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Posted 07/11/2020 10:16 pm
So, I have been thinking about this issue a little, which brings me back to the post by DelawareMatt with the Fed's statement on the coin shortage:
So, here is how my brain sees this, but I hope that @pacomartin (and others) will see this thread and inject their wisdom:
1. the total amount of coin in the U.S. economy has not changed much. If anything, it has increased slightly according to that Fed announcement. So, we can say at worst it is a zero sum situation. By this I mean that if inventories are low in one place, then they must be high in some other place. It also means that we can take the mint out of the picture as a cause of the problem (if they were part of the problem, the total amount of coin would be decreasing).
2. that leaves these players enumerated in the Fed announcement: the Fed itself, armored carriers, banks, retailers, consumers.
3. I am going to give the Fed the benefit of the doubt and say they are not hoarding coin and then wondering why it is scarce and forming a study group. That leaves armored carriers, banks, retailers and consumers.
4. We have anecdotal evidence here that inventory at banks is low. There is always the possibility that it is only low at banks where CCF members go ask for coin rolls but I am guessing we are not a big enough factor to have this kind of impact, even though some of the CRH folks here sound like they have insatiable appetites
)
5. Retailers. Kroger is America's 3d largest retail corporation, and they have low coin inventory problems. Of course we haven't heard yet from Walmart (#1) who dwarfs everyone else. Could it be that Walmart is hoarding coin to cause problems for its competition? Nahhh.
6. Armored carriers. Really? You think these guys are hoarding coins?
7. That leaves us with ... CONSUMERS! Yep, you and me and the family next door. We can't recycle coin into the economy if we are forced to stay at home, can we? Or, if we are out and about and buying stuff, do we really want to use filthy cash these days? Of course not. Everyone wants touchless transactions (never mind that there is no proof that COVID has ever been contracted from a Lincoln, a quarter or a dollar bill).
So, remind me why we need a Fed study?
Quote:
The coin supply chain includes many participants, from the U.S. Mint who produces new coin, to the Federal Reserve who distributes coin on the U.S. Mint's behalf, to armored carriers, banks, retailers and consumers, all of whom have a role to play in helping to resolve this issue.
The coin supply chain includes many participants, from the U.S. Mint who produces new coin, to the Federal Reserve who distributes coin on the U.S. Mint's behalf, to armored carriers, banks, retailers and consumers, all of whom have a role to play in helping to resolve this issue.
So, here is how my brain sees this, but I hope that @pacomartin (and others) will see this thread and inject their wisdom:
1. the total amount of coin in the U.S. economy has not changed much. If anything, it has increased slightly according to that Fed announcement. So, we can say at worst it is a zero sum situation. By this I mean that if inventories are low in one place, then they must be high in some other place. It also means that we can take the mint out of the picture as a cause of the problem (if they were part of the problem, the total amount of coin would be decreasing).
2. that leaves these players enumerated in the Fed announcement: the Fed itself, armored carriers, banks, retailers, consumers.
3. I am going to give the Fed the benefit of the doubt and say they are not hoarding coin and then wondering why it is scarce and forming a study group. That leaves armored carriers, banks, retailers and consumers.
4. We have anecdotal evidence here that inventory at banks is low. There is always the possibility that it is only low at banks where CCF members go ask for coin rolls but I am guessing we are not a big enough factor to have this kind of impact, even though some of the CRH folks here sound like they have insatiable appetites
)5. Retailers. Kroger is America's 3d largest retail corporation, and they have low coin inventory problems. Of course we haven't heard yet from Walmart (#1) who dwarfs everyone else. Could it be that Walmart is hoarding coin to cause problems for its competition? Nahhh.
6. Armored carriers. Really? You think these guys are hoarding coins?
7. That leaves us with ... CONSUMERS! Yep, you and me and the family next door. We can't recycle coin into the economy if we are forced to stay at home, can we? Or, if we are out and about and buying stuff, do we really want to use filthy cash these days? Of course not. Everyone wants touchless transactions (never mind that there is no proof that COVID has ever been contracted from a Lincoln, a quarter or a dollar bill).
So, remind me why we need a Fed study?
