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 Replies: 25 / Views: 3,983 |
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Valued Member
United States
442 Posts |
First of all Happy New Year! Now I really DO have to ask the question why the U.S. is bothering to mint One Dollar coins. Until we get rid of the Paper Dollar it's a waste. Being a fan of paper money as well I'd hate to see this but seriously that IS the only way it has a chance of making any sense at all. Don't believe me? Then let me draw on an article by Coin World that my coworker found on line. It seems we now have a 12 YEAR inventory of dollar coins sitting in Federal Reserve Banks and contracted armored carriers. Total amount? 857 MILLION DOLLARS! There are so many the Federal Reserve Banks are looking toward other avenues due to vault restrictions and insurance limitations. Some of the surplus actually comes from "dollar coins returned by depository institutions". What? Oh banks are returning them. The biggest surplus seems to be in Presidential dollars but the Native American pieces are building up too. Hey, you can order those from the mint at face value and get free shipping. Does that tell anyone anything? We ordered them at work. Demand was pathetically low. We give them away as change now. Okay, I'm touching on the iceberg here folks. Those that know me also know I've NEVER been a fan of any of the new dollars. Well, this is a big part of it. I work in a coin shop. We have them all. We sell them at $1.50 each because that's part of our business. Why a premium? - because we trade with other dealers in other parts of the country so we can get coins from both the Philadelphia and Denver mints. That's what our customers demand, and as a coin shop, that's what we supply. We have thousands of them and they take up a lot of space. I'm not raising this point to knock those that collect them. A true high grade coin will garner some money. A "book" filled with them may start a budding collector. There's a lot of history. Kids like them as do parents and granparents for the kids. What I AM saying is that there will be uncirculated rolls of these around for a VERY LONG TIME. The mint needs to take a good look at the stamp hobby. Total overload and a dying hobby. We buy stamps at UNDER face value then use them for mail. Of course the USPS won't buy them back - at least you have that going for you with excess coins. They're still worth a buck. Be warned though. The next time you read about a "low mintage" of a modern coin be it a quarter, a nickel, a dime, a dollar - you name it. How many are sitting in vaults because they are not NEEDED for circulation? A small rant by me and a bit of food for thought. Clembo |
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Bedrock of the Community
United States
10982 Posts |
I believe the mint is making them because they are required by law to do so. I agree that until the day comes that paper dollar notes are retired, these coins will not circulate regularly.
Regarding your comment on mintages: Please be aware that all coins minted are included in the figures released by the U.S. Mint. You seem to imply that only coins released into general circulation are being counted in "low mintage" moderns. This is not the case - all are counted, even those sitting in vaults.
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Bedrock of the Community
United States
14454 Posts |
I think when they first came up with this bright idea they thought it would be as popular as the State Quarters were and they really didn't think it all the way through because they were coming off the high of all the money they made from them. The law is making them keep minting these things even though if they had looked at past experience with dollar coins they should have realized this wasn't going to work because nobody wants a dollar coin and they will never circulate as long as you can have 20 $1.00 bills that weigh the same as $1 coin of the same amount of face value unless they take all dollar bills out of circulation |
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Pillar of the Community
United States
619 Posts |
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Moderator
 Australia
16806 Posts |
This recent thread is on the same topic.  The problem, from a foreigner's point of view, is that you've got two different money-issuing authorities, Treasury and the Federal Reserve, only one of which is under direct government control, and neither of which wants to interfere with a highly profitable arm of their business. $1 notes are profitable to the Fed, because they have to make so many of them. They have to write off unusable notes and pay to destroy them, too, but as long as the number keeps increasing, they're in the black. Stop printing $1 notes and they're the ones facing the huge bill for withdrawing and destroying them. Just as worrying for them, coins would be a loss-maker. The coins cost more for the banks to use than notes, because they're physically larger and heavier than a note, so their costs to security companies that transport them would be higher. The Fed, as the Voice of the Banks, would choose to oppose increased coinage use on this basis; their (potential) profit gained from the (hypothetical) increased issuing of $2 notes wouldn't cover their losses. $1 coins are highly profitable for Treasury - there's more seigniorage on a dollar coin than any other "circulating" coin they make, and every cent of seigniorage earned goes towards the government coffers. Again, as long as nobody goes around destroying the things (forcing the government to buy them back off of you), the government makes money, even if the things just sit around in the vaults and never actually get spent. It's not the Treasury or the Mint's fault the Federal Reserve refuses to stop printing $1 notes. Section 16 Paragraph 8 of the Federal Reserve Act allows them to. If they weren't prohibited by this Act from doing so, they'd probably make 50¢, 25¢, 10¢, 5¢ and 1¢ notes, too. But all your government has to do to get $1 notes abolished and see $1 coins circulating exclusively is to delete those three characters, "$1,", from that paragraph of that Act. Lobbyists for the paper note, particularly those representing the company that makes the paper your notes are made of, have historically been very good at preventing your government from making those tiny changes. Finally, $857 million might sound like a lot, but there are several billion $1 notes out there. They're going to need a much bigger stockpile before they can replace them all, one-for-one.
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
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Rest in Peace
United States
3039 Posts |
TPGs love the coins. High MS grades for those and bullion coins means big $$$$$$$$$.
As I've pointed out before many times, too many things in our "hobby" are about the Benjamins. Sad.
BY the way Sap, nice explaination. Thanks.
Edited by numismo
01/01/2010 09:37 am
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Rest in Peace
United States
1729 Posts |
In case readers missed the message: Don't blame the Mints for all the dollar coins sitting in storage. Blame Congress and the politically-motivated bureaucrats.
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Pillar of the Community
555 Posts |
I've lived in the US and Canada, believe me you do not want to do away with the one dollar bill and repace it with more metal to weigh down your pockets.
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Pillar of the Community
United States
2734 Posts |
Quote:
...more metal to weigh down your pockets. This is precisely why I use Dollar coins instead of Quarters at car washes, parking meters, vending machines, self-checkouts, etc. $1 worth of Quarters = four 24.3mm coins, 22.8 grams total weight $1 coin = one 26.5mm coin, 8.1 grams total weight It always takes less time to deposit one coin than four (this is a big advantage at the car wash, when the timer is running as you deposit coins!). $1 coins load faster than $1 notes in vending machines (and the coins don't get rejected, like notes often do). I would like to see the $1 note replaced with the $2 as the 'common' lowest-denomination note. This would be an easy transition, and it would have advantages for both the 'coin' and 'note' sides. The amount of lowest-denomination bills needed would be reduced, simply because the lowest bill would have twice the purchasing power. That said, the BEP would still be printing a large volume of $2 notes and Crane's paper mills would still be running.... The $1 coin would make more sense for circulation with the $1 note gone, but with the $2 note in its place we wouldn't need to 'flood' the country with a billion $1 coins, as we would have to do if the $5 was the lowest denomination note. With common $2 notes, you would receive a maximum of one $1 coin in your change per transaction (which is less than half the weight of four Quarters, as I point out above). With the $5 as the lowest note, you could have to receive up to four $1 coins in change per transaction. Common $1 notes would start to become 'collectible' over time, and the change to common $2 notes could increase the public's interest in collecting paper money (much like the State Quarters boosted coin collecting). Edited by DNA
01/01/2010 12:52 pm
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Valued Member
United States
436 Posts |
Another thing to think about is the fact the average paper $1.00 note in the US only lasts an average of 18 months. The average us coin lasts 30 years. We spend SOOOOO much more money printing the $1.00 note than we would if we lowered the mintage of dollar coins and let them circulate for more than 2 years.... Think about it this way. The Bureau of Engraving and Printing prints out 38 million notes of varying denomination A DAY! 95% of all notes printed are used to replace damaged notes currently in circulation. 48% of all notes printed by The Bureau of Engraving and Printing are $1.00 notes. Approximately 13,870,000,000 notes are printed per year. That means that around 6,657,600,000 $1.00 notes are printed every year 6,324,720,000 of the $1.00 notes are printed just to replace damaged currency. So basically if we got rid of the dollar we would only need to mint around 400,000 dollar coins per year to account for the loss of the paper dollar. Not that many people use the dollar coin now so we don't really need to account for their current mintage.(example: I was at McDonald's last week and attempted to pay with Presidential dollar coins. I was told " Sir we only take american money ") So we could reduce the total mintage of the dollar coin to a total of 1,750,000 dollar coins per year. This would cover the 400,000 new dollars and give a buffer for damaged coins in circulation. This along with the 857,000,000 sitting in storage is more than enough reason to get rid of the paper bill. |
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Pillar of the Community
United States
4867 Posts |
Why not just phase out the dollar bill a little at a time? Why not just produce fewer and fewer bills each year and maybe the dollar coins will be more prevelant. I think the change would be less drastic in this way and would eventually force the use of dollar coins.
Edited by TheForce
01/01/2010 1:49 pm
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Pillar of the Community
United States
2734 Posts |
I've never had an issue spending my modern $1 coins at McDonald's. Then again, these coins are more commonly seen in the Denver area than they are in other locations. clembo would have a fit if he ever rode the Denver Light Rail system. The cash-only ticket dispensers take notes up to $20, but dispense only Dollar coins as change. This means that if you buy a $2 ticket with a $20 note, you'll get eighteen $1 coins as your change. This is great if you're a 'coin searcher' (you can still find some SBA's) or you want Dollar coins for vending machine use, but most people will spend them ASAP. This means that $1 coins are not total strangers to Denver's cash registers. More " Morgan dollars of the future", they only circulate out west!  |
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Pillar of the Community
United States
2269 Posts |
I never understood why the Federal Reserve needs to have an inventory that contains 12 years worth of Dollar Coins. Doesn't that seem a little excessive, considering the fact that there is little demand for them. While I would rather see a dollar coin circulate over a dollar bill. We all know that it will never gain popularity because we have a choice as to what we carry in our wallet.
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Valued Member
United States
436 Posts |
I think the stockpile is a way to raise money for the government.... think about it like this.
They stockpile a whole bunch of coins for 30+ years. Then they close down the Philly mint. Ironically all of the coins in the stockpile just happen to be from Philly. Then 5 years after the mint closes they release these coins that you can buy at just 2or3X face value. Thus reducing the amount of currency in circulation and increasing the value of the dollar.
It would be like a long term insurance policy for the valuation of US Currency.
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Bedrock of the Community
United States
14454 Posts |
even stores around me complain when you try to pay with dollar coins, they don't want them any more than anyone else does and I have actually been asked if I had any other form of payment. they would have rather taken a check than 20 $1 coins
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Rest in Peace
United States
3039 Posts |
Bryan you're right about some stores. Aren't they required to take payment in any legal tender form ?
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Replies: 25 / Views: 3,983 |
Posted 01/01/2010 04:05 am
