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 Replies: 80 / Views: 10,792 |
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Pillar of the Community
United States
4132 Posts |
I lived in Michigan and traveled to Canada frequently (we went Stratford regularly), but I don't recall all that much discussion of the Loonie beyond the novelty of it. I was 10 in 1987 though.
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Moderator
 United States
188770 Posts |
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I am not sure if jbuck was saying he was close to Canada back in 87 or if he meant he had been associated with Canada within the last 12 years (based on his comment on almost marrying a Canadian girl). I was four hours from the border from 1978 to 1980; close enough to frequently find Canadian coins in change, which was very good for me as a new collector! For the record, there were about 850 miles and 14 hours between me and my special friend.  Quote:
If he was saying he experienced it in '87, since his information is diametrically opposed to what I experienced, I am left not knowing if my/his experience was regional or not. If he was 13 years later, then I know attitudes changed up there by then. I believe my previous post was written while you were working on yours. As I said above, my time frame was the mid to late 1990's, plenty of time for wounds to heal.  This had turned out to be a great discussion.  |
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Bedrock of the Community
United States
10038 Posts |
jbuck: Quote:
I think we would survive as well. I also believe the long term gain is much greater than the short term loss. Definitely survive - grudgingly at first - and then probably forget the matter anyway. I am still going to look into the math of it all. I DO suspect there would be savings, but am not quite sure that it is as large as has been claimed. I saw a whole new set of costs related to the crossover such as costs for making new cash register drawers (seems a small issue until we look at all the cash registers that must be out there); revamping machines to take the dollar coin (mostly already spent money), costs of transporting increases. 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. The only thing I recall reading on their claims on this is they say the added number is needed to fill needs such as the amount of coins that need to be in machines for change. But the sites that were saying this already said this 2/1 ratio cost was already computed in their total savings over 30 years. Admittedly, I am not working the math right now - meds make me foggy! So here is a question along these lines - if polymer notes were proposed and were shown to be cost effective - then would the pro-coin people still want the coins (for circulation?). |
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Pillar of the Community
United States
1007 Posts |
Man oh man, I go out of town for a couple of days then the government finally takes my advice. This is something I thought they should be doing for years.... just mint the Presidential coins for the collector, no more than 4 -5 million per year. This should savbe quite a bit of taxpayer's money. I like the Native American dollar much more anyway. |
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Moderator
United States
188770 Posts |
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Definitely survive - grudgingly at first - and then probably forget the matter anyway.  Quote:
I am still going to look into the math of it all. I DO suspect there would be savings, but am not quite sure that it is as large as has been claimed. I saw a whole new set of costs related to the crossover such as costs for making new cash register drawers (seems a small issue until we look at all the cash registers that must be out there) We should kill the cent with the dollar note. When that happens, everything moves over one spot. 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. 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. The only thing I recall reading on their claims on this is they say the added number is needed to fill needs such as the amount of coins that need to be in machines for change. I do not buy it, but am open to any evidence. Quote:
So here is a question along these lines - if polymer notes were proposed and were shown to be cost effective - then would the pro-coin people still want the coins (for circulation?). I do not think it could even happen. I feel that politics, not public opinion, keeps the one dollar notes in circulation. Taking profit from the linen maker and giving it the polymer maker could not happen in the same political atmosphere that prevents shifting it to the metal interests. But, for arguments sake, lets say it was an option without major opposition from special interests. I would support it. My only issue is that we already have over 1.4 billion one dollar coins just sitting there begging to be circulated. Call it a head start. Quote:
This should savbe quite a bit of taxpayer's money. As mentioned earlier, this is a fallacy. Money is actually lost, not saved, because of the loss of seigniorage. What Conder said earlier should be repeated... Quote:
The problem is it DOESN'T save any money and in fact is going to COST the country extra money. There really is no savings because the 50 million dollar cost of production is paid back by the seniorage profits. So that means ZERO cost. Then the profits from the coins also puts 300 million dollars a year into the Treasury's general fund. By stopping the production that means 300 million dollars LESS money coming in each year. Now that 300 million has already been figured into the future budgets. This means that to make up for its loss the government is going to have to BORROW an extra 300 million dollars a year. That means stopping the dollar coin results in an INCREASE in the national debt of 300 million dollars a year plus interest.
The real key to saving taxpayers money would be to stop having to pay storage for the coins. The way to do that would be to get them out of the vaults and into circulation. The way to do that would be to stop the dollar note. Instead we spent 600K for a new storage building that we now don't need because we are stopping the coin.
They won't melt down the 1.4 billion coins in storage because they would have to show a 1.4 billion dollar loss on the books. Instead they plan on just letting the normal monthly drawdown eventually consume them all. Monthly drawdown is about 6 million coins a month or 72 million coins a year. At that rate it will take 20 years of paying for storage before they are all gone (Not the ten years they claim). |
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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. |
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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.
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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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Replies: 80 / Views: 10,792 |
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Posted 12/15/2011 3:15 pm
