) would only be half of what the calculations used to arrive at their total. So their final answer becomes halved, resulting in $2.8 G over 30 years.  The deeper one looks, the less cut and dry the reality of the situation seems to follow. There are just too many angles//people/agencies (that most people think are federal and are not)/ bureaucrats involved! I am beginning to think any result can be gotten on paper concerning this issue. How much squash could a Sasquatch squash if a Sasquatch would squash squash? Download and read: Grading the graders Costly TPG ineptitude and No FG Kennedy halveshttps://ln5.sync.com/dl/7ca91bdd0/w...i3b-rbj9fir2 |
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Pillar of the Community
United States
1796 Posts |
Well the GAO makes it rather cut and dry (for the fifth time in 20 years). Here's the full study that was completed this past March, assuming a 4-year transition period from the $1 note to the $1 coin: http://www.gao.gov/new.items/d11281.pdfThey estimate an average yearly benefit of $184 million over a period of 30 years. They also list their methodology and all aspects of their model, too. Looking it over with a critical eye, I'm not seeing any glaring holes in it. In regards to the "2 to 1" ratio, they do take that into account on page 11: Quote:
The assumption that contributed the most to the net benefit we estimated
was the replacement ratio of coins to notes. Following the example of
other countries that have replaced a note with a coin of equal value, we
assumed that, because of differences in how people use these two forms
of money, the public would need more than one coin for each note that
had been in circulation. It is common for people to take coins out of their
pockets and store them at the end of each day rather than retain them in
their wallets as they do notes, for use the next day. These factors cause
coins to circulate with less frequency than notes. Thus, for any given
denomination of currency, a larger number of coins would need to be
maintained in circulation to meet the public's demand for cash than would
be needed if that denomination were provided in notes.
We previously reported that when Canada replaced its $1 note and the UK
replaced its £1 note with a coin, both countries used a 1.6-to-1 replacement
ratio. However, in both cases, once the transition was complete, coin
production was very low or even nil in some years. Therefore, we
determined that a 1.5-to-1 replacement rate would be appropriate for our
analysis--low enough to avoid an excess of $1 coins without creating an
undue risk of producing too few. Our analysis thus assumes that the
number of $1 coins issued is 50 percent greater than the number of $1
notes that were in circulation. This assumption of increased production
results in substantially increased seigniorage and accounts for our
estimate of a net benefit to the government over the 30-year period of the
analysis. |
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New Member
 United States
19 Posts |
Thank you SteveCaruso. I don't believe any one, or even all of us together, here at CCF is going to be able to conduct as rigorous an analysis as the GAO on this matter. It's obvious that they have looked at the issue in depth and muiple times and have arrived at the same conclusion. Switching saves money.
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Moderator
 United States
188770 Posts |
Quote:
It is common for people to take coins out of their pockets and store them at the end of each day rather than retain them in their wallets as they do notes, for use the next day. These factors cause coins to circulate with less frequency than notes. A good explanation. As I said, I am always open to the evidence. In my own personal experience, I have a very bad habit of letting cents, nickels, and dimes accumulate in the change jar, but my quarters are used almost as fast as I get them (after making sure I do not need them for my collection, of course). I would treat the dollar coin the same way. That is, I have always considered quarter more than just pocket change. This is just my personal opinion, your results may vary.  |
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Pillar of the Community
United States
4132 Posts |
I notice the same thing with quarters. Makes me wonder why we bother with cents, nickels and dimes at all. Just round every transaction to the nearest quarter, which is the smallest coin that people seem to be willing to actually carry. On average, you'll round up as often as you round down, so you won't lose out, but you get rid of the whole change-jar-and-taking-coins-back-to-the-bank dance.
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Pillar of the Community
United States
959 Posts |
Well, there goes my collection. I wonder how much the Mint will rob us for to keep our collections going?
In my opinion, they are already robbing us.
$50 worth of coin for 2 rolls.
Almost $80 with shipping from the Mint.
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Bedrock of the Community
United States
10038 Posts |
SteveCaruso - thanks for finding this report. It is good to see this one included a lot of the extras that crop up. I still would like to be able to find the actual numbers they use for the calculations (curiosity). I can see where they take into account the switchover returns to the government. I am just wondering what the cost per individual will actually be as in increased initial costs and passed-on-costs from businesses (like the bank handling costs etc.) having expenditures related to the coins. I realize it is all moot now (unless they eventually recover from the political aspect and do a complete switchover).
This last report, at least, is very open about not trying to say their will be no "weight issue" (section of $2.00 bill usage). I still have to say I am never in favor of the government forcing something on us when no morality is violated. But I guess this all goes back to the age old argument of how much should the government "nanny" us b/c, as a nation, we are not capable of doing things best for ourselves. To a degree, there is a need, but throughout our history we have never been able to decide just how much. If I have to choose between the two, I tend to go with the old saying that government is not the solution, it is the problem.
Too bad the politics are in the way of polymer bills for now. Maybe this whole coin business, a few years down the road, might be able to get the polymer notes more seriously looked at and taxpayer money will be helped.
How much squash could a Sasquatch squash if a Sasquatch would squash squash? Download and read: Grading the graders Costly TPG ineptitude and No FG Kennedy halveshttps://ln5.sync.com/dl/7ca91bdd0/w...i3b-rbj9fir2 |
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Pillar of the Community
United States
6326 Posts |
As far as the Prez dollars go.....won't miss em'.....don't ever see em'. I do a couple Date set folders for the Nephew and daughter, but they're just taken from BU rolls at the bank, if this stops, I really doubt I'll be putting Mint Set Prez dollars to continue.....but maybe. And as long as I can still continue with my Presidential dollar Proof album, I'm good.  |
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Pillar of the Community
United States
1302 Posts |
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New Member
United States
19 Posts |
I suspect the popular spin on all of this from certain corners will be how much of a boondoggle this was and that anything the govt does is doomed to failure and/or massive waste, and how they shouldn't be pushing things like this on us...etc etc. When in fact the opposite is the case here. The govt should have been *more* forceful in something like this where the externalities (i.e., costs) of giving in to individual preferences (against dollar coins) hurts the collective group of us. Govt leadership is not just a solution here, it is *the* *only* solution. No other organization has the power or authority. Now after this latest failed attempt (SBA's were in fact too much like Quarters so that was stupid not to see) how long will it be before the next attempt can even be made to bring the U.S. into the modern world of circulating coins and currency? A long time I fear. Sigh.
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Moderator
United States
188770 Posts |
Quote:
I still have to say I am never in favor of the government forcing something on us when no morality is violated. But I guess this all goes back to the age old argument of how much should the government "nanny" us b/c, as a nation, we are not capable of doing things best for ourselves. I generally believe that when it comes to government, less is better; even when it comes to moral issues (again, a subject for another forum). However, in this case, they make the money, they make the rules. That is, they could force anything on us they want "for the common good." This is, after all, a Republic. We do not directly make the decisions, our elected representatives do; and they often just let the "machine" run its own course and retroactively justify it. If the manufacture and distribution of our money were left entirely to a free market, then the market would decide whether the dollar note made by Company A is preferable to the dollar coin made by Company B.  |
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Bedrock of the Community
United States
10038 Posts |
Quote:
I generally believe that when it comes to government, less is better; even when it comes to moral issues I was referring to things like I am glad they make murder illegal! I also see your point about the government being the ones who make (well - sort of) the money. And what you say unfortunately, is true of our elected officials also. They are SUPPOSED to listen the the people who elected them. But, when you get behind the scenes, there is a lot of nonsense that goes on. When it comes right down to it - according to the Constitution - isn't the government actually breaking the law anyway by making money not of silver or gold? Quote:
If the manufacture and distribution of our money were left entirely to a free market, then the market would decide whether the dollar note made by Company A is preferable to the dollar coin made by Company B. Reminds me of the Liberty Dollar situation! |
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Moderator
United States
188770 Posts |
Quote:
I was referring to things like I am glad they make murder illegal! If you are interested in my view, feel free to PM me. Quote:
When it comes right down to it - according to the Constitution - isn't the government actually breaking the law anyway by making money not of silver or gold? The Constitution places this limitation on the States, but not on the Federal government... Quote:
Article I Section 10 Clause 1
No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts; ... |
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Bedrock of the Community
United States
10038 Posts |
Thanks for the clarification on the gold/silver thing. Too bad it is not the same for the Fed also.
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Posted 12/15/2011 10:18 pm
