It looks like we have a new $1 note coming out.

Actually...our monetary system was originally designed to be by units of 10. It still is to a certain degree. The quarter dollar works better than 20 cents due to the other coins in circulation. If you look at many of those other countries...they also have a circulating 50 denomination. Without one...you need a 25. Believe it or not, we don't have a 50 (because it's not used).

Originally, our coins consisted of 4 denominations...cent, dime, dollar, and eagle. If you look...to this day, our coins are still using these units (except for the eagle). 10 cents = 1 dime, 10 dimes = 1 dollar and 10 dollars = 1 eagle.

 

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10 milles = 1 cent, even though there was never a mille coin
IMO the US needs a circulating 50c denomination

 

So if the 2013 $1's are in production now does that mean that both the Washington and F.W. locations are done printing all notes for each districts?

As a follow up question can we conclude there won't be any more $1 2009 H*'s printed? How many more serials and plate positions need to be reported on the '09 $1 H* so you can definitely say there's only 1 run of 320k? I've found 3 to date each under 320k.

 

I don't even know where to start....

A quarter is 1/4 of a dollar, not 1/25. Likewise a "20" coin would be 1/5 of a whole, not 1/20. Some of the German states actually used reciprocal denominations way back when (a coin with a big "12" on it was worth 1/12 of some large denomination, rather than 12 of some small denomination) but I don't think anyone's used that system in centuries now.

A quarter, dime, and nickel make 40 cents, not 45.

Yeah, and they have a *massive* counterfeiting problem as a result. They're planning to issue a totally redesigned, more secure 1-pound coin in a couple of years to replace all the existing coins. Doesn't sound too cost-effective to me.... Switching from bills to coins looked like a good deal in the '80s and '90s, when metals were cheap and bills were wearing out quickly. Now that metals are more expensive and bills last longer (especially in countries that use polymer), almost no country has replaced a bill with a coin since 2000. And it wouldn't even surprise me to see some of the countries that switched to high-value coins start switching back to (likely polymer) bills at some point....

 

Remember we're talking about *average* lifespan, not maximum lifespan. You can still find 1984 quarters that are in great shape, but what fraction of the original mintage of 1984 quarters is still usable in circulation?

Also remember that today's coins probably won't last as long as 1984 quarters. The relief has been lowered several times since then, so the things wear out absurdly quickly.

 

There will probably be 2009 $1's in production for some time yet--the BEP has to use up its remaining supplies of 32-subject $1 paper, and so forth. And Washington hasn't even started printing 2013 $1's; we don't know how long it'll be before they do.

The 2009 $1 H..* printing was done on LEPE, and unfortunately the LEPE numbering pattern doesn't allow us to calculate run size from plate positions the way the COPE numbering does. So the best we can do is say that the highest serials seen have been in the 0031xxxx range, so the run sure *looks* like a run of 320,000. If somebody finds a higher serial tomorrow, then we were wrong about that. (At this point, I'd be surprised if run 1 turned out to be longer than 320,000 notes--but I wouldn't be surprised if a run 2 were printed, and who knows how long that one would be....)

 

Still wondering if any Series 2013 $5 are circulating now.

 

I've got one in my wallet, yes. They've been out since last fall in some places; I only started seeing them here a few weeks ago, but I thought I was one of the last to get them....

 

Good information Numbers, but a fundamentally flawed paper. They are either discounting or leaving out large amounts of applicable data. However, in the end, the one fact remains, when you issue a coin that coin never comes back. You make an instant profit. Nearly all dollar bills are returned and have to be replaced. How they can say a steady stream of profits is "more expensive" than a steady stream of expenses boggles the mind.

 

Notice that the Fed paper I linked explicitly makes that assumption--that none of the coins will need to be replaced during the 30-year period under consideration. It *still* finds the coin to be less economical than the bill. In a footnote, it points out that if a longer period were considered, the eventual need to replace the coins would make the coin even *less* economical, compared to the bill.

Your statement that "the coin never comes back" is unrealistic. There are proposals around to cull the SBA dollars from circulation--those would "come back" to the tune of nearly a billion dollars of reverse seigniorage. Similarly when the UK replaces all of its counterfeit-prone 1-pound coins with more advanced 1-pound coins.

Even absent such a large redemption of coinage, coins of all denominations routinely come back to the Fed, just as bills of all denominations do. Due to accounting quirks of the U.S. currency system, bills are taken off the books when they're back in the Fed's vaults, while coins are not. But it'd be silly to call that an advantage of the coin. At this moment, there are about 2 billion unwanted Presidential dollars sitting in Fed vaults, and they're accounted as $2 billion in profit to the Treasury--obviously this is unrealistic. That $2 billion is a transfer from the Fed to the Treasury; since both of these are parts of the U.S. government, that $2 billion cancels itself out.

When the government as a whole is considered, we only need to compute the total cost over time of maintaining an adequate supply of $1 objects in circulation--never mind whether that cost is paid by the Treasury or the Fed. As the Fed working paper shows, the lifespan of the $1 bill is now long enough that, over time, it's cheaper to replace $1 bills repeatedly than to mint and transport heavy, costly $1 coins.

 

Hmmm. I certainly don't want a pocketful of metal dollar coins. Again, I'm behind the curve -- hasn't Canada done away with paper $1 bills, and $2 bills are the smallest currency that circulates? And all $1 "items" are coins?

 

i think Canada has 5c, 10c, 25c, 50c, $1, and $2 coins and $5, $10, $20, $50, $100 and (?)$1000(?) bills
they got rid of their two in the mid 1990's and their one in they late 1980's. im not sure if they still have a $1k bill or not but whenever i ask for Canadian currency at the bank they usually have a couple.
they got rid of their 1c in 2012 and their $500 bill in the 1930's

 

That's what you get when you look at UK coinage only. Canada and the Euro Area have not had such problems. What I find odd about US denominations is not so much the quarter by itself (although I'm glad we use 20 and 50 ct coins instead) but the fact that there is a 0.25 coin -- and a 20.00 bill ...

Christian

 

yeah at one point we also had a $2.50 coin and we have a $2.00 bill

 

IMO, we do not need a circulating 50c denomination. Like the dollar coin, 99% of the population think it useless.

 

The paper is flawed in many ways sir. It talks about how the public does not like coins as much as notes, duh. That is the experience of every country switching, but public opinion changes after a year or two. You talking about SBA or other dollars returning is ONLY because they refuse to abolish the dollar note. Otherwise, those would be used in commerce and eventually wind up in change jars around the country. Their big assumption is dollar coin usage would plummet and everyone would use debit cards instead. I find this hogwash, we would be identical to Canada and their experience, and they had nearly 100% conversion.

The entire analysis of "replacement costs" of paper versus coins is flawed, since the coins, unlike the notes, are NOT a cost but a profit. Therefor the analysis is fundamentally set up for coins to fail on purpose.

I will grant you maybe there is higher costs to businesses or banks to handle dollar coins versus bills, I am not sure. However, to the taxpayers, there is no doubt this would be a cost savings long term. Every other major country on earth has come to the same conclusion, and seen the same results when they switched, but somehow we are different, huh?

It sounds more to me that the cotton lobby got a hold of the writers.

 

Canada's experience was almost 30 years ago, when (1) metals prices were a lot lower than today, so the switch made more sense, and (2) debit cards and other non-physical payment methods were a lot less common than today, so people had less choice.

As you say, in every country that's switched from coins to notes, public opinion has been against the switch. What happens "after a year or two" is irrelevant if people have no choice at that point. If Canada were to start issuing $1 and $2 notes again today, would most people actually prefer to keep carrying the coins? I doubt it.

I addressed this in my previous post. Both coins and notes have replacement costs eventually. Both coins and notes have a "profit" (seigniorage) realized while they stay in circulation. If you think that coins have only profit and notes have only cost, you're not looking at the whole picture. Don't be distracted by which bits of cost/profit are reckoned to the Treasury and which to the Fed; the taxpayers get all the cost/benefit eventually.

More like, *now* is different. Can you find a "major country" that's switched from a coin to a bill in the past decade? A lot of them did it in the '80s and '90s, when metals were cheaper. Nobody does it any more. If we're supposed to follow other countries' example, let's at least follow an example that's current and not one that's thirty years old.

(Besides, who do you think pays the "costs to businesses or banks"? That'd be the same American "taxpayers" who allegedly save so much. Look at the big picture, not just the Treasury's books....)

 

Did you see the recent report on the germs found on our currency?

Only 1 out of 4 were relatively clean.

Most had all the nasty germs you can think of PLUS hundreds of organisms that had not yet been even studied or named by scientists! It hurts now to organize them, and I wash my hands right afterwards now.

The smaller surface area and lack of the coin soaking up the germs, makes me want the coins. But, I will still wash my hands.

 

1. I cannot give you any current examples, since everyone else has already made the change. We were smart and were going to do this correctly in 1979, but then politics got involved and they screwed up the SBA and didn't withdraw the dollar bill. Read the original idea. WE would have been the first major country to do this, now we are the last. So no, no one currently because they have ALREADY DONE IT.

2. I thought we wanted leaders who did what was right, and not lemmings who always obeyed opinion polls. Yes, a year or two after using them the public gets used to them and life moves on. It called leadership, something sorely lacking in this country.

3. How can you say there is "replacement costs" with coins? What percentage come back? The math is this:

Cost=redemption cost+production cost-seignorage

For notes, most come back. Lets assume 90% come back. So every year, they have to redeem 90% of the notes, (redemption costs), plus produce 100%, (production cost), less seignorage, (10%). This ALWAYS leads to a net expense, every single year.

For coins, effectively zero come back. So eevry year, they redeem 0%, plus produce 100%, less seignorage. This ALWAYS leads to profit.

See the difference? Coins ALWAYS make money, bills ALWAYS lose money.

This is what the GAO has reported repeatedly. I have spent decades looking at reports from different agencies, (white house budget office, GAO, CBO, etc). Of all of them, I trust the GAO since it has consistently been closer to the mark. THis is because of all other budgeting agencies, it has the least amount of political spin to its numbers.

Maybe from a bankers point of view they prefer bills, but I simply do not care if bills might lower the profits of member banks to the fed. I would rather have the profit go directly to the US taxpayers.