What I would most like to see is the return (from the US Mint) of

No, no, no, I don't want to...the Devil made me do it...So Doug was this one of your high school jobs?

 

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No, no, no, I don't want to laugh, but, LOL.

 

Yes, I agree with this, seigniorage has almost always been there, except for recently with the cost of the cent and nickel. And, yes the mint did sell proofs and mint sets at a MODEST markup over face value. But still, they relied on taxes to meet the additional cost of running the mint.

Today it’s completely different, the markups are rediculous and not only facilitate running the mint with no taxpayer participation, but also provide funds to reduce the national debt. I know they say a lot things just aren’t fair, but it’s not fair to balance the mint and national budgets on the backs of collectors.

 

The closest thing they have to that is with the commemorative coins. The organizations that are supposed to get the surcharges the collector have to pay don't get them until the Mint breaks even. If sales are poor and Mint does not recover its costs for manufacturing, advertising etc, the money comes out of the surcharges. Then the organization gets whatever is left, once they raise matching funds.

Yes at that time they did receive tax money to operate. But that was because at that time ALL of the seigniorage profits were turned over to the Treasury General Fund. And then the Mint would have to get an appropriation from Congress in the budget to operate the next year. Then it changed and the Mint turned over MOST of the seigniorage while keeping enough to self fund its operations. So they turned over a little less and stopped receiving tax funds.

Care to define well above face value? Proof Morgan dollars were $1.08. The % cost was higher on the smaller denominations. Proof Seated halves were $.54, quarters were $.28, dimes were $.12 The minor proof sets were a real rip off, 1,3,and 5 cent piece cost $.12 A gold proof set with a dollar, quarter eagle, three dollar, half eagle , eagle , and double eagle, face value of $41.50 cost $43. In more recent times the mark-up did get higher. The 1936 set with a face value of 91 cents cost $1.89 I guess from that point on I would agree they were sold at well over face value.

When does the "very early years" stop? The cent wasn't a significant moneymaker until 1857. Silver coinage operated at a loss until 1853 with the small profits from the copper coinage making up the difference. Silver coins weren't really costing less than their face value to produce until the 1870's when the price of silver started its long term downward trend. Gold was coined at a loss or at best about break even until 1933 when they stopped coining it. I don't believe the Mint made much profit until after the 1870's and it lasted until the 1950's. Then profits declined due to the rising cost of silver with the cent and five cent being the major source of income. The real profit explosion then started with the clad coins in 1965. Now for the past ten+ years we have been losing money on the cents and five cents and it the profits from the larger coins that kept the mint in the black. Then the mint gat a real shot in the arm from the state quarters and the dollar coins and profits BOOMED. Today quarter production is down, we are still bleeding red from the cents and five cents (2 cents and 8 cents apiece to produce, 2012 mint report. Down from the 2011 report) and with the loss of the dollar coin next years mint report could be very interesting. The 2012 report showed a profit of about 32 million (down from 2011 of about 388 million.) and the only reason for that profit was because the 2012 report included 79 million in profits for the dollar coins struck in the last quarter of calendar year 2011. Without that the mint would have been in the red. (These figures do not include the profits made on numismatic coin sales)

You comment about checking the annual reports to see just how much the did make sounds interesting. It would be interesting to see just how much they did make each year through 1922 (That's as far as my collection of old mint reports goes. I also have all the reports since 2000.)

 

Okay... Let's start by deciding on a working definition for the word monopoly.

A monopoly is not a business that produces a good that no other business produces. If it were, Apple would have a monopoly on the iPhone and Samsung would have a monopoly on the Galaxy. A monopoly is an entity that controls the supply of a commodity good. In the case of the US Mint, a monopoly would exist if we had a nationalized mining company that was the sole provider of metals to be used in US coins.

That said, there is a monopsony of sorts in work. After all, the US government (through the Federal Reserve) is the primary purchaser of US Mint coins and BEP notes. The Fed only purchases from these two entities. There is nothing in US law preventing the establishment of a monopsony.

There is no anti-trust issue, as the US government does not prevent the minting of metal content based rounds. It merely prevents the passing off of said rounds as US backed currency or legal tender. The definition of legal tender is controlled by Congress. It's not controlled by the US Mint nor the BEP. Those two entities are merely allowed leverage on the design of their products. The products are required to meet certain manufacturing designations (content & denomination), just as any contracted good would be required to meet specifications.

Also, the US Mint doesn't even hold a monopoly on the goods it produces. This is due to the establishment of the dealer network that the US Mint sells the coins to. Those dealers, for the most part, then determine pricing for the secondary market. You are never forced to buy coins directly from the US Mint. You can always purchase them from eBay, Amazon, Cointalk or any number of entities.

This is almost as bad as my friend who complained that Servco has a monopoly on Toyotas in Hawaii. I told her that Servco has nothing remotely resembling a monopoly. You can always buy a Honda, a Nissan, a Ford, a GM, a Lotus, a BMW, a Volvo, a Cooper, a Daimler or any other number of vehicles on the market.

 

In essence, the definition of monopoly being used would undermine the entire concept of a patent law system.

After all, if I own a patent, I control a monopoly. Any patented ideas would be immediately revoked under anti-trust laws and mitigated to public domain. Again, monopolies have to do with commodity control, not end product distribution.

Bell (AT&T) held a monopoly and was forced to break-up since, in essence, it had such large scale that its existence as a single entity prevented any other potential phone utility providers from entering the marketplace. They had developed a national phone company that wasn't a government agency. This led to non-competitive pricing. After all, a true monopoly prevents entry into a marketplace. This barrier to entry allows the provider to set the price under the assumption of zero competition and known demand. As such, supply will never exceed demand, for the supplier would not need to drive any competition from the market.