Page 2 of 6 FirstFirst 1234 ... LastLast
Results 31 to 60 of 151

Thread: Canada- bye, bye penny

  1. #31
    Join Date
    Sep 2005
    Posts
    9,031
    Right now, there's over $1B of the $1 coins just piled up in Fed vaults. By law, the Mint makes them, and the Fed must buy them (credit Treasury's account with the value in digi-FRNs). They thus live on the asset side of the Fed's balance sheet, never going into circulation because no one wants them. (note that coin and FRNs are fundamentally different monetary entities. Coin is direct Treasury currency, while FRNs and the digital forms are Fed liabilities created against assets -- those assets can be the very Coin Treasury currency, of course).

    Take a gander at the latest H.4.1:

    http://www.federalreserve.gov/releas...urrent/h41.htm

    Go to Table 8, and note the Coin item. It is now $2.3B total. Over $1B of that is just the dollar coins that will never be used.

  2. #32
    Join Date
    Aug 2005
    Location
    location
    Posts
    10,959
    Quote Originally Posted by publius View Post
    Right now, there's over $1B of the $1 coins just piled up in Fed vaults. By law, the Mint makes them, and the Fed must buy them (credit Treasury's account with the value in digi-FRNs). They thus live on the asset side of the Fed's balance sheet, never going into circulation because no one wants them. (note that coin and FRNs are fundamentally different monetary entities. Coin is direct Treasury currency, while FRNs and the digital forms are Fed liabilities created against assets -- those assets can be the very Coin Treasury currency, of course).

    Take a gander at the latest H.4.1:

    http://www.federalreserve.gov/releas...urrent/h41.htm

    Go to Table 8, and note the Coin item. It is now $2.3B total. Over $1B of that is just the dollar coins that will never be used.
    And that reminds me of another possible issue. According to one economic blogger, a potential downfall of the world economy might be a run on US currency due to the need to physically ship large amounts of currency to foreign banks. I don't recall the specifics, but it's easier to create large amounts of paper money quickly than coin money. Perhaps they ship larger notes than $1, but since the 1$ is a very common note, perhaps it keeps the presses running and creates an economy of scale to keep the operation running smoothly. On the other hand, maybe that production time is better spent making $20 and $100 bills to fulfill the need mentioned above.
    Et tu BAUT? Quantum mutatus ab illo.

  3. #33
    Join Date
    Sep 2005
    Posts
    9,031
    Ara,

    PM me the link to that blog -- I'd like to read the theory. That would require a real physical run on FRNs, people demanding to pull physical cash out. The banks themselves, including the foreign just deal in digi-dollars anyway and would have no need or desire to convert their digital reserves which exist in the Fed's computers to physical FRNs beyond what they need to sastify customer desires. All of the QEing was in digital form, of course.

    As it is now, the Fed likes to maintain about $200B in cash cushion -- as of the last H.4.1 it was $177B -- in case there was such a physical run. And we make Helicopter jokes, but that's indeed how they would get that cash cushion out if need be, by helicopter, which they've done a few times in the past when there was a physical run on a bank.

    The way it works is that by volume, the $1 bill takes up the most "space", but by value, it's the $100 bill. The Bureau of Engraving and Printing prints around half a billion in total value *per day*, with the brunt of volume being $1s. 95% of that is pure turnover, replacing worn out bills, with the remainder being growth in the physical money supply required.

    Here's the Fed page on FRNs outstanding, which goes into detail:

    http://www.federalreserve.gov/paymen.../coin_data.htm

    It's got graphs, but you can click and the tables. Note that by value, $100s are the biggest chunk, followed by $20s, but by volume, it's $1s. The fraction of each outstanding does not translate into the daily printing fraction because of different lifetimes. The $1s consume a larger fraction of the replacement turnover than the fraction outstanding.

    For 2011, the volume figure was a total of 31.3B notes outstanding, with 10B $1s. So $1s make up nearly a third of the volume of bills in circulation, but are a tiny fraction of the total value in circulation, currency at $1.05T (not counting the $177B cushion).

  4. #34
    Join Date
    Oct 2001
    Location
    Clear Lake City, TX
    Posts
    9,042
    Quote Originally Posted by Ara Pacis View Post
    ... Not to mention there's a strong Gentleman's Club lobby. ...
    I hadn't considered that. A switch away from $1 bills could lead to a drastic redesign of the G-string.
    Never attribute to malice that which can be adequately explained by ignorance or stupidity.
    Isaac Asimov

    Moderation will be in purple.
    Rules for Posting to This Board

  5. #35
    Join Date
    Jun 2003
    Location
    SE Michigan
    Posts
    2,885
    Dang, you're right. I wonder how they've handled it at the "Windsor Ballet?" Of course, Canada and the Eurozone countries have already faced this problem.

    Fred
    "For shame, gentlemen, pack your evidence a little better against another time."
    -- John Dryden, "The Vindication of The Duke of Guise" 1684

  6. #36
    Join Date
    Jan 2002
    Location
    The Valley of the Sun
    Posts
    5,867
    The Clubs could sell house money that the customers could buy and the dancers could turn in later for larger bills or direct deposit.

  7. #37
    Join Date
    Sep 2005
    Posts
    9,031
    Wait a minute. The "exotic performers" do have a natural coin slot, no? But holding capacity is limited, I'm sure, and they'd need to rig something.

  8. #38
    Join Date
    Jan 2005
    Location
    Olympia, WA
    Posts
    27,060
    At faire, we do what we call "ye olde medieval bodice-tuck." Bills stay a whole lot better than coins do. I guess you could sew pouches of some sort onto a costume?
    _____________________________________________
    Gillian

    "Now everyone was giving her that kind of look UFOlogists get when they suddenly say, 'Hey, if you shade your eyes you can see it is just a flock of geese after all.'"

    "You can't erase icing."

    "I can't believe it doesn't work! I found it on the internet, man!"

  9. #39
    Join Date
    Oct 2001
    Location
    Sioux Falls, SD
    Posts
    7,781
    Quote Originally Posted by Gillianren View Post
    At faire, we do what we call "ye olde medieval bodice-tuck."
    It's a treasure chest!




    (Thank you folks, I'll be here all week. Don't forget to tip your waitress.)

  10. #40
    Join Date
    Dec 2010
    Posts
    1,740
    These coins are mostly for dollar stores and parking.

  11. #41
    Join Date
    Jun 2003
    Posts
    2,886
    Quote Originally Posted by Solfe View Post
    That's weird, they are magnetic. I had no idea.
    I remember that vending machines in Detroit used magnets to catch Canadian coins. As these were worth less than the US counterparts (at least when I was there), it added up to a significant loss to accept these at par. (On a visit to Windsor, I bought a Canadian dollar as a souvenir, and they gave me a nickel back on the deal. (Can't recall whether it was a U.S. or Canadian nickel. If the latter, maybe I had to give back a penny, ad infinitum.)
    Last edited by DonM435; 2012-Apr-01 at 11:10 PM. Reason: typo

  12. #42
    Join Date
    Jun 2004
    Location
    The Great NorthWet
    Posts
    6,693
    Canadian nickels used to be magnetic because they were actually made of that metal. That made them more intrinsically valuable than US nickels, which have always been mostly copper.

    Now I'm going to see if I've still got my stash of Canadian coins and try out the magnetism.
    Cum catapultae proscriptae erunt tum soli proscript catapultas habebunt.

  13. #43
    Join Date
    Oct 2001
    Location
    Clear Lake City, TX
    Posts
    9,042
    Quote Originally Posted by SeanF View Post
    (Thank you folks, I'll be here all week. Don't forget to tip your waitress.)
    Well, if she has a bodice full of $1 coins, that shouldn't be too hard. Just a gentle push and she'll go right over.
    Never attribute to malice that which can be adequately explained by ignorance or stupidity.
    Isaac Asimov

    Moderation will be in purple.
    Rules for Posting to This Board

  14. #44
    Join Date
    May 2005
    Location
    N.E.Ohio
    Posts
    18,957
    Quote Originally Posted by Ara Pacis View Post
    Maybe they're in circulation because they never stopped being in circulation.
    Obviously.
    What I was getting at was that there is no system in place to retire* the circulation of a particular design.

    Quote Originally Posted by Ara Pacis View Post
    As for singles ($1), people often carry enough of those to be caused inconvenience by a large coin, and a not smaller coin might be confused for a quarter or ye olde half-dollar.
    I wonder what it was like decades ago when the $1 bill bought more. I'm sure there was plenty of people with lots of coins because things were bought in coin values.

    Does anyone here remember if those big dollars and half dollars were common in transactions? I got those a lot as a kid (kids get impressed at those kinds of things), but don't know how readily they were circulated.

    Quote Originally Posted by Ara Pacis View Post
    Not to mention there's a strong Gentleman's Club lobby.
    I guess that's a stronger lobby than the dancer's lobby. I'm sure they would love to get 5's now. After all, how long ago were they getting 1's that are worth today's 5's?

    Quote Originally Posted by Ara Pacis View Post
    And cash registers will need to be made larger to carry the same number of 1$ units of currency if x coins take up more space than x dollar bills.
    Use the penny slot.
    Actually; if you retire the bill, you have a nice sized slot. Just get rid of that springy hold down thing.


    *by retire, I mean an actual end point rather than an eventual retire by attrition only.

  15. #45
    Join Date
    Oct 2001
    Location
    Sioux Falls, SD
    Posts
    7,781
    Quote Originally Posted by NEOWatcher View Post
    *by retire, I mean an actual end point rather than an eventual retire by attrition only.
    So, you want a deadline at which stores will no longer accept the older bills, and anybody who still has older bills has just lost the value of that money?

    Should they just print bills with an expiration date on them?

  16. #46
    Join Date
    Oct 2006
    Posts
    12,017
    Quote Originally Posted by NEOWatcher View Post
    Obviously.
    I wonder what it was like decades ago when the $1 bill bought more. I'm sure there was plenty of people with lots of coins because things were bought in coin values.
    In Columbus, I see 50-cent pieces a ton still. Makes sense; with parking (garages, meters, etc.) and pub transit, a lot more coin change used. I used to get dollar-coins from the vending machine at the parking garage as well. Probably easier to dispense. They didn't bother me then, because I just kept them in my car and was able to use them the next day when I needed to pay for parking.

    Here in the land of corn and cattle, I *never* see fifty-cent pieces or dollar coins. So obviously, higher-value coinage is a big-city thing, and the push to go to it is just them fancy oil-slicked-hair city types trying to impose their will on us simple country folk!

  17. #47
    Join Date
    May 2005
    Location
    N.E.Ohio
    Posts
    18,957
    Quote Originally Posted by SeanF View Post
    So, you want a deadline at which stores will no longer accept the older bills, and anybody who still has older bills has just lost the value of that money?
    I don't think any solution would be without its issues, but in a way yes. Maybe there could be some requirement beforehand that requires certain businesses and institutions to stop handing them out for a while which would greatly reduce the amount in circulation (and to prevent someone getting "stuck" with some as they get phased out).


    Quote Originally Posted by SeanF View Post
    Should they just print bills with an expiration date on them?
    That would help. Unfortunately, we would have to have a regular schedule of updates since we wouldn't know when they expire.

    Of course, Canada is a good test study since they've had the loony for quite some time now. How did they do it? Are dollar bills still acceptable currency there?

  18. #48
    Join Date
    Sep 2003
    Posts
    386
    I wonder if part of the resistance to dropping the US 1$ bill is psychological. Your bills all look very similar en masse, so someone can have a wad of 1$ bills and make it look more impressive than it really is. Similarly, unless you keep your money organized, I know when I'm in the states, I tend to pay with the first bills I find, often leaving me with a pile of 1's I need to sort out after the fact to figure out how much I have.

    Up here, I prefer the 1$ and 2$ coins (2$ coin especially because it cuts down the number of Loonies I get back). Paying a 75cent item with a 5$ bill gets me back 3 coins: 2 toonies and a quarter; whereas if you didn't have the 2$ coin you'd get 5 coins back. But anyways, the Loonie and Toonie I find are nice especially because they are large enough you can blindly find them easier than the rest of the coins; Reach into your pocket and you can pluck them out pretty easily. That, and the weight factor does make me pay with them before bills when I can, while saving my bills as much as possible.

    Oh and I'm glad we're finally ditching the penny. It's day is long past, and even the nickle's days are numbered.

    Frankly, though it wouldn't happen, I wouldn't mind too much if we just devalued the loonie by 10%. So 1 penny then would be worth 10 cents now; (Knock a 0 off of all money values in cents basically; a 3.99$ comic book would be worth 39cents; but a 42,000$ annual income becomes 4200$ annual income). It would knock us too far out of synch with the Greenback however, and people would throw a fit regardless.

  19. #49
    Join Date
    Jun 2004
    Location
    The Great NorthWet
    Posts
    6,693
    Quote Originally Posted by NEOWatcher View Post
    Does anyone here remember if those big dollars and half dollars were common in transactions? I got those a lot as a kid (kids get impressed at those kinds of things), but don't know how readily they were circulated.
    I'm a little older than many on this board and remember both in common circulation in my youth. Made of actual silver, at that. I grew up in Montana and the old silver dollars were in common circulation into at least the late 1950's. Then the treasury released a bunch of them back in DC and they were immediately snapped up by folks who knew they were worth more than $1 in silver value. That made the news in MT and they disappeared from circulation literally overnight.


    I guess that's a stronger lobby than the dancer's lobby. I'm sure they would love to get 5's now. After all, how long ago were they getting 1's that are worth today's 5's?
    That occurred to me as well.


    Use the penny slot.
    Actually; if you retire the bill, you have a nice sized slot. Just get rid of that springy hold down thing.
    Use the half dollar slot, you really shouldn't need that any more either. For an interim, until we get our own toonie, put $2 bills in the dollar bill slot.

    The Washington State Ferry system pretty routinely passes out both half-dollars and $2 bills in change.
    Cum catapultae proscriptae erunt tum soli proscript catapultas habebunt.

  20. #50
    Join Date
    Aug 2005
    Location
    location
    Posts
    10,959
    Quote Originally Posted by NEOWatcher View Post
    Obviously.
    What I was getting at was that there is no system in place to retire* the circulation of a particular design.
    There is a system in place to do that, it's just not clear if it is actually used with that criteria in mind. The Federal Reserve withdraws from circulation currency that is counterfeit and unfit (which probably means damaged, but might mean more) and that means they have the ability to select by design. So, the question is not if they have the capability, but why they don't use it... assuming they're not already using it.

    I guess that's a stronger lobby than the dancer's lobby. I'm sure they would love to get 5's now. After all, how long ago were they getting 1's that are worth today's 5's?
    A reliance on fivers would probably mean an overall decline in revenue due to fewer transaction as a whole. Management's lobbies are almost always stronger than workers' lobbies. And in case no one got the hint, I was also referring to blackmailing congressman because they would know of their activities at those establishments.

    Use the penny slot.
    Actually; if you retire the bill, you have a nice sized slot. Just get rid of that springy hold down thing.
    Obviously, but the issue is whether that slot will hold as much in coins as it held in bills.
    Et tu BAUT? Quantum mutatus ab illo.

  21. #51
    Join Date
    May 2005
    Location
    N.E.Ohio
    Posts
    18,957
    Quote Originally Posted by Ara Pacis View Post
    Obviously, but the issue is whether that slot will hold as much in coins as it held in bills.
    Quarters have a similar issue. Since the cashiers keep them in thier rolls until they are needed, then they would seldom need to hold more than a roll. Most cash registers I have seen can easily fit 2 to 3 rolls (about 100 coins).

  22. #52
    Join Date
    Aug 2005
    Location
    location
    Posts
    10,959
    Quote Originally Posted by NEOWatcher View Post
    Quarters have a similar issue. Since the cashiers keep them in thier rolls until they are needed, then they would seldom need to hold more than a roll. Most cash registers I have seen can easily fit 2 to 3 rolls (about 100 coins).
    But that's apples and oranges. Not only do I not recall quarter dollars ever coming in an Oranges format, it's not clear if a future $1 issuance in coin would be in the quarter's apple format.
    Et tu BAUT? Quantum mutatus ab illo.

  23. #53
    Join Date
    May 2005
    Location
    N.E.Ohio
    Posts
    18,957
    Quote Originally Posted by Ara Pacis View Post
    But that's apples and oranges. Not only do I not recall quarter dollars ever coming in an Oranges format, it's not clear if a future $1 issuance in coin would be in the quarter's apple format.
    I don't see the difference. Please explain.

  24. #54
    Join Date
    Sep 2005
    Posts
    9,031
    Yes, retiring currency is easy enough. The Fed would just order the banks to turn in the targeted currency as they receive it, and not give any more out. That would be attrition, and it would work fine. And, as an additional step, you can decree that by a certain date in the future, the targeted currency would no longer be legal tender, but could still be exchanged at a bank past that date. The banks are the instrument by which worn out currency is continously replaced anyway.

    Believe it or not, currency with an expiration date has actually been done before. There's a name for it, I forget, but it's a monetary trick in desperate times to try to get people to start spending money (use before it expires) in times of deflationary depression. "Stamp scrip", that's what it's called. Basically it's implemented as a tax on holding currency. At the end of a given period, you must pay a tax and get the currency stamped with a new stamp to make it good for the next period.

    What that is is just a way to implement a negative interest rate, of course, to fight the dreaded zero bound on interest rates which produces the dreaded liquidity trap --> deflationary spiral. Some argue we're in that now, and some of our economic geniuses have made proposals for various negative interest rate schemes like this. This isn't the Black Monday thread where we've discussed all this crap at length, but suffice it to say in my opinion, we're in a debt overhang trap, not a true liquidity trap.

  25. #55
    Join Date
    Sep 2005
    Posts
    9,031
    And I'll agree that opposition to dollar coins is mostly pyschological. We've used them in past, but have just become set in our ways of using bills now. The only way to get the public to change is to force it by withdrawing the $1 bill from circulation and forcing people to use coins. There would be much weeping and wailing and gnashing of teeth and hissy fits thrown, but we'd get over it.

    Me, if I were in charge, I would force the change, but emotionally, I'd hate myself for it and would complain like everyone else would. And I'd pull the penny as well.

    We used to have a half cent coin which was withdrawn from circulation around 1857 or so and a new, smaller one cent coin introduced. The inflation factor from then to now is a whopping 20:1, actually a little greater, meaning a half cent coin was the equivalent of a dime today. Thus, in purchasing power terms, they did the equivalent of pulling the dime from circulation and making the smallest unit 20 cents, close to a quarter today.

    When the Brits withdrew the farthing back around 1960 or whenever it was, the purchasing power was several times our current penny. Indeed, I think the penny has less purchasing power than any smallest unit of currency in any decent (non hyperinlationary banana republic crap) economy.

  26. #56
    Join Date
    Oct 2006
    Posts
    12,017
    The more I think about it, the more I enjoy the idea of carrying around a coin pouch tied to my belt a-la ... well, any time prior to the early 1900's?

    And if I ever turned to the dark side, I could carry around a small dagger with which to cut purse-strings of the more fortunate. Society lacks that level of olde-fashioned highwayman'ism that we see in the movies.

  27. #57
    Join Date
    Sep 2003
    Location
    The beautiful north coast (Ohio)
    Posts
    38,555
    Quote Originally Posted by publius View Post
    Yes, retiring currency is easy enough. The Fed would just order the banks to turn in the targeted currency as they receive it, and not give any more out. That would be attrition, and it would work fine. And, as an additional step, you can decree that by a certain date in the future, the targeted currency would no longer be legal tender, but could still be exchanged at a bank past that date. The banks are the instrument by which worn out currency is continously replaced anyway.
    It happened all over Europe upon the adoption of the Euro.

    I still have a 10 Pfennig (Deutschmark) and 50 centime (French francs) coins in my desk as souvenirs.
    At night the stars put on a show for free (Carole King)

    All moderation in purple - The rules

  28. #58
    Join Date
    Oct 2001
    Location
    Clear Lake City, TX
    Posts
    9,042
    Actually, my wife has apparently always gone on the premise that money has an expiration date and should be spent quickly before it decomposes or combusts or something.
    Never attribute to malice that which can be adequately explained by ignorance or stupidity.
    Isaac Asimov

    Moderation will be in purple.
    Rules for Posting to This Board

  29. #59
    Join Date
    Sep 2003
    Location
    The beautiful north coast (Ohio)
    Posts
    38,555
    Quote Originally Posted by Jim View Post
    Actually, my wife has apparently always gone on the premise that money has an expiration date and should be spent quickly before it decomposes or combusts or something.
    My wife has the same theory. They must both be economists.

    You know, "paper" money isn't really paper (wood pulp), it is actually closer to cotton fabric. Maybe the cotton weevils will eat it. Now I know, you're going to ask me for some proof of this. But come one, everyone knows that money is the root of all weevil.
    At night the stars put on a show for free (Carole King)

    All moderation in purple - The rules

  30. #60
    Join Date
    Oct 2001
    Location
    Sioux Falls, SD
    Posts
    7,781
    Quote Originally Posted by NEOWatcher View Post
    I don't think any solution would be without its issues, but in a way yes. Maybe there could be some requirement beforehand that requires certain businesses and institutions to stop handing them out for a while which would greatly reduce the amount in circulation (and to prevent someone getting "stuck" with some as they get phased out).
    The trouble with prohibiting businesses from handing them out is that it greatly increases the amount of cash a business needs to keep on hand. I mean, the five dollar bill one customer gives the business is the same one that business gives in change to the next customer. If they can't do that with "old" fives, they've got to keep a stock of "new" fives in the till.

    And I wonder how much of a problem it really is. I just checked my wallet - I've got 14 bills in there right now. One is dated 2004 and 12 are dated 2006. The remaining bill is a 1976 $2 bill - I'm not even sure why I carry it around, because I go out of my way not to spend it.

    Quote Originally Posted by Taeolas View Post
    Up here, I prefer the 1$ and 2$ coins (2$ coin especially because it cuts down the number of Loonies I get back). Paying a 75cent item with a 5$ bill gets me back 3 coins: 2 toonies and a quarter; whereas if you didn't have the 2$ coin you'd get 5 coins back. But anyways, the Loonie and Toonie I find are nice especially because they are large enough you can blindly find them easier than the rest of the coins; Reach into your pocket and you can pluck them out pretty easily. That, and the weight factor does make me pay with them before bills when I can, while saving my bills as much as possible.
    You know, it seems to me that the opening sentence of that paragraph is almost completely contradicted by the rest of it. It seems that you "prefer" the $2 coin, not the $1 coin, and you only "prefer" it in the sense that you "prefer" to get rid of it again as soon as you can.

    Quote Originally Posted by NEOWatcher View Post
    I don't see the difference. Please explain.
    If I may be so bold as to speak for Ara, quarters have always been coins, never bills, and a dollar coin would probably be different in size/weight than a quarter. Therefore, Ara suspects that looking at how cash registers/tellers handle quarters doesn't tell us much about how they would handle a hypothetical dollar coin.

    Quote Originally Posted by publius View Post
    Believe it or not, currency with an expiration date has actually been done before. There's a name for it, I forget, but it's a monetary trick in desperate times to try to get people to start spending money (use before it expires) in times of deflationary depression. "Stamp scrip", that's what it's called.
    How does that work for change? If I pay for something with two $10s with different expiration dates, what am I entitled to demand be the expiration date on the $5 and $1s I get as change?

Similar Threads

  1. Hey...wait a sec...now that the penny's gone
    By banquo's_bumble_puppy in forum Off-Topic Babbling
    Replies: 11
    Last Post: 2012-Jun-13, 01:32 AM
  2. A Penny for your Curiosity on Mars
    By Fraser in forum Universe Today
    Replies: 0
    Last Post: 2012-Feb-27, 03:00 AM
  3. Canada eliminating penny
    By banquo's_bumble_puppy in forum Off-Topic Babbling
    Replies: 49
    Last Post: 2011-Feb-03, 04:19 AM
  4. The penny that landed on its edge
    By banquo's_bumble_puppy in forum Off-Topic Babbling
    Replies: 22
    Last Post: 2008-Apr-09, 07:08 PM
  5. Eliminate penny or no?
    By banquo's_bumble_puppy in forum Off-Topic Babbling
    Replies: 126
    Last Post: 2007-Oct-30, 12:38 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
here
The forum is sponsored in-part by: