Goals of the US Mint?

You can't value a manufactured product as the cost of the raw materials. That would be like saying a book is worth only the cost of the blank paper it is printed on or that a DVD is worth only the cost of the plastic it is made of.

Besides, the value of anything is what people are willing to pay for it. What's the value of metal in a 1914D Lincoln cent in MS65 red?

 

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Poor analogy since the Treasury Department is not a stockholder of the U.S. Mint which is also not a corporation. The Mint is a government subsidy and they're goal is not to make maximum profit ever, they're goal is to pay their bills and operating costs. The USPS is another fine example of a government subsidy, they are not out to make profit. (Sadly they use lose more money than they currently take in)

From what I understand, it's not just the cost of the metals in the coins that drive the cost, you have to also factor in the operating costs, etc. The penny might cost them .005 in metal content but the manufacturing, employee salaries, etc all factor in as well.

 

re: businessmen running amok

I am careful, always, about saying that businessmen know how to solve every problem. Even before the great recession, we saw the economic problems caused by the old "common sense" notion that an MBA could run most any kind of business. T'ain't true.

the best I can say for the "businessmen rule" approach to government is that it contains an important truth: large bureaucracies need some way to better connect with the public, and they need "accountability" to the public rather than a "public be damned" attitude (hard to shake, since really why should a government employee treat any one particular citizen any different from anyone else?).

 

Thats true. But when you consider they produce millions of coins a day, the cost factor for labor and other expenses divided by the amount of product produced probably isn't even a 1/10 of a cent more than the cost of the material.
Guy

 

Guy, not to disagree but,

http://www.coinflation.com/

lists metal values in current US coins. Last I heard it costs the mint almost 2 cents for every new cent, and almost 8 cents for every nickel. It sure looks like the difference between metal cost and total costs from the mint are much more than 1/10 of a cent.

 

1/10 of a cent additional is what I meant, not including materials. That was in reference to labor costs, not metal costs. So, if it cost 2 cents to make a cent, 1/10 of that is probably labor, when factoring in the billions minted yearly.
Guy

 

Mission
The primary mission of the United States Mint is to manufacture and distribute circulating coins, precious metals and collectible coins, and national medals to meet the needs of the United States. In addition to producing coins and medals, the United States Mint also maintains physical custody and protection of the Nation's gold and silver assets.

I didn't read this thread as I'm guessing it's another complain about the Mint one.
But the above is the Mission Statement for the Mint.

PS I love the mint. Like the new 25th Eagle set's, like the limited mintage of them, I like the limit of 5 per house and like the price they set and think that their ordering system could use some improvements but they shouldn't spend tons of time and money doing so because we all go crazy and try to get in ordering a product once a year.

All in all I give them a B on this set contrary to popular complaints here atm.

 

I understand sir, but if the melt value of a cent is half a cent, and it costs the mint about 2 cents to produce it, to me the difference is conversion costs. That 1.5 cents is hard to reconcile with 1/10 of a cent labor costs. Sure, the metal will cost more than melt to have it in strips or blanks, but probably not that much more.

 

It would be interesting to run those numbers to see how much in overhead they really have then. Maybe the guy that oils the gears is bringing in a few million a year in wages or something.
Guy

 

Guy, you are probably correct if thinking only direct line people. However, their total overhead will include some for engravers, director, HR personnel, accountants, etc ad nauseum. The average Federal worker gets around $80k per year, and in the mint with actual experience needed it may be more. Like many have said governments aren't terribly efficient, and by the time you add all of these other personnel up, I am afraid you may be looking at closer to over a cent per coin.

It would be interesting if the mint releases further cost breakdowns where all of the expenses are. I am sure some of it was even involved in the whole shipping dollar coin scam.

 

I think it is pretty accurate, and the Treasury is the sole stockholder.

If their goal was just to pay their bills and operating costs why don't they stop coining once those goals are met? Instead they keep on going and turn over 300 million dollars to their sole "stockholder". Sounds like maximizing profit to me. And I see a government subsidy as something the government pays money INTO not takes money out of. The Mint is a government subsidizer.

 

You're just now throwing words out there to make it seem as if the Treasury Department is a "For Profit" business with stocks and stock holders, which it isn't.

Clearly you don't understand what the mint does besides mint coinage. They mint to meet the demands for circulating coins for the United States, not just to make money from them.

The Mission of the Mint:

The primary mission of the United States Mint is to manufacture and distribute circulating coins, precious metals and collectible coins, and national medals to meet the needs of the United States. In addition to producing coins and medals, the United States Mint also maintains physical custody and protection of the Nation's gold and silver assets.

If they wanted to maximize profits, why stop the latest 25th ASE Anniversary set at just 100k that sold out in 5 hours? Huh? Poor analogy and no, the mint is not out to make maximum profit because if they were doing that, they're doing a very poor job at it because they could mint a whole lot more money to make more money but you know, that would be bad because then inflation would turn around and make it all worthless.

 

The Treasury Department does:

"Treasury promotes economic growth through policies to support job creation, investment, and economic stability. Treasury also oversees the production of coins and currency, the disbursement of payments to the public, revenue collection, and the funds to run the federal government."

So the "stockholder" isn't even out to make a profit either, it would be illegal for them to do so. So saying the Mint is out to maximize profits just to hand any extra revenue after their own bills to another non-profit, they're just all out to maximize profits. Sure! Pigs can fly too!

 

They make the coins that the treasury and Congress tells them to make. That's the main goal.

As far as maximizing profits goes, it is unclear. I'm sure they try to keep costs down, which helps maximize profits. The Philadelphia Mint doesn't appear to be very lavish. In fact, the visitor center is terribly outdated. As far as setting prices for bullion and collectibles, I don't know how much profits are considered.

 

IMO US mint needs to start issuing coins that have appeal beyond the borders, they need to start looking at what Perth Mint has done.

 

jjack, Im not sure you can make that as a direct comparison as the US Mint is a government institution through and through and the Perth Mint is a privately managed (GOLD Corp) business that is actually owned by the government of Western Australia.
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Logically, the Mint would have no goals. The Mint has mandates issued by the US Congress to carry out.

Beyond that, mint management knows they will look better and may increase job longevity if they can show greater profits each year. That can be difficult when you are losing money minting most of Americas pocket change. Those modern layered coins are expensive and so a nickel or cent costs more to produce tha its face value. That has not happened many times in the history of the Mint. Thats one reason they overcharge for cartoon coins, trying to balance the books. Fortunately they seem to have an ever increasing interest in design and quality.

My suggestion to the mint managers would be to read a book on customer service. On the other hand, government mandated service and customer service may not mesh easily or logically. Much like 'military intelligence'

The letter of regret that you received is certainly showing some glimmer of hope. The Mint doesnt always seem to be aware of collectors and we have to remember we are only a minute piece of the action compared to the Mints mandates.

 

Just a simple case of their server messing up, which happens from time to time.