Interesting article about Dollar Coins- The $1 billion that no one in the United States wants

Discussion in 'General Discussion | Miles/Points' started by MLW20, Jun 29, 2011.  |  Print Topic

  1. MLW20
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    MLW20 Gold Member

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    Link:http://news.yahoo.com/blogs/lookout/1-billion-no-one-united-states-wants-194115156.html

    The $1 billion that no one in the United States wants​

    Budget cuts thanks to the stalled economy have imperiled care for the mentally ill, left a new school building unstaffed, and perhaps most disastrously, limited efforts to keep nukes out of the hands of terrorists. And yet the Federal Reserve Bank of Richmond is sitting on $1 billion in gold dollar coins it says the American public has little interest in using.

    Two reporters from NPR's Planet Money visited the facility where the coins are kept, in Baltimore, Md., and offer up a report about the stash of funds that the American public doesn't care for, Meanwhile, even as the coins gather dust, American taxpayers are paying top dollar (as it were) to store the surplus--and even to increase it.

    The surplus of dollar coins is due in part to 2005 legislation introduced by then-Delaware GOP Rep. Mike Castle. In an effort to get the American public to adopt the coinage, Castle's bill mandated that the U.S. Mint produce coins commemorating every U.S. president (we're currently up to number 18, Ulysses S. Grant). In order to win broader support for the measure, Castle also agreed that 20 percent of the coins minted under the new bill would still feature the coin's previous figurehead, famed Native American figure Sacagawea.

    Continued ...
     
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  2. MLW20
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    MLW20 Gold Member

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    I am sure many members here enjoy the coins, I know that I do! :)
     
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  3. Misterstuf
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    Misterstuf Silver Member

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    The NPR article states that the government has made about $680 million in profit by selling some 1.4 billion dollar coins to the public since the program began.

    The government spokesperson went on to thank one Mr. Pickles for all his help reaching that number :p
     
  4. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    Exactly how does the government make $680 million in profit by selling $1.4 billion dollar coins for.... $1.4 billion dollars?

    Are they saying that it costs them $720 million to mint $1.4 billion in coins and the profit is what they sell them less the cost (bad math) or are they saying that this is the money they save in having to reprint $1 bills over the lifetime of a $1 coin that replaces it (good math)?
     
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  5. TexasYankee

    TexasYankee Silver Member

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    I am having a meeting with 20 of the Native Americans this morning!
     
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  6. JohnDeere19
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    JohnDeere19 Gold Member

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    +1 for being a fan of the coins
     
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  7. SC Flier
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    Maybe they purchase the metal with their Amex.
     
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  8. wheat27
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    I like to call it government math.
     
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  9. mtlfire

    mtlfire Gold Member

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    Canada introduced the 1$ coin in 1987 with much the same resistance. The key to winning the public over was simply, remove the 1$ bill form circulation in the following 2 years. The 2$ coin was introduced in 1996. Now a routine part of the weight in your pocket. If you want to get the adopted, you have to remove the bills.

    The Royal Canadian Mint ships (or at least used to) the coins in unmarked tractor trailers that we largely left unguarded. In 2000 someone drove into the local rail yard, backed up to a 40 foot trailer and drove off with 1.5 million 2$ coins.
     
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  10. Clocktower
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    Clocktower Silver Member

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    I am a fan of them, not from a miles standpoint, but just because they are neat.. I also like $2 bills though. I always get a kick out of paying for lunch with $2 bills when there's a teenager at the register, it's fun to watch their brains freeze up.

    That being said.. yeah, looks like they're making too many.. but that's true of all US money right now!

    People would probably like them a lot more if they were real gold. :D
     
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  11. canucklehead
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    canucklehead Gold Member

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    I think the mindset in the US about the dollar is convenience and tradition over hard savings. Its odd that even knowing that switching to coins would save $5.5B over 30yrs does not stir people to think about changing their habits for the better. Take a look at the slow change in dollar bills to prevent fraud. While other countries have layers of security (coloring, polymers, holograms, tactile print for visually impaired), the US is still using watermarks for the most part to ward against counterfeiting (+ the hideous color schemes)!
     
  12. upgrade

    upgrade Gold Member

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    My favorite use is to pay the neighbor's 8-y/o daughter who takes in the mail/waters the plants while we're away on vacation. So I'm doing my part to indoctrinate the next generation about the virtues of dollar coins. (The wife says I should make piratical "Arr!" noises whenever I hand over the "doubloons.")
     
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  13. mrredskin
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    mrredskin Gold Member

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    they won't fit in my coin holder in either car of mine. plus hardly any vending machines take those, tho i rarely use them anymore. if i could pay my mortgage with these things, i would. hmmm... maybe i could...
     
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  14. k2o
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    k2o Silver Member

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    This reminds me....I have a few to pick up at UPS today...and then I'll head to my bank tmmrw to pay my mortgage. They don't seem to mind a bit when paying this way.
     
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  15. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    I'm always paying cash (via check) for my rent and never getting any reward points for it. Even with large apartment rental companies, they will charge you a fee if you want to pay your rent via credit card.

    It's a pretty good idea because it's an area where a majority of us still pay cash and also generally happens to be our largest monthly expense. It's also a way to get the coins into circulation for those of you who even have the hint of a moral dilemma. Now if I can only figure out how I can get my nice old landlord to accept nearly 100 lbs in $1 coins. :confused:
     
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  16. rwoman
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    rwoman Gold Member

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    I like the $1 coins and think they are a bit of a novelty. That said, living in the UK and using Pounds...they take up lots of space and are heavy...it is annoying sometimes. Much easier to carry a few $1 bills in my pocket than a few pounds. :)
     
  17. Gargoyle
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    It's legal currency. If they accept paper money, can they legally refuse the coins?
    --------------------------
    One problem with adoption is simply that they coins aren't attractive. We have superb engravers and sculptors in this country, yet our coinage is mediocre. If we created stunning bi-metal coins the appeal would go a long way towards adaption. Another problem is the nostalgic link to the "greenback"- it has long been considered a symbol of the nation, so people don't want to let go of that.
     
  18. SC Flier
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    Just like a gas station can refuse to accept Benjamins.

    Another problem is that they can set off WTMDs.

    What we really need in order to get better looking coins is some competition. :oops:
     
  19. aviators99
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    aviators99 Silver Member

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    Read up on seigniorage.
     
  20. MLW20
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    People don't like the inconvenience of carrying the coins around or the chance of mistaking them for quarters.
     
  21. BurBunny
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    I often try to get $2 bills when traveling in the Caribbean. I've gotten discounts on goods in the islands by paying with $2 bills (they're considered lucky). Also use the $1 coins as tips on ships. Always get a much better reaction from them than a bill.

    I say try as I have to give my bank advance notice so they get some in for me. Same thing when I ask for crisp $1s and $20s.
     
  22. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    Wow, so this is how the government counts it as profit is by adding it to the money supply? By their method, they are better off with paper money then because it is far cheaper to print than mint coins... especially when seignorage doesn't seem to take into consideration the cost to replace currency that can no longer be traded.
     
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  23. Slow_Mustang
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    Slow_Mustang Silver Member

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    Gift to ALL the tax payers = 1.4 billion Airline miles/Hotel points.
    Gift to the tax payers - to Mr. Pickles = 1.0 million Airline miles/Hotel points. ;)
    Gift to the CC companies and to UPS = Millions of dollars
     
  24. aviators99
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    It's not "adding" it to the money supply. It's already been figured into the money supply. So it truly is profit, as long as it is bought, which is where we come in.
     
  25. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    Help me understand how it can be considered profit if it is not adding to the money supply. If it is replacing currency that they're pulling out of the market, it's a pure cost to mint and collect / re-distribute. If they're minting and selling the coins without replacing currency, isn't that adding to the money supply?
     

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