Interesting story on possible new US coins/currency.

I just want to say one word to you. Just one word. Are you listening?

High strength concrete or porcelain.

 

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Or ceramic.

 

This. Instead of worrying about such frivolous things the feds could save far more money not commissioning all these worthless studies.

Either get rid of the cent or don't, it doesn't really bother me either way but stop making a career for people to "study" the issue. Who ever is studying it should be fired, they obviously aren't very good at their job. One call to the Mint for their per penny production cost and material cost then plug in different materials with their labor cost and you have your answer in hours that it can't be done not years.

Its essentially taken that commission 6 years to do what a private company would have had done in a few weeks max as far as the whole cent debate goes.

 

Again, this study would have been relevant when the metal prices were high. So far no one has done a cost analysis of where the truth lies in this study. Unless the mint has signed a contract when the metal prices were significantly higher, I do not see the truth in it.

Anyone here can do a cost analysis study if interested. Otherwise I can come up with one over the weekend.

 

Remote programmable option to change currency specs. Software like that would allow me to make a sequel to Ocean's 11, 12 and 13.

"Brett's 1"

An exploitable security hole like that would be insurmountable.

Part of the security protocol for machines like that is the fact that they are hard-coded.

It would certainly bring the value of common junk foreign coins up!

 

Sweden and Denmark are already well on the way to cashless societies. Whether the rest of the world follows them remains an open question.

I always thought that if the US can't part with the cent then at least make it aluminum, but then I hear stories about piles of mostly useless 1 Yen aluminum coins piling up in Japan... so maybe not... just eliminate it... Canada has done fine without the cent... I was there in 2015 and didn't notice a difference in buying, selling, etc. It was a really easy move that probably saved them loads of buckage.

 

Even a few weeks is too long. The initial question goes something like this:

"Labor cost of production is 1.1 cents apiece so what material can we use to make the total cost less than 1 cent apiece?"

Really how long does it take to answer that question? (In the governments case so far six years.)

Actually there IS an answer, you sell advertising space on the back.

 

To be fair, the government has been transitioning away from cash/coins... sort of...

At least with highway and expressway tolls. Pennies were a nightmare for toll workers to haul away, especially when there were variously organized protests in select areas by paying tolls with only pennies during the pre-I-pass (EZ-Pass, etc.) days. Transponder transactions made it easier and cheaper for everyone.

One difference in analogy is that the burden of the coin's haul lies with the US Mint, and not the administering body, the US Treasury. Whereas, the state DOT performs the maintenance, accounting, and hauling. So change may fall on unsympathetic ears. Another difference is the system wide change with more red tape as opposed to the more localized state efforts to deal with the same issue.

 

You could also lower labor costs for 6 years making the committee who has wasted 6 years of tax payer money make them for free for 6 years lol. But I could not agree more, I find the studying of the issue to be a colossal waste of money for a simple production cost question.

 

What do we collect, then? Credit and debit cards?

 

There's a little more to it than that, but not 6 years' worth. For instance, in addition to the raw materials being cheap, it needs to be feasible to manufacture. Striking steel is hard because steel is hard. You'd practically have to make dies out of pure nickel, which presents its own problems.

 

I still say that we should drop, at the very least, the cent to collectors only status. We dont need it for general circulation. Cut the cent and possibly the nickel back to collectors only status and use the dime and quarter in general circulation. I would like it if the cent went back to the old copper composition if it went to collectors only though.

 

There should also be another point made which is unique with US coinage.

Compared to the rest of the major world mints, the largest effective denomination workforce for commerce is the quarter. Yes I know you can say the US mint does issue half and dollar coins but the mintage is absurdly low compared to the rest of the other coins.

If you compare it to Canada, Australia - it's 2 dollars, Euro - 2 euros, Japan - 500 yen, Swiss - 5 franc, UK - 2 pound etc. You get the message, other mints worldwide also do face similar challenges when minting smaller denomination coins and they are often money losing events. The production cost of these coins are offset by minting larger denomination coins. As such, there is a need for US mint to strike an absurd amount of quarters.

Sometimes you might think the quarter program might be taking it too far but if you are a mint director and you are faced with the situation that half dollars and dollar coins are just not too widely accepted by the public - what would you do to offset the production cost? Changing metal composition is not an ideal situation as the vending machine industry will complain about the cost. Coin collectors are upset that collectible coins are getting too expensive. To me, I like to see the quarter program as an positive step for the mint.

 

Quarters are profitable. They would strike those 24/7 and not complain one bit if told to do so. I would agree it is kind of the workhorse for their sweet spot.

The dollars could have had a chance, but that terrible color and metal they picked that made them look like chuck e cheese tokens killed its chances.

I would say not to use Australia as an example though, as beautiful as it is their inflation is miserable in their economy. I've spent significant time there and their super high minimum wage along with shipping costs to get things there just means pretty much everything besides seafood they can farm left and right is super expensive.

 

Imagine how they feel printing $100 notes instead of $1 notes for the exact same cost... !

 

Also true, and their will always be a demand for those if for no other reason they want to eliminate the old ones that other people have figured out how to fake fairly well (like north korea).

 

I'm strictly using looking at the material cost of coin production. Agreed, labor cost in Australia is another matter which will complicate this discussion. The current article mentions that the metal cost alone is driving the costs up which I strongly disagree. If this article was written during the peak metal prices, I would have understood.

At one stage, nickel and copper prices were so high than the material cost of Australian 5, 10 and 20 cents coins nearly exceeded their face value, maybe 10 years ago. The production of these coins were actually offset by the dollar and 2 dollar coins and hence saved the Australian coins from a major overhaul design. I am certain that you can understand my view of why the 2 dollar coins are just too profitable to make especially after handling some from circulation.

Around the same time, New Zealand was forced to make the change as all their coins had to be manufactured overseas - from Australia to South Africa. New Zealand has a mint but it is private owned and does NOT strike local coinage. The smaller denomination coins, 5, 10 and 20 cents were exactly the same specification of the Australian coins. It was not strange to see New Zealand coins circulating in Australia from time to time. As the Kiwi currency value was worth less than the Australian coins, this meant that the melt value of the coins were definitely higher than the face value. No government would continue to allow such coins to circulate only to see them melted down. South Korea 10 won also had a similar problem in 2006.

To sum it up, metal prices do affect decisions on how mints produce coins. Some of the alternatives is to substitute with cheaper metal and or reduce the size of coins, getting rid of the smaller denomination coin, striking higher value coin to offset costs of smaller denomination coins and increase productivity. And of course, rising the price of non essential mint products and NCLT. I'm certain the US mint would have already looked at productivity. Given that the other options are likely 'ain't going to happen' - is it not a surprise that the last option is to continue creating cost benefit analysis reports just to ensure that there are no stones left unturned? In this sceanrio, continuing to write reports just seem to be the easiest and cheapest solution.

 

I think things like this are often overlooked in discussions such as these where we look to other countries for what they have done. We often forget that there can be very different economic forces in play where larger denominations for those countries are much more pocket change than here. Granted a cent here buys nothing, but at the same time using Australia as one example a 50 coin there also buys nothing.

You didn't make the argument but I know a lot of times purchase power comes up, if we really break everything down the cent often times is no worse in terms of purchase power than some of the higher denominations in other countries.

I certainly disagree with that as well. Regardless of country metal prices fluctuate over time. If it was really just metal prices then you would be able to say these years were profitable and these weren't and take an average.

Then there are countries like Australia where any loss the mint took from higher metal prices was more than offset on what they made from them. The exports to China were what saved them in 2008 ect, now that China has slowed they're scrambling to figure out a different economic boom.

I could see the argument potentially that the 20 is to large since it is almost the size of the 50 and I do actually have a pile of change sitting next to me from my last trip there lol. Their 2 dollar coin while thick is actually surprisingly small. I am actually not opposed to having a 1 and 2 dollar coin at all, they certainly last the test of time as I am generally in a harsh environment of North Queensland and coins from the 80s can easily be found in change.

But I would argue often times we are quick to jump on the currency needs to save money train. I've yet to see a government where you couldn't cut substantial costs in other areas before worrying about readjusting everyone to a brand new set of coinage which would equate to minimal savings. In other words were often talking about a savings so insignificant in the large scheme why worry about it until it would actually make a difference.

In the grand scheme of budgets as long as the losses aren't massive the coins are ultimately bringing in more money then they're losing through the taxes of commerce as well.

The one thing I do think we could make a direct correlation with the Aussies is their bills. They are substantially more durable. However, this is where the discussion gets complicated again like above. There may be a value to USA bills wearing out fast to keep them constantly changing given that we have greater issues with them being counter-fitted than other countries.

I would agree with this, though I do think metal prices have more impact than they should as long as "melt" stays with in reason. Often times in these discussions we forget that if you sell to a refinery who will resell for melt, you wont get melt from them to begin with.

To me it would seem that would be more of a problem for gold and silver. These multi metal coins like the USA has today would need a substantial margin to be worth even considering. Even with a pure metal coin if your dime would be worth 11 cents I just don't see that becoming an issue unless banks got involved in melting at a large scale.

 

Smartphones. But there are lots of collectors who are not interested in modern coinage anyway. They could simply continue collecting ancient to, say, late 19c/early 20c pieces.

Christian

 

Chris Pilliod gave a talk at the Fun show about this topic. His company made a new steel that the mint was testing for the cent and the nickel. There is a long list of stuff that has to be tested. By current law the material must be metallic.
The mint has a special room to do the striking test. They use Martha Washington dies for the test and keep track of every coin that is struck. The process takes months of work.
Vending is a really big issue. There are many machines that can't be changed over because of the cost. They would need to be replaced. Tough choices.