Posted 07/26/2012 04:47 am
The "survival rate" of an obsolete coin type seems to me to have numerous factors, important among which are:
- Whether the obsolete coin can be readily bought for face value and melted for profit;
- How much control the government or central bank has over individual bank branches;
- The proportion of coin collectors and coin hoarders in the population.
Let's take an extreme case: the United States. While it is certainly profitable to withdraw bronze cents and silver dimes, quarters and halves, a great many of them still "survive in the wild". This can readily be explained by factoring in the next two components: a very decentralized banking system that is not actively withdrawing and remelting old coin at all, and a very large collector/hoarder population whose heirs are constantly dumping "new" finds of old coins back into the system.
As a general rule, the half-life of a typical circulating coin is about 20 years. That is, about half of the original mintage is gone after 20 years, through wear, withdrawal, loss, damage and being souvenired by tourists. This figure is lower for "soft" metals like gold, but higher for "hard" metals like nickel and steel. After about 100 years, the number of survivors is down to about 2%, by which time most of the survivors are in the hands of collectors and further losses are greatly reduced. Scarce dates and commemorative coins have a much longer half-life because they tend to be snaffled up by the coin collectors rather quickly, and are more likely to be recognized by the heirs as being "unusual and valuable" and therefore not to be redeposited at a bank.
In this sense, coin collectors fulfil the same role as hoard burials had back in ancient times, because it is estimated that only 1 to 2 percent of ancient coins have survived to this day.
- Whether the obsolete coin can be readily bought for face value and melted for profit;
- How much control the government or central bank has over individual bank branches;
- The proportion of coin collectors and coin hoarders in the population.
Let's take an extreme case: the United States. While it is certainly profitable to withdraw bronze cents and silver dimes, quarters and halves, a great many of them still "survive in the wild". This can readily be explained by factoring in the next two components: a very decentralized banking system that is not actively withdrawing and remelting old coin at all, and a very large collector/hoarder population whose heirs are constantly dumping "new" finds of old coins back into the system.
As a general rule, the half-life of a typical circulating coin is about 20 years. That is, about half of the original mintage is gone after 20 years, through wear, withdrawal, loss, damage and being souvenired by tourists. This figure is lower for "soft" metals like gold, but higher for "hard" metals like nickel and steel. After about 100 years, the number of survivors is down to about 2%, by which time most of the survivors are in the hands of collectors and further losses are greatly reduced. Scarce dates and commemorative coins have a much longer half-life because they tend to be snaffled up by the coin collectors rather quickly, and are more likely to be recognized by the heirs as being "unusual and valuable" and therefore not to be redeposited at a bank.
In this sense, coin collectors fulfil the same role as hoard burials had back in ancient times, because it is estimated that only 1 to 2 percent of ancient coins have survived to this day.
Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
