Wednesday, March 9, 2011

Saving money by dropping the $1 bill

Noticed something of "interest" today, via:

http://mjperry.blogspot.com/2011/03/1-coin-would-save-55-billion-lets-do-it.html
http://mjperry.blogspot.com/2011/03/switching-to-dollar-coin-seems-like-no.html

The $1 bill costs much more to maintain in circulation than the $1 coin.  Yet the Sacagawea is nowhere to be found.  Nobody carries them, nobody spends them.  They get thrown in the change jar and traded in for folding money.  In the seven years our business has been open, we've had less than 10 go through the register.

I can tell the Mint how to make people prefer coinage over paper money.  Put metal of intrinsic value in the coin.  For example, the 1970 Kennedy half dollar is 40% silver, and the '64 Roosevelt dime is 90% silver.  Of course, the metal value of these coins is $5.35 and $2.62, respectively.  Does this tell you something?  It does me.  (For reference, the metal value of the current dime is $0.02, and the Sacagawea is $0.07.)

Exercises on the bottom limit of value for current coins, and how long at current rates it will take to reach it, are left to the reader.

On a related note, I'll take any of those old dimes and dollar coins off your hands for you.  I'm willing to pay the next higher denomination of current coinage (for a Kennedy 50c I'll give you a spanking new $1 bill or Sac).  What a deal!  No?  Then why do you let the gubmint force you into the same deal by depreciating (or "Easing") your dollars?

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