Dick Johnson submitted these thoughts on the U.S Mint's proposed coin reserve stockpile. -Editor The bureaucrats in the U.S. Treasury have noticed a substantial drop in coin orders from the Federal Reserve Banks. Commerce has dropped off lately. People are spending less money -- at least in the low value transactions that require making change.
The Federal Reserve reports they have sufficient coin on hand to meet anticipated demand. That's bad for the U.S. Mints. With coin orders dried up from the Fed, they have nothing to strike for circulation. We know they are overactive in striking coins for collectors, if you include presidential dollars, spouse coins and the next ersatz series of collector interest -- the National Parks Series.
However, the economy is forcing citizens to search out all the odd coins around the house and turn them in. Coinstar (the coin counting vending machine company) has processed 42.3% more coins this year over last. With all those coins flowing back to the Fed banks, they have, in effect, become our nation's strategic coin reserve stockpile. And they have the vaults to store them.
What the Treasury wants to do is strike coins in anticipation of some disaster, to keep the Mints busy and their workers employed. Trouble is they would have to find a secure place to store all those coins. How many empty vaults would they need?
Project that scenario into the future, at least for the lower denomination coins, which now cost nearly face value to manufacture. The costs of metal will undoubtedly rise in the future. By some future time when the coins might be issued they couldn't be! These coins would be immediately melted for their metal content, worth more than face value, if they did.
I can see the need of America stockpiling strategic materials, from gasoline to plutonium. But not coins.
In private industry, the most efficient and profitable manufacturers are those who have achieved "inventory on demand." Their production lines are geared to received the parts the day they are needed to make the goods in process that day. No need for inventory, no need for storage. With computers and on time delivery (from suppliers) this is easy to accomplish. That should be the goal of the U.S. Mints.
Stockpiling coins which will inevitably never be able to be placed in circulation is just a dumb idea.
A newspaper columnist, Glenn Ickler, in Massachusetts who had read of this proposal in Coin World responded in an article this week. It's ell worth reading: Ickler: Time to pinch pennies (http://www.dailynewstribune.com/opinion/
Wayne Homren, Editor
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