What if the Mint stopped production for a year?

Hi,

I was reading an article from last month in the New Yorker about the cent, and it listed these statistics:

That made me wonder: What would really happen in the economy if the Mint hypothetically stopped producing coins for a year? Would there actually be some kind of shortage of coins? Would commerce be affected at all? How long would it be until commerce saw the effects of the non-renewal of the coin supply, or the steady "leaking" mentioned in the article? What's the real-world need for the production of so many coins each year?

 

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My guess is the initial hype would make current coin prices go up significantly. The reality is there are people out there who just seem to hoard change. Many times it's not until they pass away does that change eventually get put back into circulation. As soon as that happens collectors find those coins next time they enter their hands.

As for a coin shortage - i doubt it...there is plenty out there...we all just need to look under our couch cushions, under our car seats, and in those change jars!

 

Also, think of how much modern coinage Metal Detectors find at the beach! TONS!

 

That's what I was thinking as well. Modern, normal coinage for circulation would still be abundant for most, if not all, industries. Perhaps only the vending industry would have a little trouble since they regularly use new bank rolls as sources for return change...

I'm sure there might be some kind of short hype that would increase collectors prices for some coins, but for everyday usage of circulating coinage...I'm not sure there would be a real impact. That's what I was wondering about - How long would it take for there to be any real impact on commerce and where would that impact be felt?

 

These isn't a coin shortage, never was, never will be....

Just me and my collection.

Which I ain't giving up!

 

I would figure if they stopped making the penny after 2009, Coinstar would have a field day as people cashed int heri coins.

 

I agree that there is no coin shortage now but there was in the Civil War which is why we have Civil War Tokens. Also there have been numerous times when the mint skipped years in production of coins. Look at the Walking Liberty Halves. There is no 1922 or many other dates in the late twenties. This was because there were plenty of Halves in circulation and there was no need for more of them. We couldn't do this know because collectors would be outraged if there was no 2009 dime.

 

not giving up my collection.

 

Interesting concept, the thought of a "coin shortage." If only Senator Alan Bible (D-NV) were still alive!

Of the six denominations minted in the USA, only three coins truly circulate to begin with, the 5-cent "nickel" worth more than the face value due to spiraling cost of its component base metals, the dime and the quarter dollar. The quarter dollar emerged as the workhorse of the system after the 1960's. In addition, many of the Statehood quarters have been withdrawn from circulation. It has been estimated and published in Coin World that 100 million people collect Statehood quarters. In short, a minimum of 10% of the total Statehood mintage sits in sets, boards, rolls and so on.

Half dollars "suffer" from the "Kennedy mystique" and have been rarely seen in circulation since the late 1960's and minted only to cater to the collector market. Approximately 5-7 million halves are minted for a population of 300 million people and none for circulation since 2001. Although half dollars were considered the workhorse coin of the coinage system prior to 1970, the total mintage of 1964 Kennedy half dollars is greater in that one year combined than all the halves minted from 1796-1963. In the years 1970 and 1987, halves were not minted for circulation.

The Sacagawea and Presidential dollars also see little circulation, despite the fact there are about 800 million available from the Mint and/or Federal Reserve at any given moment. There is a long, long history of dollar coins not circulating well in the USA. Until the early 1960's the Mint's vaults were FULL of Morgan dollars minted from 1878-1904 and 1921, even after 270 million were melted down in 1918. I am sure there were some Peace dollars in that mix, as well. In addition, we must remember it took 20 years to "use up" 800 million Anthony dollars minted in 1979 (90% of the total mintage) and 1980 (9%) until the 1999 surprise mintage prior to the introduction of the Sacagawea design.

The post-1958 Lincoln Memorial cent is maligned and just pile-up in jars and coffee cans, although I must say, I do use them often in transactions everyday. Wheat cents have disappeared after the last ones were minted 50 years ago. I have several hundred rolls in my collection, every one pulled from circulation.

 

i agree with others.. if the mint stopped producing coins for a year.. i doubt we would run short. Pennys have a ga-zilliong out there in la-la land waiting to be spent ... and quarters - thanks to the State Quarter program - has a ga-zillion of those out there laying in jars and sock drawers. As far as nickles go .. if a roll searcher can still find nickles from the 30's and/or 40's ... crimey - i dont think we would run short of those either...

in fact, if the mint stopped producing for a year - we MIGHT ... and i emphasize might ... see the kennedy half and all the ugly dollar coins start to circulate...

one has to wonder!!

 

I think Doug is exactly right. The mint makes coins based on demand, not some arbitrary number. If you look at mintage figures based on just the past ten years, the demand has in creased more than %1000, even for the coin some regard as obsolete, the cent. The Federal Reserve orders them based on numbers projected for the coming year. They don't order for coins they still have in storage, which means, for those thinking there are trillions of cents sitting in a huge underground vault somewhere gathering dust, that is not the case. When that becomes the case, then I'd figure it's time to discontinue that particular coinage, or hold off on minting more until they are used up. But, as we all know because of the dollar coins, huge reserves don't seem to sink into supply and demand logic with the government.
Guy~

 

More incentive for them to not charge people to cash in/take out coins then!!

 

Regionally. When I lived in Louisville, and suburban DC, I saw newly minted coins of all denominations (and both mints) very quickly. Here in Pittsburgh, I've seen a grand total of 1 2008 dated coin (a cent). And I don't see many 2007s either.

 

I think it's quarters that would cause the loudest screaming first. Many businesses would quickly adjust to the shortage of pennies, but the lack of quarters would be too difficult to work around. Vending machines, tollway authorities, etc... would probably put their highly paid lobbiests to work extremely fast.

 

Interesting how they phrase it :

"During the past thirty years, the U.S. Mint has produced something like a half trillion coins, most of them cents, yet the Mint estimates that only about three hundred billion coins are currently in circulation."
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They know people don't relate to numbers that big. But when you think about it, half a trillion is five hundred billion...

... so, with three hundred billion coins in circulation, that means 60% of the coins minted in the last 30 years are still in circulation.

Which actually seems fairly high. After all, 60% is considered a landslide. And yet, the New Yorker piece points toward a large loss.

In my mind, the media verbiage was phrased in a misleading manner in an attempt to lead one to their intended conclusion.

Yes, the change is worth billions. Two hundred billion cents are worth $2 billion, and the actual value is somewhat higher.

But how does a loss of $2 billion over 30 years compare to waste in other areas ? Miniscule.

 

The other point is that if there really are 300 hundred billion coins still in circulation and the US population is at 300 million (I'm rounding to make the math simple).

Then

You do the math, but that means 1,000 coins for every single man, woman and child in America.

Hmmmmm. 1,000 coins is only 20 rolls of Lincolns or roosys or 25 rolls of nickels or halves.

Now, in those terms, that's not sounding like so much. I must have several thousand coins, all by myself.....

Guilty..... ???? Nah.

 

Interesting discussion. I would think, however, in the case of cents, that the untold billions of them made lately would be enough for years. (Just my opinion, and I am no economist.) In any case, wouldn't it be interesting to see what comes out of the woodwork when people cash in their cans and jars full of pennies........

 

I remember back in the 70's, I think, there was a "penny shortage". My bank offered 1.05 for a 100 pennies. The news atrributed it to alot of people, not just collectors, simply putting their change in a drawer. It was short lived, people cashed in thier change once the news was out.

 

Coinstar should do that one day. Offer like a 5 cent bonus per $1.50. Or something like that.