I saw Congress was proposing a face value cap on coins at $200. Anybody know how they assign face values to coins? Figure there’s a reason. Seems specifically arbitrary that $200. Why is it that you take 8 cents worth of copper, and tell everyone it’s $1 coin. But on a palladium with market value $3k you tell everyone it’s only worth $25. I guess one is a fiat currency, and the other is a fantasy. They’re both monetized the same leaving the mint I assume. Weird.
They do it however they want. The problem is the bigger the denomination of circulating coinage the easier it is to corrupt the money supply. Coins are far easier to make a passable example that gets into commerce than bills are PM coins are collector coins, the whole point is for the face value to be much lower than the metal and collector value
The puts a value on its bullion coins to help future buyers and sellers with the sales tax. In many states, it it's a coin or if you pay more than a certain amount, it's exempt from the tax. If it's a gold or silver round, with no face value, it gets taxed or you have to buy more of it to get an exemption. Another factor is that collector prefer coins (pieces with a marked face value) to bullion rounds or tokens. It might not be logical, but that's the way many collectors think. In the old days, the gold or silver content had a lot to do with the assigned value of a coin. They couldn't value it at less than its melt value because then it would not circulate. The melt value had to be a little under the face value. Today, with everything in circulation made of base metal, it really don't matter. I'm not sure why the limit is set at $200. The highest denomination coin the U.S. has ever issued was $50, and that was for the 1916 Panama Pacific commemorative gold pieces.
One reason for the $200 limit may be related to efforts by several countries to lower the highest denomination of currency with the mistaken notion it would make illegal drug trafficking more difficult. Of course, the idea is even more ridiculous with currently produced U.S. coins. Any currently produced coin with a face value of more than $1 is a precious metal coin with a melt value far greater than face value. If these coins are used in the drug trade, they would be valued at melt, not face. However, there may be fear that higher face-value base-metal coins might be produced and used in the drug trade … hence, the $200 limit. Cal
There's no mistake about it, a lower limit for the highest denomination does make trafficking and money laundering much more difficult. It's much easier to have/hide/transport 5 1000 dollar bills then it is to have 50 100s.
Good point. I have had very little to do with the platinum coins, so that was, at most in the back of my mind.
Face value is designated by the coinage act of 1873... or the earlier one?. It's legislated though. The cap is set at $100 currently but according to the act this relates up to gold coinage. About the $200 cap you heard of. The government's been kicking around the idea of making a platinum coin with the fed and denominating it $1 trillion since the act doesn't set a rule on platinum, to get around having to secure a bond for borrowing. If they need money stamp out a $1 trillion dollar platinum coin and call it a day. Of course there's concerns over doing this, as expected, now enters this $200 cap which I think they would apply to platinum to lock that down to $200 per coin and make it hard for the governement to just bang out a single $1 trillion dollar coin weighing 1 or 2 oz. Or whatever .... they'd have to make 5 billion of them to secure the $1 trillion. As a side effect they could also technically re-value platinum from $200 down to $100, gold from $100 , however they want to and adjust the silver eagle as the see fit. None of this is gonna happen though. They will stick to the way it's always been, securing a bond to borrow. Someone just kicking around an idea, and not gaining traction except in the opposite direction to limit it's ability. Some congress person found a loophole in the law that could be exploited (platinum valuation for coins not being specifically mentioned) and saying "why not just stamp out a couple $1 trillion valued platinum coin and print some money?" The fed banks would never go for it unless there's $1 trillion in platinum to back it in each coin or multiples of coins. Platinum denominated at $100, the current max for this reason but as the act is written it technically doesnt have to be because the act applies to gold as the top metal for u.s. coinage. Anyways I'm pretty sure that's what this is about. No the mint or government can't just do whatever they want. They are locked down to $100 except for platinum and paladium and some genius had a bright idea back in 2011 to make a 1Trillion platinum coin and start borrowing from themselves instead of bonds.... hahahaa. Since then there's been talk of raising the cap to $200 as the max coin denomination.
The ABC act that talks of it was nothing more than a proposal from someone with no power that had 0 percent chance of passing. The bill proposal already died last year after going nowhere. In other words no the government hasn't actually been kicking around the idea. Individual congress members can propose whatever they want, it doesn't mean it's even being thought of twice The last time the idea was even remotely kicked around was over a decade ago and it was rejected by both the Treasury and the Fed.
Incorrect. The government absolutely can pass whatever they want for denominations and change any laws that prevent that if they have the votes. They set the rules for what gets made and what is and isn't legal tender. It doesn't mean there will be radical changes or even any change, but it is incorrect to say they couldn't do so if they wanted. They're the ones the pass the rules that set the limits and they can change those whenever they want
I didn't mean they can't do it at all, of course they could with an act of congress. that hasn't happened, and nothing drastic has changed in a long time. until they change the law of modify the act, they are however limited by the constrains of the act. https://www.coinworld.com/news/us-c...s-seek-200-dollar-limit-first-responder-coins United States Code Title 31, Sect. 5112 is where they stick all this coin garbage. https://www.law.cornell.edu/uscode/text/31/5112 as far as platinum goes, it just reads " (k) "The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time." As far as platinum, it's left up to the secretary of the treasury. My guess is Mike Lee (Utah) is looking to tighten up the amount of freedom with platinum that the Secretary of Treasury has. it's a new introduction earlier this month,, Cancel the Coin Act, S. 185. all others are limited on denomination, not so with platinum. I'm not saying anyone has done it, or has the votes to do it, I am saying the loop hole is there to do it. and there's been "what about if we's" to use it that never came to fruition, and now an effort to tighten it up just in case someone ever did use it.
Gosh...for 60-plus years I always thought "face value" was whatever was indicated on the coin..."five cents"..."one dollar"...etc. I'm reading/learning...
