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Long Beard's Blog

06 Mar 2022

Rumors and Reality

Coins-United States | Long Beard

Over the years there have been many rumors pertaining to the striking of coinage which turned out to be just that. These rumors have steadily increased over the past twenty nearly pacing the advancement of technologies. Rumors such as an end of the U.S. One Cent and nickel or the elimination of physical coinage to a cashless digital financial world. While these have and will be debated for as many years to come, some with solid merit, the current reality suggest otherwise following historical fact and records. Or so for the foreseeable future. And this is the subject for the week. Enjoy!




Before breaking a few of the myths we must first understand how it is that coinage ends up in our hands. This would be of value and importance to those of you who roll hunt and share those finds on this very blog site as well as the many other forums. The United States Mint begins striking new coinage on the first day of January of each year. each denominations release varying to that effect. Some early in the year, others later. Yes, there were rare years where coinage was struck prior to or afterwards, the 1979 Susan B. Anthony struck in 1978 but held until the date on the coin or the clad coinage dated 1965 and struck as late as early 1967. None the less, the mintage figures being struck are predetermined based on historical records, estimated demand and seasonal trends such as around Christmas. Once striking begins, these are monitored and revised accordingly. Simply put, the mint knows how many cents, nickels, dimes and quarters it will strike. These figures begin and adjust accordingly with the next step in getting a coin into the public's hands.





In the summer of each year, the Comptroller of the Treasury meets with the Federal Reserve, U.S. Mint and Bureau of Engraving and Printing to examine the needs of currency and coin within the financial sector. It is at this time where the Federal reserve places it's orders with the Treasury Department for the following year. The United States Treasury Department is responsible for the stability, integrity and full faith and credit of the United States both at home and around the globe. The Federal Reserve, having much of the same responsibilities only on the banking side, is the countries financial institution, the central bank for the United States. The Reserve has multiple vaults throughout it's network of twelve Reserves located around the U.S. where coinage and currencies are housed. Like the mint, the Federal Reserve looks at it's vault stores and adjusts it's ordering along with these other factors. Once the order has been placed by the Reserve there is no provision for change and obtain more coin or currency save for an emergency situation. What this essentially means is that the U.S. Mint will strike what the Federal Reserve ordered in the summer of last year unless, say, a major metal supply issue arises.




The Federal Reserve begins receiving it's orders sometime after the first of each year, or a continuation from the previous in many cases, to keep money flowing. The Federal reserve not only receives new coin and currency, but that from private financial institutions on a daily basis. All incoming coin arrives in bags based on weight which are then wrapped or sent on to armored car companies where they themselves wrap. In any case, coins are not always sent based on the year in which they were struck as the Reserve sorts and ships returned coin. The Cent and Nickel denominations arrive by armored transport from the mint, all others by semi-trailer. In any event, all currency and coin is stored until needed.





And finally, the public. The bank has a set amount of currency and coin on hand in it's vault for the day to day transactions. Money comes in, money goes out. Just as the Mint and Reserve, the local bank or institution is constantly monitoring and changing it's operations to ensure the smooth flow of money. On regular intervals, often times unscheduled, new orders are placed with the local district of the Federal Reserve. The bank also returns it's excess coinage and currency at this time based on it's needs. All banks have what are called Federal Reserve Accounts, much like a persons checking account. These accounts are monitored by both the bank and Reserve and corrected if it drops below a threshold the order is placed automatically. All of this explains why it's hard to find new Denver Mint coinage on the east coast and vice versus. Although it does occur should one Reserve fall short of fulfilling an order locally and Boston gets it from San Francisco.





Now that we understand how coins move, let's bust myth number one. An end to the U.S. Cent. Going back over a ten year period, cent production has increased from around 4 billion to 7.5 billion combined between the Philadelphia and Denver facilities. Knowing how things progress from the striking to distribution, the Lincoln Cent isn't going anywhere any time soon. Nor is the nickel with a much greater increase, from 500 million steadily increasing to 1.35 billion in 2019. Or double over ten years. Next, a cashless society. Again, far from true. With dimes also produced in greater numbers than ten years ago, only the quarter has been somewhat stagnant fluctuating with one-hundred million from year to year. Last year, the Reserve estimated 200 billion coin was processed through their twelve facilities, meaning old coinage not new from the mint. How could it end if we spend that much in just coin alone?





And the final myth, a true shocker, the Kennedy Half did not end for production in 2001. Yes, you read that correctly. There have been articles within various numismatic publications attesting to this fact of the 2019 being found in circulation. Looking at the mintage figures, since 2002 those numbers have been extremely consistent at around 3 million. In 2013 that total reached 9.6 million, or three times the average. Again in 2015, nearly 5 million and 2018 seeing 11 million only to fall back to 2.4 the following. Clearly these were caused from orders placed by the Federal Reserve with the United States Mint.

Comments

Mal_ANA_YN

Level 5

Well done indeed. A great explanation of the system and process. The cent and the nickel are worth saving!!!!

Mike

Level 7

Great job. People don't understand that the Treasury Department runs the mints and prices the coins. The Kennedy's are the fifth highest collected coin. If you want one you have to buy it in a set or from the mint sets. They still !Take silver proofs since the 1990's. So there are four Kennedy's A year. P&D proof and the silver proof. My book is up to date. Great blog my friend!!

slybluenote

Level 5

Just read an article in CoinWorld this morning about the Kennedy half. I can’t remember how many, but it was in the millions that were put into circulation in 2019. As usual, well researched, and well written blog my friend! Thanks for sharing!

coinsbygary

Level 5

I learned some things I didn't know. Thank you for your well-written and informative blog. I liken this blog to "insider baseball." Something most people don't know and don't think about when they spend their coin and paper money.

Kepi

Level 6

Great blog! Enjoyed it very much! I would never rely on electronic "money"... Always carry some cash... cash talks ; )

Doug S.

Level 4

Well written and interesting ! Regards Doug

$tarCollector

Level 4

Interesting blog, my friend. That is very strange about the Kennedys.

I. R. Bama

Level 5

Recent events inform me that the last thing I would ever put money into is crypto. Way too many ways for that to go sideways, even more so than the bank. What if your government doesn't want you to have it, like our friends in Canada You can argue that you have the same risk at the bank. I'd largely agree with that. But perhaps my money would be better in a community bank

CheerioCoins

Level 5

I knew some of this but also learned something! Again, a great blog. Thanks for sharing your numismatic knowledge with us!

AC coin$

Level 6

Such a great deal of information and a nice blog, instructive and descriptive for many of those who have taken this path of collectors. I've never agreed with non-physical cash because of your narrative and the many failures of electronic systems. Your words conveyed new instructions and an admirable experience.

Longstrider

Level 6

This is one of the best explanation of how all the steps in getting me my change. Thanks for that. As far as a cashless society, let me tell a little story that I witnessed just yesterday. Two women were at the checkout to pay for their to-go breakfasts. Came to around fifty bucks. So they got ready to tap their smart phone to pay. This place does accept that payment method. Oh no, So Sorry. Our computer is down you will have to pay cash. We don't have any cash on us. End of story. I have witnessed this type of thing several times. Best example being what used to be called food stamps. All electronic now. Doesn't work a lot out here for a variety of reasons. Nice idea but it's not so good in reality. Thanks!.

Long Beard

Level 5

That same thing happened to me at a gas pump some hundred miles from home due to my bank running maintenance of their system. A Saturday, and good thing I had cash.

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