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 Replies: 40 / Views: 4,944 |
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Pillar of the Community
United States
997 Posts |
Nowadays with electronic banking and commerce we have little use for large amounts of currency, especially coins of high value, in every day life.
The general public has shown its disdain for dollar coins, halves are saved and rarely spent. Many people won't bother to pick up a penny off the ground. Only the nickel, dime and quarter have any real usefulness to the public as coins.
In paper currency the $20 bill is king. $100's are unusual in trade and arouse suspicion that you are a drug dealer when you use them. $50's are almost never seen. $5's and $10's are usually only seen one or two at a time unless you are at a strip club (so I have heard...). $1's fill up your wallet and you can't wait to accumulate 20 of them so you can get rid of them. $2 bills are mere curiosities.
People find it easier to spend using a debit card or a credit card. With low value coins and bills being less useful and high value coins and bills superseded by electronic banking, collectors are going to be the last bastion of coin usage. Even vending machines, the king of coin usage and determiner of metallic content accept cards these days.
As of 2012 only the cent, nickel, dime and quarter are minted for circulation. Soon we could be down to 3 coins in every day use, some sort of reconstituted 5 cent piece, the dime and the quarter.
10 years from now the 5 cent piece can conceivably be where the cent is now, a relatively worthless token used to make change. It is not too far off the beaten path to think the same for the dime. Imagine a world where a Quarter is the lowest value coin in common use. Of course by then it would have to be made of zinc or plastic to keep the raw material value in line...
Take a look at current Mint sets. 2 values (half, dollars from 2 mints) coins are intended for collectors only while 4 (cent, nickel, dime, quarter from each mint) are for circulation. We have an entire mint in SF that makes no circulating coins under its own mark but rather proofs and specialty items only.
As a circulation collector I would love to see the higher value coins being used. I make a point of asking for them at banks and stores when I can so I can spread them around and cherry pick the ones I want to save. The problem is that we are headed down a road where the majority of coins will not be intended for circulation but to satisfy collectors. They then become nothing more than bullion, medals or tokens in my mind. Yes, they still have a nominal face value but if the intent of the device was not to provide a store of value for commerce then it really can't be considered a coin.
I think that it won't be long until the US Mint is out of the coin business as we know it and merely a producer of collector items.
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Pillar of the Community
2222 Posts |
Good commentary n9jig. We'll just have to wait and see. It seems like the Mint does make alot of profit from the collector issues and most circulation coins cost more to produce than they have face value. I will still pick up a penny.  |
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Pillar of the Community
United States
1903 Posts |
I appreciate your view on currency, and I realize it is from your perspective. You do have a few facts wrong though. Firstly the $100 note is by far king. More $100 notes change hands worldwide than any other U.S. note...the $20 isn't even close. Next you say it is easier to use a debt/credit card. I agree with you on large purchases but smaller ones cash still easier. Ask any retail store owner how much THEY appreciate small purchases made with a credit card.....they hate them. Every transaction a retailer makes with a card costs them money....a lot of money. In fact most purchases you make on a card that is less than $5, the retailer LOSES money due to the transaction cost. The credit card companies have just done a great job of keeping the public naive to that fact. Lastly.....why on earth would anyone want the ONLY means of paying debts be electronic? If it is electronic it can be traced, if it can be traced the gov't can see it, if the gov't can see it the gov't can tax it! Cash will never go away if common sense wins out. One thing we forget.....inflation is what drives prices up and "moves the decimal place" over time. Many countries in the world have remonetized their countries due to this fact. You want to make our coins have value again....just remonetize our economy and move the decimal point over two spots and coins are relevant again.
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Bedrock of the Community
Australia
21786 Posts |
Before the advent of widespread use of paper currency, coins were the main basis for commercial transactions.
By 1900 I guess that only 20% of the total value of commercial transactions were in coins.
With the widespread use of electronic banking, I guess that coins would comprise less than 1% of the total value of commercial transactions.
Curious thing:
The total number of coins in the pocket of the average person probably has not changed very much over the last 400 years.
Will there be coins in the future? I think there will be.
Nevertheless, the Mints around the World turn out collector and commemorative circulation coins by the truckload, because it helps to keep their business ticking over.
Edited by sel_69l
02/24/2012 09:06 am
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Pillar of the Community
United States
2295 Posts |
Great writing n9jig. It is a good viewpoint, but I agree more with unholyroller. The $100 note was the note the BEP printed the most last year. They are heavily used by foreign countries. Kind of crazy that it is used more outside of this country than within though.
I can see money being used less, since it is easier for the buyer to use plastic, but I doubt money will ever go away. It is nice that we have a choice on which to use though.
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Pillar of the Community
United States
2589 Posts |
They are also heavily used in commerce, contractors often pay their employees in cash using hundred dollar bills. In the numismatic industry and other high value second hand industries (used cars, ect) they are heavily used in cash transactions. While working at the bank the least used note (besides the two) was the fifty. Many people consider 50's to be large bills and don't like having them in their wallets, yet the people that use large amounts of cash prefer to use hundreds since they don't take up as much space as 50's do. Cash will be around forever. The lowest denominations will always be coins since they are the most heavily circulated, and last longer when produced in metal rather than as paper. I personally believe that the $5 bill should be switched to a coin and a $500 bill should reenter circulation, as they have in switzerland.
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Pillar of the Community
United States
1903 Posts |
I concur...the reissue of the $500 is way overdue. I say...either push the decimal back one or two places or reissue the $500!
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Bedrock of the Community
Australia
21786 Posts |
When a Government of a major economic power issues a Note of the buying power of around the $500 level, a trend will be started, and most other Countries with relatively stable economies will follow suit.
The reason why very large denomination notes are not issued these days has to do with the 'black economy'. It is much harder to track large commercial transactions, if very high value notes are used and taxes are to be applied. That especially applies to drug cartels. I think Al Capone would have been much harder to pin down if $100,000 Bills had been in large scale regular issue, despite the fact that they were actually legal during his 'career'.
Certainly, very high value Notes are no longer issued; electronic banking has eliminated them.
At the other end of the scale, there is an established trend around the World to demonetise the lowest value coins. Looks like there is a fiat money version of Gresham's Law is in operation here.
I hope the CCF is not too much affected by the demonetisation of the U.S. Cent, and that these guys will switch into higher value denominations.
Which brings me to the start of another thread, which mainly affects those who search through rolls:
"Demonetisation of the Penny?"
Edited by sel_69l
02/24/2012 5:54 pm
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Pillar of the Community
United States
2589 Posts |
Many major currencies already issue notes with denominations higher than ours, 200 and 500 euro notes, the 200 and 1000 swiss franc note, Singapore has 1000 and 10,000 dollar notes. While I understand the reasoning behind withdrawing the large size denominations here in the united states, due to inflation the reasoning no longer applies to the $500 note. In 1969 when US large denomination notes were withdrawn the largest size note left was the $100, however back then that note had the purchasing power of over $600 in money today due to inflation.
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Pillar of the Community
 United States
997 Posts |
MY thoughts pretty much echo UnholyRoller in many ways. My thoughts of the $20 being king was geared toward domestic commerce. The $100 is more of a foreign phenomenon and sees much less domestic use except for the occasional cash payroll.
Small credit/debit card purchases are indeed more expensive for retailers, that will need to change if it will be practical for a total coin and currency replacement.
In another thread I proposed that a currency devaluation would make coins and currency approximate prior values. Devaluation by a factor of 10 may not be enough to really make a cent or nickel worthwhile again, but I am afraid the social consequences of a factor of 100 would be a deal stopper.
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Bedrock of the Community
United States
20753 Posts |
Quote:
I think that it won't be long until the US Mint is out of the coin business as we know it and merely a producer of collector items. Naturally. Everything will be outsourced to China for coins.  Quote:
I appreciate your view on currency, and I realize it is from your perspective. You do have a few facts wrong though. Firstly the $100 note is by far king. More $100 notes change hands worldwide than any other U.S. note...the $20 isn't even close. Could possibly be true, but so far I haven't seen a $100 bill used anywhere in the last 20 to 30 years except at a coin show. And even there, not to often. I've been using cash station machines for as long as they've been around and no matter how much I ask for it's always in $20 bills. None that I know of discard $100 bills. And the more I think about it I don't remember seeing a $100 bill for a long time anywhere except coin shows and even there, not often. As to the future of coins and currency, I've mentioned this too seveal times on this forum. Soon enough they will all be gone all over the world. The ability for a computerized monitary system is the only way of the future. So much faster and simpler for a computer to figure out how much something costs in different countries when you come from a different one. Credit and dibit cards are unfortunately the future. It's either that or one standard monitary system by everyone. Edited by just carl
02/24/2012 6:59 pm
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Rest in Peace
United States
9104 Posts |
 , n9jig! |
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Rest in Peace
United States
9104 Posts |
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the reissue of the $500 is way overdue But they'll be used for drug traffic! Nevermind that people who can throw away boats, cars and airplanes, and move weed by the ton, can prolly figger how to move five hundreds instead of one 500. |
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Rest in Peace
United States
9104 Posts |
Quote:
I don't remember seeing a $100 bill for a long time anywhere except coin shows and even there, not often. Could be because 80% of them are sent out of the US. |
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Valued Member
United States
137 Posts |
A very good subject and writeup n9jig. However, one thing that is not taken into account is the different parts of the country. In the non-major cities of the south $100 dollar bills are quite common. A large portion of the people work for cash and are paid in $100. My sister owns a country store and will receive at least 10 $100 Bills a day. When I do side jobs I am routinely paid in $100 Bills.
I do not see coins going away anytime soon. They may be re-evaluated but I do not believe the will disappear.
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Bedrock of the Community
Australia
21786 Posts |
One of the main reasons why $100 bills are used is to avoid tax in private individual to individual transactions, especially for services only, where no goods are exchanged.
What the Tax Man doesn't know, he'll never find out about! No means of doing so.
In Australia, $100 notes are useful for paying utiities accounts in cash at Post Offices. Tax is levied in this case, it just means that you carry fewer notes in your wallet.
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Replies: 40 / Views: 4,944 |
Posted 02/24/2012 08:31 am
