I'm trying to peice together the path of coins from the Mint to an average citizen. I'm still missing a link here: a. The Mint mints them b. The coins get sent to the 12 Federal Reserve Banks (FRB's). c. FRB's send them to banks upon request??? d. But banks get them from private contractors, like Brinks??? What's the missing link between c and d? Or do I have more wrong than that? Thanks!
funny was just talknig to wife about 20 mins ago about that while she was home from lunch...my wife is in banking and vp of a bank.....here is how...if the bank needs coins they can directly get coins from feds......they use what they have...and even roll them...but if needed they order....ie state quarter program...the bank's are told they have x-amount for their bank's needs...hope this helps... Neal
This is from the Treasury Fact sheet Federal Reserve banks arrange in advance to received new coin shipments for the coming year. They do this in amounts and on a time schedule to maintain their inventories at the required levels. Under this arrangement, the United States Mint can schedule its production schedule efficiently. Even with advance planning, there are occasions when coin shortages arise. The Federal Reserve banks must follow the advance shipping schedules. Except in an emergency, there are no provisions for obtaining additional coins. Federal Reserve banks receive coins at face value because they are obligations of the United States Government. The Banks store the coins until they need to fill orders from the commercial banks in their district. The Federal Reserve banks fill these orders from their vault stocks of both new and circulated coins. Also, they fill the orders without regard to date or mint mark. Coin shipments leave the Federal Reserve banks by armored car, registered mail, or express. If a commercial bank has excess coins on hand, they may return the coins to the Federal Reserve bank. It then sorts the coins for fitness. They return badly worn or bent coins to the United States Mint, which melts them down and makes them into new coins. Also, the banks remove foreign and counterfeit coins from circulation. According to Federal Reserve sources, over 20 billion coins valued at well over $2 billion pass through their coin processing units each year. The fine points that I'm not certain about is: I think the Fed sends coin to Brinks. Loomas, Well Fargo in the monster bags but not to local banks - it has been years since I saw a bank roll or box with a local hometown banks logo on it and I don't think the fed breaks them down but they may to some degree. If someone knows these finer points please let us know.
You guys have it basically right but the FED branches do very little in handling coins now days. This job is contracted out to the counting houses like Loomis and Brinks. They are required to return errors. While the FED removes bent and damaged coins in theory this isn't true in practice. The banks set their discriminators and counters to a much finer setting than the counting houses so anything that can get through the bank will probably get through the counting houses. This leaves the bent and damaged coins with consumers who must spend them somewhere. I've seen the bent coins seem to be getting a lot of wear in recent years. The FED still orders coin from the mint and manages the flow but coins just don't physically go in or out of the FED branches anymore. Sincwe 1972 the mint and FED have used FIFO accounting which requires that coin stocks be rotated. This has assured that there are't old uncirculated coins sitting in storage as was the case before that. Most of the FED branches have had significant amounts of coins siitiing in storage for emergency purposes for may years. Unfortunately due to the structural changes in the means of supplying coins these are probably "stuck" and haven't turned over in as long as a couple decades. This means possibly as many as about 80,000,000 quarters that haven't worn since 1992~. While there won't be anything like XF 1969's in there there would be many nice coins of many dates. There would also be a couple million uncs dated between about 1987 and 1994. A few will be gemmy. There should be a few entire pallets. Of course it's possible all or most of these have been returned to circulation since this condition existed in 1999. Vault space always has some premium and storing coins for many years doesn't make a lot of sense.
Oy! This is getting complicated. I have two quick questions for you, or anyone else: 1. Can you modify the very first post of this thread to make it correct? 2. If "FIFO", does that mean in might take a year or two for those 2009 nickels and dimes to get into circulation?!?
Just delete b & c and change it to; the coins go to many counting houses at the behest and under the control of the regional FED branches. The 2009 coins might never get into circulation or many of them might already be circulating in small regions where the economy is still strong. When they get released is dependent on how many coins got into storage in front of them. Say there were 2 billion nickels in storage and then the 2009's hit. All those in storage would be paid out before any of these were released. Any that went into storage later would que up and wait their turn after the 2009's. In real life it's a little more complicated because there isn't a single file line but twelve of them; each FED branch will store coins somewhere and they are supposed to rotate them. If 2009 dimes are going for big money there will probably be those with access. Also in real life it would probably be inconvenient to ship all these coins to a central location so they will likely be scattered at least a little and this too might interfere with issuing them in the proper order. I doubt they'd ship coins to Indianapolis from Chicago just because Chicago had coins in storage longer if they already have a stockpile in Indy. The mint stores a lot of coins as well ( I believe on premises) but these are typically new coin. When the stockpiles start going down they'll soon be minting coin again. There are some considerations that could drastically affect future production. Inflation would further raise the cost of the cent and dollar bill. If the dollar coin actually starts circulating there would be a large structural decrease in the demand for quarters since the dollar would replace piles of quarters. This could cause quarter demand to fall to as low as 500 million per year while as many as 15 billion are in storage. Rather than maintain a 30 year supply they might melt large numbers. There might be a very interesting ten years coming for "pocket change".
