2 of my Banks have notified me of another Coin shortage.

With copper still above $4 a pound, beats me how the cent and nickel survive in circulation. Sure, there is a ban on melting them down. But at some point the cost above face-value to produce the coins will be greater than all the seigniorage from the other denominations combined. At that point, something will have to be done, and the psychological hit to the dollar will be far greater than many expect. Once lower denominations start getting whacked like in India, the charade that inflation isn't a problem pretty much losses all credibility.

 

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I think the shortage is just starting to take hold again here in Ohio. Koger is not disbursing any change currently and is instead putting it on your customer rewards card. Several smaller businesses still had coinage for customers paying cash.

 

With the eminent inflation on the horizon, coins will be rendered useless anyhow. Their real value, even the quarter, is minimal in reality. You might think I'm overreacting, but a significant amount of money existing has only been created in the past few months.

 

Has that not always been the situation, though?

 

Isn't a box of half dollars $500 face value? If you are paying them $1000 I Wouldn't expect any problems either.

True that would happen, but that point is somewhere around $16 -18 a pound I think. Up to that point the seigniorage from the larger denominations will off set the losses Higher the losses are greater. If you want to keep offsetting the losses it can be done for a long time at the cost of an ever decreasing net profit. Or you can cut the losers and have an immediate significant increase in net profit.