Posted 04/18/2007 5:03 pm
quote:
what is wrong about the government storing a surplus of coins compared to printing the notes? With all the collectors saving the coins and the amount they hold on to how can the government go wrong?
The problem is they are still printing the notes. The notes wear out and they have to be replaced, and replaced again, and replaced again and so on. During the average lifespan on the coin which costs about 12 cents to produce, the note costs almost two dollars to produce and replace. And then there are the storage charges for the coins for all of those years. So over the life time of the coin, if they stop the notes it costs the government 12 cents to keep that dollar in circulation, with the dollar and the coin it costs the government probably 3 to 4 dollars to keep a dollar in circulation.
If the collectors would gather and hoard all of the dollar coins then yes the government would probably be in good shape with them. But do you really think the roughly one to two million serious coin collectors (I don't believe the Mints 125 million collectors figure) could absorb 1.8 billion coins into their hoards each year? That's 1,000 dollars per collector per year. And you have to keep them in hoards, because if you try and circulate them they go right back to storage in the vaults and your right back where you started.
No if they don't freely circulate, they will fail, and they won't freely circulate alongside the dollar note.
Edited by Conder101
04/18/2007 5:05 pm
04/18/2007 5:05 pm
