2012 Cent Error

Eps · Sep 9, 2012

Also, it costs barley any to make a 100, 50, or 20 dollar bill

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rodeoclown · Sep 9, 2012

Eps said: ↑

Also, it costs barley any to make a 100, 50, or 20 dollar bill
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Usually 4-5 cents from what I've read. I'm not sure if those calculations are including all the security and such though to produce. I'm not really a bill collector or have read up on the making/cost process of bills.

Eps · Sep 9, 2012

Ya and then they make tons of money on that, and still want to get rid of the penny

mrbrklyn · Sep 9, 2012

Phil Ham said: ↑

OK then, the 2012 ASE set costs $149.95 or to make. A presidential dollar costs $1.00 or more to make. I stand corrected. You win. By the way, it is also a fact that we are the government. We control our destiny; it doesn't control us.
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http://wfhummel.cnchost.com/moneybasics.html

Fiat Money as a Tax Credit

The general acceptance of the government’s fiat money derives from its status as legal tender and from the fact that it is required in payment of federal taxes. Those who have no tax liability have reason to acquire fiat money because it is of value to those who do. Thus fiat money can be viewed as a tax credit, which will be used as a medium of exchange as long as the government widely enforces tax collection.

Base Money

Fiat money held by the private sector is known as the monetary base, which we will refer to as base money. The Fed issues base money when it buys securities from the public for its own portfolio, mainly Treasury debt. It pays by simply creating a deposit at the Federal Reserve Bank for the seller’s own bank. This is known as monetizing the debt.

Bank Money

Banks create deposits, known as bank money, when they issue loans by simply crediting the borrower’s account with a new deposit. The total amount of bank money increases when a bank issues a loan. When a loan is paid off, that amount of bank money vanishes.

The value of bank money is based on the promise that it can be converted on demand into base money at par. Current rules require a bank to hold reserves of base money equal to at least 10% of its transaction deposits. Reserves can be held in any combination of vault cash and deposit at the Fed. There is no required reserve for other bank liabilities, such as savings accounts or certificates of deposit.

Controlling the Price of Reserves

Even if there were no reserve requirement, a bank would have to hold enough reserves at the Fed to cover its depositors' checks, and enough vault cash to meet the demand for withdrawals by depositors. The need for reserves thus creates an active interbank market in which banks lend or borrow reserves among themselves. The interest rate on these short-term transactions is called the Fed funds rate.

The Fed steers the Fed funds rate toward its target through its open market operations. These involve buying or selling securities in the open market to add or drain system reserves as needed to balance the supply and demand at its target for the Fed funds rate.

Any bank in good standing and with adequate collateral can borrow on a short-term basis at the Fed’s discount window. The interest rate the Fed charges is 100 basis points above its target rate for Fed funds. With that large a spread, the discount window is used by banks to cover temporary liquidity problems rather than as a source of reserves to back further lending.

Note: During the subprime mortgage crisis of 2007-2008, the Fed reduced the discount rate to 25 basis points above the target Fed funds rate to improve liquidity in the banking system. This is expected to be a temporary measure.
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http://wfhummel.cnchost.com/governmentspending.html

According to conventional wisdom, the Federal government spends taxpayers' money. In reality it creates all the money it spends, and recaptures it with taxes and the sale of bonds. If it failed to do so, the Trreasury's general fund would be depleted. In the long run it must spend at least as much as it recaptures. Otherwise it would drain the monetary base backing credit money, which is the main part of money supply on which the economy runs. In order to influence the amount of credit money that banks issue, the government must control the cost to banks of acquiring base money.

Managing the Base Money Supply

The Treasury pays the government’s bills out of its account at the Fed. Those payments inject new reserves of base money into the banking system. Since the increase in reserves would interfere with the Fed’s ability to implement monetary policy, the Treasury compensates as follows:

(1) As the Treasury spends, it replenishes its Fed account with equal transfers from its commercial bank accounts where it deposits its receipts from taxes and bond sales. This removes the reserves of base money created by its spending. Aggregate reserves of the banking system therefore remain unchanged on average, thereby allowing the Fed to make small adjustments in reserves as needed to maintain control of the Fed funds rate.

(2) The Treasury replenishes its commercial bank accounts with the receipts from taxes, and from the sale of bonds when there is a shortfall in tax revenues. If tax revenues exceed its spending, it removes the surplus by net redeeming its securities. In this way it minimizes disturbances to the aggregate bank deposits of the private sector.
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mrbrklyn · Sep 9, 2012

If it failed to do so, the Trreasury's general fund would be depleted
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It would then print more money...

chip · Sep 9, 2012

If you cannot dazzle em with brilliance...

mrbrklyn · Sep 9, 2012

chip said: ↑

If you cannot dazzle em with brilliance...
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you can give them jobs in sanitation.

mrbrklyn · Sep 9, 2012

Not to insult people in sanitation, especially those in private carting with connections to the Giambi family.

areich · Sep 9, 2012

Well that is a real thread killer.

VDBforDave · Sep 9, 2012

I'm very confused at this point.

Phil Ham · Sep 12, 2012

Eps said: ↑

No it doesn't! More like 35 cents
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Exactly my point. I was being sarcastic; a northeast thing.

cciesielski01 · Sep 12, 2012

They should make it a 2 cent piece...

mrbrklyn · Sep 12, 2012

cut my clutter in half?

JohnT · Sep 13, 2012

Ha, I tied up the voting! I personally think we should be on a barter system... speaking of which, I have 3 yoke of oxen and I'm in need of 4 acres of land. Any takers?

Seriously, in summary, my personal opinion is:
Shield cent = ugly
Memorial cent = money!
pennies in general = obsolete

I'm not that passionate about the topic and if you give me five bucks, I'll change my vote.

COINnoisseur · Sep 13, 2012

We understand that the government isn't selling pennies to anyone, they are providing them as a service to facilitate commerce, but it's silly to create something at a cost of 2 cents that is only worth 1 cent. The penny is no longer a useful denomination of currency. It requires time, money and resources to produce something that provides no benefit to people. The penny doesn't make commerce faster or easier. It does the exact opposite.

Eps · Sep 13, 2012

COINnoisseur said: ↑

We understand that the government isn't selling pennies to anyone, they are providing them as a service to facilitate commerce, but it's silly to create something at a cost of 2 cents that is only worth 1 cent. The penny is no longer a useful denomination of currency. It requires time, money and resources to produce something that provides no benefit to people. The penny doesn't make commerce faster or easier. It does the exact opposite.
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Screw that, what about 7 percent tax on a dollar

areich · Sep 14, 2012

COINnoisseur said: ↑

We understand that the government isn't selling pennies to anyone, they are providing them as a service to facilitate commerce, but it's silly to create something at a cost of 2 cents that is only worth 1 cent. The penny is no longer a useful denomination of currency. It requires time, money and resources to produce something that provides no benefit to people. The penny doesn't make commerce faster or easier. It does the exact opposite.
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The economic value of something is based on time. If a cent costs 1 cent and lasts a year, it is not as economical as a cent that costs 5 cents and lasts 30 years. Once you understand that, you understand that cents are very economical. After all, what can you buy for a penny.

mrbrklyn · Sep 16, 2012

after all, what can you buy for a penny
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rofl!!

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2012 Cent Error

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Eps Coin hoarder/ lover

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2012 Cent Error

Mint or Not

Yes - it was an error

No - it was not an error

What was the question again?

Eps Coin hoarder/ lover

Guest User Guest

rodeoclown Dodging Bulls

Eps Coin hoarder/ lover

mrbrklyn New Member

mrbrklyn New Member

chip Novice collector

mrbrklyn New Member

mrbrklyn New Member

areich America*s Darling

VDBforDave Lincoln Error Collector

Phil Ham Hamster

cciesielski01 Laced Up

mrbrklyn New Member

JohnT Newbismatist

COINnoisseur Professional Amateur

Eps Coin hoarder/ lover

areich America*s Darling

mrbrklyn New Member

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