Money

Americans Want Change. Private Mints Are the Solution.

Congress should stop preventing the private sector from making its own coins.

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Two years after a lack of spending brought on by the COVID-19 pandemic caused a coin shortage, American retailers still find themselves short on change.

In March, industry representatives called on Treasury Secretary Janet Yellen for help as the shortage lingers, but they're unlikely to find relief. The federal government has been steadfast in its commitment to present only short-term solutions, like rationing coins or pushing social media campaigns. If the government actually wanted to solve the problem, it would allow the private sector to produce its own coins.  

In 2020, the combination of government-mandated lockdowns, consumer health concerns, and a shutdown of the U.S. Mint brought the circulation of coins to all but a grinding halt. Though the economy at large is much better than it was in summer 2020, the circulation of coins has struggled to recover.

While some businesses have chosen to break away from cash transactions altogether in response to the shortage, others don't have that luxury. Brian Wallace, chief executive of the Coin Laundry Association said, "[If] we can't make change, we can't make money." That reality became clear when some business owners began driving for hours to find available coins.

Consumers have been hit hard too. For the 7.1 million unbanked and 24.2 million underbanked households in America, cash is one of the most important resources they have for making purchases. The coin shortage has locked many of them out of the economy or caused them to incur new costs on top of current inflation.  

The Federal Reserve's main response has been to ration coins "based on historical order volume by coin denomination and depository institution endpoint, and current U.S. Mint production levels." The U.S. Mint, through advertisements and social media campaigns, also asked the public to "pay with exact change and return any spare change to circulation by depositing coins, exchanging them for bills at a financial institution or taking them to a coin redemption kiosk." And a "U.S. Coin Task Force" was convened to monitor the ongoing shortage. At best, these are merely short term solutions. 

The task force's latest report notes that its members "have worked tirelessly to address the coin circulation disruption, issue recommendations for the broader coin supply, and influence actions within their organizations." And while they argue their report "reflects the commitment, enthusiasm, and creativity" the members used in crafting their suggestions, there was a notable solution missing from the task force's recommendations: welcoming private currency.

It wouldn't be the first time the private sector stepped up to provide alternative forms of currency when supplies of official money have run out. So why haven't private businesses done so during this shortage? There are many possible reasons why a "Pat Penny" or a "Dex Dime" hasn't taken off, but it's most likely because the U.S. government doesn't like to see currencies competing with its monopoly on money—even if the government itself is failing to meet the needs of Americans.

The government has made it illegal to make metal coins that are intended to be used as money. This prohibition is different from counterfeiting—the law specifically bars the creation of coins "of original design." The Department of Justice and U.S. Mint used this section of the law most infamously in 2006 against the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code (NORFED). It declared the use of the NORFED Liberty Dollar as money to be a federal crime. After such a prosecution, it should be no surprise that the private sector has been hesitant to provide an alternative currency like it has in the past.

Congress should strike down that restrictive language and welcome coins of original design. Instead of chasing shortages with short-term solutions, welcoming the private sector to supply its own coins—as history has shown it will—could be just what's needed to help solve the current coin shortage and stop future shortages from taking hold of the economy.

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  1. It was acceptable to round to the nearest cent back when people were making 30 cents/hour.

    The equivalent today would be rounding to the nearest quarter.

    1. And all retail establishments should do that (round to the nearest 25 cents, taxes included), like movie theaters do, to speed up transaction times.

      Pennies and nickels and dimes are basically a nuisance now.

      1. That's what the guy at the convenience store thinks too. I have to ask for the penny when I buy a $X.99 item. I typically point out that when I collect a hundred of them, it's worth a buck. Sometimes a laugh, sometimes a groan, but I still have to keep asking every time.

    2. The half penny was discontinued in 1857. Today it would be wort 17 cents. Anything under a quarter is a wast of time.
      Also it is perfectly logical (from gov standpoint) to produce pennies and nickels that cost more then 1 and 5 cents to manufacture.
      The gov is the only company that can loose money by literally making money

  2. I haven't significantly dealt with coin change for years. Bottle returns less than a dollar end up dumped in the nearest donation bin.

  3. Apropos of nothing, whatever happened to Ken Schultz? Haven’t seen his name lately.

    1. I can pretend to be Ken.

      "Go Republicans! Rah rah rah!"

      There. I just summed up every one of his posts.

      1. Summed up your posts pretty well too.

      2. No no, your comment is about 2,000 words too short to be an adequate representation of Ken.

        1. I suppose I could repeat it four hundred times.

      3. You missed linking to a lot of articles as evidence that on further review are often not actually saying what he says they said.

        1. Unlike certain people here, I don't have a library of links and quotes from other people to throw out as evidence they're poo-poo heads which makes everything they say wrong. It's just not that important to me.

  4. I'm hoarding coins just to be a dick.

    1. What a surprise.

      1. Retard believes everything he reads. More at 11.

        1. Retard reads posts that are “muted”.

  5. England forbade colonists from using English currency, so they ended up using French, Spanish, German, and whatever currencies they could get their hands on, plus tobacco and other crops, and Indian wampum. If they could manage all that without calculators and with a one month communication lag north to south, I think we could manage even simpler variations just fine.

    1. Spittin tobaccy is worth more than it used to be, it would be a good alternative to coins.

  6. Interesting idea. I guess it could work in principle, but there would have to be some sort of ground rules. For example, there would have to be some type of specification for what the coins could be made from. You don't want pure zinc coins (for example). But sure, let's experiment with the idea and see how it works out.

    1. But first, we need strict rules and regulations!

  7. The problem with that idea is that the monopoly on legal currency allows the government to steadily rob us by using inflation to devalue the dollar. This punishes savers while putting people into higher tax brackets without increasing their spending power.

    So of course the government is going to keep alternate currencies a crime. If such currencies were allowed then the government could lose the power to rob us with inflation.

    1. "the government could lose the power to rob us with inflation"
      ^THIS... Well said... +10000000

    2. I think crypto coins are here to stay.

  8. They want you to move to using thier new central bank block chain currency once they get it approved. They have no interest in fixing problems with using cash.

  9. I know people who are investing in reloading equipment because they're convinced that bullets will be the currency of the future.

    1. That's a little sad.

    2. Humorously; That's exactly where this Nazi-Riddled nation is heading. Gov-Gun Bullets was suppose to be protecting the USD from "counterfeiting"... What are the people suppose to do when those Gov-Gun Bullets backs the BY FAR BIGGEST counterfeiting operation ever seen?

      Answer; Get your own Bullets and Gun to protect yourself from armed criminals the Government has become.

      Wildly sad really... Politicians have thrown about their sworn oath of office and are now ?working? for whichever [WE] mob will garnish them re-election.. (i.e. sell-out to the biggest criminal gang).

  10. Maybe, but the complexities are way more than you'd think. I worked in Las Vegas, in the casinos, with private mints (each casino had it's own checks or 'chips'). We at the tables, we'd try to honor the chips from other casinos, but it wasn't easy, We had a three ring binder full of the all the markings for all the casinos, and different version of the same denomination over time (people would bring back checks from older vacations). There was even a service that would do check exchanges via armored cars so the Flamingo for example could exchange the Bally's checks it had at bally's for the Flamingo checks it had.

    And this was in a small essentially homogeneous economy. Now we will have SF China town money and NYC Little Italy money, backed with the full faith and resources of ... hmm ... lets not look too deep into that.

    You want a Tower of Babel economy, this is one sure fire way. It may be better than the hyper inflation the US Fed seems hell bent on, but it isn't a utopia. It is less worse alternative future.

    1. Silver or Gold as the U.S. Constitution specifies.

  11. The article is a little confusing on the proposal and the supposed justification.

    1. If the author is proposing legalizing complete private currency systems, trading for other currencies at whatever the market will bear, that's great at least from a libertarian POV. But it doesn't have much to do with the stated problem, lack of small change to get small remainders correct in transactions denominated in US dollars. Doing currency conversion is only worth the hassle for significant amounts. I'd rather not get my small change at all than get a pocket full of assorted tokens.

    2. If the proposal is to allow private mints to create legal tender coins denominated in US dollars, at their own discretion, there would need to be all kinds of rules. E.g. you can't "mint" 40 million cardboard "quarters" on your laser printer and then have a legal right to force your bank to exchange them for $100 federal reserve notes.

    3. If the proposal is merely to allow the US mint to contract with private mints to make coins, well, no problem but also not very exciting.

  12. The really dumb thing is that if you take a large number of coins into a bank, they will charge you to count them. So I have a large coin box that just accumulated over a decade or so, but I have no financial incentive to actively turn it over to a bank. So it just sits there.

    Frankly, if we were really that short on coins, someone should be offering to *pay a premium for them*. I've seen no such advertisements.

    1. Just take ziploc baggie-sized amounts of coins to the bank at a time.

      1. Why should I make all that effort? I don't need the money those coins represent right now. If they want me to make the effort, i need a positive incentive.

        1. Inflation eats away at the value of saved money. So that box of coins is worth less and less the longer you hold onto them. That should be an incentive right there.

          1. But if I then put them into a savings account making 0.01%, inflation eats at it just as much as if it's in coins. If you're not going to spend it it's all the same.

    2. The really dumb thing is that if you take a large number of coins into a bank, they will charge you to count them.

      Really? The credit union I use has a coin counting machine that charges like 7% or something, but they waive the fee if you're a member.

    3. There was a time when banks in Hawaii paid a premium for pennies because the cost of transport from the mainland (can I still say "main"?) was so high.
      (Of course, that was forty years ago in a time of "unusual" inflation, nothing like today.)

    4. I would not be surprised if that was illegal for some reason.

      1. I've seen a few stores (not often, maybe 10-15 years ago) offering to buy rolls of pennies at a premium.

        1. Last summer when they were complaining about a dearth of coins, one store around here was buying rolled coins at a premium. Give them $100 in rolled coins and they gave you a $150 gift card. Unfortunately they aren't doing that anymore. Heck, they don't even take any rolled coins anymore.

          1. Then I stand corrected. Luckily, I hedged my bet hard by saying "I would not be surprised." Still, my paranoia led me wrong.

  13. In 2020, the combination of government-mandated lockdowns, consumer health concerns, and a shutdown of the U.S. Mint brought the circulation of coins to all but a grinding halt. Though the economy at large is much better than it was in summer 2020, the circulation of coins has struggled to recover.

    Penny *and* Pound foolish!

  14. In unrelated news, the US government surveils its citizens by monitoring electronic financial transactions.

    1. thats teh point isn't it the government claims a shortage that they could have fixed but really doesn't want to because they do want to get rid of it. make it inconvinent to use and people will stop using it they will think it was their choice

      1. ^BINGO................ ^THIS....

    2. Which is why the max denomination is 100 bucks (which is worth about what a 20 was in the 1970s.) They used to go up to 10,000 dollar notes. Those were in limited circulation, but 500 and 1,000 dollar notes were readily available.

      1. The US Mint should go back to 1,000 dollar notes just to keep up with inflation.

        1. The mints do not issue "notes" they produce coins. There are currently four active coin-producing mints: Philadelphia, Denver, San Francisco, and West Point.

          In the USA, all paper money is printed by the Bureau of Engraving and Printing in two production facilities in Washington, D.C., and Fort Worth, Texas.

  15. for the last couple of weeks we've been turning in 22 years of coins a jar/bottle at a time @Kroger ... so far it's over $200

    1. I put all my pocket change in a can and periodically deposit into a savings account that's just for coins. It adds up.

      1. my grandfather did it for like 60 years & I got the coins when he died in '87. the stuff I rolled and *didn't* keep was +$1000. I still have a bucket of wheat pennies lol

        1. Must have had a lot of silver quarters and dimes.

          1. The Feds don't like people having their own proprietary ("original design") coins, but I've thought that a business might have a list price, but then take pre-1965 silver coins at some daily posted rate. I've heard of people sitting on large piles of old silver as a discrete way of being ready for when the SHtF. Bags of "junk silver" (pre-65 coins) are now running about 20x face value.

        2. That account of mine has around $350 and I've got another $80 in a can that I need to bring to the bank. Going to use it to do something fun with my kid. Haven't decided what yet.

          1. we always called it a vacation fund but coinstar in Kroger only supplies future grocery purchases

  16. I thought the only coin we wanted to see circulating was Bitcoin.

  17. Isn't this a 20th century problem? Everything has moved on to cryptocurrencies now, and anyone can issue one. (And somehow the advantage is that the supply is limited, LOL.)

    1. "Everything has moved on to cryptocurrencies now, and anyone can issue one. (And somehow the advantage is that the supply is limited, LOL.)"

      Precisely so.

  18. A much more sensible solution to "the coin shortage" is to simply end the production of low denomination coins. Australia and Canada stopped using pennies around thirty years ago. By now it's probably time to stop using nickels. Total up the customer's purchases and round the total to the nearest tenth.

    I'm fine with keeping the penny for banking and credit card transactions.

    1. Given that the continuation of penny production is due to pressure from the copper mining lobby, I have to ask, "why are we subsidizing copper production?"

      Industrial demand for copper is so high now that there is a copper shortage. Why is the government diverting so much production at inflated prices to something as useless as coinage?

      1. A real point is that private mints might satisfy a market need for commemorative coins and tokens for casinos and game arcades but expecting them to produce legal tender coins for circulation is nonsense. Contracting out is a different story. The Bank of Canada uses a private bank note printer to produce Canadian bank notes but contracting out is not the same thing as "private." Federal, State or Provincial and local governments contract out the building of roads, schools, courthouses, police stations, office buildings etc but they are still Public (ie government owned) facilities.

        The market has spoken. People want paper money, everything else is "small change"; most people do the same thing with change as I do. They throw it in a jar until they have so much, they wonder what to do with it.

        Americans have soundly rejected dollar denominated (and higher) coins in favor of paper notes in spite of the fact that the lack of durability of paper makes paper dollar bills more expensive than dollar coins. The only thing that will change that behavior is for the Treasury to stop issuing paper one-dollar bills and to mint enough dollar coins to satisfy demand.

      2. You must of forgotten there's only 2.5% Copper on a modern penny the other 97.5% is zinc.

  19. Can't we use those Cayman Island coins they sell on TV?

  20. Can't we just double the amount of coins by reducing the coin diameters by 30 percent?

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