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 Replies: 108 / Views: 18,255 |
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Pillar of the Community
United States
2589 Posts |
JBuck is exactly correct, the problem in South Korea is that inflation has stripped the value from the coins in circulation, and the South Korean government has failed to make higher denomination coins accordingly. If the south korean government made higher denomination coins and removed some of the lower denomination banknotes from circulation, the coins would circulate.
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Pillar of the Community
Canada
5248 Posts |
Jbuck is right, there is little hoarding of $1 and $2 coins in Canada.
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Valued Member
United States
411 Posts |
Well the problem in USA is that inflation has stripped the value of pennies and nickels so that they should be discontinued. Personally, I think that is not the objective of South Korea's decision to get coins to circulate more. It took 37 years for South Korea to issue a banknote worth more than 10,000W. In that time the inflation had reduced the value of the 10,000 Won banknote so much , that people told me they would go to the ATM in Korea and get a giant pile of banknotes. In 1973 a 10,000 Won note was worth US$25, but by 2009 10,000 Won was worth only US$7.77 June 12, 1973 the 10,000 Won banknote is first issued (worth about US$25 in 1973) June 23, 2009 the 50,000 Won banknote is first issued (worth about US$39 in 2009) I think South Korea was reluctant to issue a new banknote simply because they were afraid of counterfeiting by North Korea. I still think they are afraid, so they want to force the country to be capable of going completely electronic on short notice if it needs to. The conventional solution to inflation is to drop the lowest denomination coin and issue higher denomination coins. But I think that South Korea is concerned about the bigger picture. Quote:
Jbuck is right, there is little hoarding of $1 and $2 coins in Canada. I also agree with Jbuck. I think almost any rational person would have to agree. I just don't think that is South Korea's ultimate objective. I do think we should close one mint and only make dimes and quarters from now one. Pennies and nickels aren't worth it anymore. Half dollars are too big. We have been fighting the dollar coins issue for almost half a century, so it is time to simply give up and bow to political will (even if it shortsighted). Edited by PacoMartin
12/06/2016 7:09 pm
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Pillar of the Community
United States
2589 Posts |
The reason dollar coins haven't taken hold is because paper one dollar bills are still in circulation, if the government discontinued producing $1 bills and instead made only $1 coins, they would see circulation.
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Valued Member
United States
411 Posts |
Quote:
The reason dollar coins haven't taken hold is because paper one dollar bills are still in circulation, if the government discontinued producing $1 bills and instead made only $1 coins, they would see circulation. Of course! There is nothing like removing the choice to force a behavior change. The Coinage Act of 1965 removed silver from the dime and quarter, and reduced the silver content of the half dollar to 40%, and forbade the minting of new silver dollars for five years. When President Eisenhower died on March 28, 1969 the decision was made to honor him with a dollar coin. There has not been the political will to discontinue the paper dollar in almost half a century. I think at this point you have to concede defeat and say it is never going to happen. In FY2015 the BEP produced 2,451,200,000 dollar bills. At this point; 3,503,800,000 banknotes $2-$50; and 1,078,400,000 hundred dollar bills. I think the time to make a coin has passed. We should concentrate on encouraging ways to easily make small purchases electronically. |
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Pillar of the Community
United States
4637 Posts |
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In FY2015 the BEP produced 2,451,200,000 dollar bills. At this point; 3,503,800,000 banknotes $2-$50; and 1,078,400,000 hundred dollar bills. I think the time to make a coin has passed. We should concentrate on encouraging ways to easily make small purchases electronically. Generally speaking, older adults, baby boomers, prefer cash for small purchases and want to mitigate any chance of being compromised electronically or have their identity stolen. Younger adults tend to like electronic purchases and likely have less to lose if they get hacked. I work retail, and 75% of all purchases are credit/debit card, and less than 1% are by check. Personally, I carry cash, but never any coins. |
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Valued Member
United States
411 Posts |
SteveInTampa
What do you do if you are paying a lunch bill and it comes to $13.27 ? Do you pay with a credit card, or do you pay with a $20. What about your change of 93 cents, do you leave it as part of the tip?
The US Mint produced 17 billion coins last year, almost fifty times the population. Over half were pennies.
I've said that South Korea is worried about North Korea counterfeiting, but production and circulation of coins is expensive to society. Their government would like to end that cost.
Edited by PacoMartin
12/07/2016 09:48 am
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Pillar of the Community
United States
818 Posts |
Well I can't answer for Steve but if that were my situation, I would probably pay to the next dollar amount since I enter all of the bills I get onto Where's George? and that would be my chance to circulate them. Plus that gives you a chance at getting some old coin in change which doesn't occur very often, but it has happened before.
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Moderator
 United States
189340 Posts |
Quote:
Over half were pennies. Because they get used one time and then tossed aside.  |
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Valued Member
United States
411 Posts |
The US Mint fully acknowledges that it loses 42% and 49% on pennies and nickels. Seigniorage per $1 Issued 2015One-Cent $ (0.42) Five-Cent $ (0.49) Dime $ 0.65 Quarter-Dollar $ 0.66 But there are other costs associated with collecting and counting coins that are born by businesses.
Count Per capita in South Korea
25.4 KRW 50,000 $42.66 banknotes: roughly $50
34.0 KRW 10,000 $8.53 banknotes: roughly $10
5.2 KRW 5,000 $4.27 banknotes: roughly $5
29.4 KRW 1,000 $0.85 banknotes: roughly dollar
45.2 KRW 500 $0.427 coins roughly: half dollar
185.1 KRW 100 $0.085 coins roughly: dime
40.5 KRW 50 $0.043 coins roughly: nickel
164.6 KRW 10 $0.009 coins roughly: penny
Count Per capita in USA
33.6 $100 (many circulating overseas)
5.0 $50
26.6 $20
5.9 $10
8.5 $5
3.6 $2
35.4 $1
Coin counts are not reported but roughly $140 per capita
South Korea could also eliminate it's two smallest denomination coins which are worth roughly a penny and a nickel apiece, and convert the 1000 Won and possibly the 5000 Won banknote to coins. The coins would last longer than the banknotes and there wouldn't be a need to produce as many coins. But the economy obviously is using the larger banknote for private transactions. Most of them are probably innocent like used cars, larger purchases, wedding gifts, birthday gifts, etc. But by eliminating coins completely, every person must have some kind of electronic transfer method. Most will use an app on a smartphone, but some older people will use a card that carries a cash value (similar to ones used by transit systems). Effectively the country will have only two denomination banknotes in wide circulation (10,000 and 50,000 Won banknotes). Even if North Korea does not mount an effective counterfeit operation, South Korea can severely limit the number of these banknotes in an effort to force the underground economy to use foreign banknotes. The 10,000JPY=102,000KRW or the US$100=116,000KRW would be the obvious choices. It will be much easier to arrest criminal activities if they are required to use foreign banknotes or other means. Edited by PacoMartin
12/07/2016 1:03 pm
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Pillar of the Community
United States
4637 Posts |
Quote:
SteveInTampa
What do you do if you are paying a lunch bill and it comes to $13.27 ? Do you pay with a credit card, or do you pay with a $20. What about your change of 93 cents, do you leave it as part of the tip ? If I was being served, I would include the tip and put it on my debit card. The same for take out. I usually carry about $200 cash on me. That may sound like a lot to some of you, but my father once told me, "Son, it's better to have cash on you and not need it, then to need cash and not have it." |
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Valued Member
United States
411 Posts |
The USA coin production in the last five years is $4 billion dollars or roughly $12 per person.
35.535 billion pennies
6.043 billion nickels
10.634 billion dimes
6.985 billion quarters
26 million half dollars
550 million dollar coins
The cumulative circulating coins are worth about $140 per capita. No one really knows how many coins are in the garbage or destroyed.
Last year the mint produced 15 pennies and 3 nickels per capita.
Hypothetically suppose the USA were to announce in four years that they will be minting no more pennies and nickels and half dollars, but the exiting coins out there will NOT be demonetized.
In this hypothetical situation would you be annoyed?
I think I could live with it, but they would have to close one of those mints and retire some of their 1600 employees.
Edited by PacoMartin
12/07/2016 10:05 pm
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Moderator
United States
189340 Posts |
Quote:
Hypothetically suppose the USA were to announce in four years that they will be minting no more pennies and nickels and half dollars, but the exiting coins out there will NOT be demonetized.
In this hypothetical situation would you be annoyed? I would be completely fine with this. My question is if they will they still be minted for collectors. Technically, the half dollars (and dollar coins) are NCLT. I would like to see nickels and cents remain in the mint and proof sets, as the half dollars and dollars are now. |
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Valued Member
United States
411 Posts |
Nickels and pennies probably should be NCLT, as it will remind people that the old coins are still money and should not be hoarded. But if pennies and nickels become harder to come by, stingy people will naturally gravitate towards electronic payments just to get the exact change.
Similarly the introduction of $1, $2, and $5 coins and the discontinuation of printing new banknotes of these denominations will also encourage electronic payments since people don't like valuable coins.
Then we need is to encourage people to use the $50 banknote.
The 2009A color c-note series is up to $688.64 billion as of October 2016 with
$219.84 billion Federal Reserve Bank of New York
$112.32 billion Federal Reserve Bank of Atlanta
IMO President Trump needs to stop the printing of these notes when they get to a trillion dollars. Sooner or later if we keep printing trillions of dollars of these notes, and there is a real counterfeiting scare, then we could destabilize the world. They will not stop, however. It is far too profitable.
Edited by PacoMartin
12/09/2016 12:21 am
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Moderator
United States
189340 Posts |
Quote:
Then we need is to encourage people to use the $50 banknote. I agree. In my experience, the fifty is so much easier to spend than a hundred. I get resistance with the hundred, but the fifty is taken as readily as the twenty. |
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Posted 12/06/2016 6:39 pm
