Piggy and the Banks - coin and $1 bill shortage?

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From Gary North's Banking site:

Piggy and the Banks: A Fairy Tale for 1999

As inadequate as the fractional banking money stock is, the coinage and small bill levels seem even worse! I remember reading a while back, maybe a year ago, that the Fed had placed an inordinately large special order for coinage with its suppliers.

One wonders - how long does it takes to produce a 5 billion pennies (1 extra roll for each household)?

-- Nathan (nospam@all.com), January 16, 1999

Answers

Once again Gary North, who would welcome a collapse of the banking system because, among other reasons (such as validating his past, failed predictions of collapse), it would hasten the day when Christian Reconstructionists could take over society, publishes a scary story about coins and bills without any contrary argument.

He could, for example, have noted that it would be just as or more useful to stockpile wealth in the form of barterable goods. But no, he didn't point that out. That would tend to oppose the panic curve, and though he tries to be careful not to show it, Gary wants societal panic.

-- No Spam Please (anon@ymous.com), January 16, 1999.


No spam: uh...you mean like the cases of booze, foods, and supplies down in most of this forums's basements?

-- a (a@a.a), January 16, 1999.

a,

Yes.

-- No Spam Please (anon@ymous.com), January 16, 1999.


No Spam,

Yes, GN's motives are no secret. He's pretty clear about that elsewhere on the forum. But then again, he, like many, many others, is heavily into Biblical prophecy. Anything that supports "end times" is fair game. That said, fractional banking, especially at the ridiculous levels at which it is currently practiced, is a disaster waiting to happen anyway, regardless of what GN thinks or says.

Apart from that, take the ideas in the article and throw them into your Y2k toolkit as another possible early warning indicator that something may be, or may be about to be, amiss.

I am, and have been, watching for the following, in order:

* A change in the mix of coinage from pre-1998 to mostly coins minted on or after 1998 (this seems to be happening already)
* More and more torn, partial, and worn out currency in circulation (this, too, seems to be happening already, but it's not really obvious yet)
* A noticeable shortage of $1 and then $5 bills
* An "officially stated" shortage of coins and small bills, quickly followed by
* Limitations on cash withdrawals

Or, maybe not...

-- Nathan (nospam@all.com), January 16, 1999.


Gary North has frequently recommended that for those of us who want to transfer our wealth too the far side of the turmoil, we had better do it with barterable goods, and not necessarily money.

I agree with this recommendation - things that are cheap today will not be cheap tomorrow.

-- dave (weootendave@hotmail.com), January 16, 1999.



Nathan,

>Yes, GN's motives are no secret. He's pretty clear about that elsewhere on the forum.

I just checked www.garynorth.com, and couldn't find any statement about his motives in a five-minute search. I got another copy of his "Blind Man's Bluff in the Year 2000" and read it -- nothing there about Christian Reconstructionism -- did I miss it?

So, where is he clear about his motives on his Y2k site?

>But then again, he, like many, many others, is heavily into Biblical prophecy. Anything that supports "end times" is fair game.

So I point out once in a while for the sake of Y2k-newbies that GN has a certain bias. I wouldn't bother if his site weren't so prominent.

>That said, fractional banking, especially at the ridiculous levels at which it is currently practiced, is a disaster waiting to happen anyway, regardless of what GN thinks or says.

Is it a good idea to say things that tend to promote this disaster while we face others? My opinion is: No.

>Apart from that, take the ideas in the article and throw them into your Y2k toolkit as another possible early warning indicator that something may be, or may be about to be, amiss.

Agreed.

>* A change in the mix of coinage from pre-1998 to mostly coins minted on or after 1998 (this seems to be happening already)

Do you _really_ think people are already changing their coin-saving habits so significantly as to noticeably affect the mix? (Note that since it's now early 1999, there will naturally be a higher proportion of 1998 coins in circulation now than there were, say, five months ago. Same has been true early in every past year.)

If so, since coins last several years on average, and the mint's annual production capacity is only a fraction of the amount in existence, this would result in a noticeable decrease in the amount of coinage in "circulation" (by which I mean the coins in routine use in commerce, not including the coins being hoarded, held back, or collected by individuals). Do you see stores noticeably running low on coins in registers more frequently than usual?

>* More and more torn, partial, and worn out currency in circulation (this, too, seems to be happening already, but it's not really obvious yet)

Okay -- the Treasury has announced that it's not taking worn currency out of circulation at the usual rate now, in conjunction with ramping up the production of new bills.

>* Limitations on cash withdrawals

I've placed a small wager on whether a certain type of financial transaction will be temporarily discouraged or limited in the near future.

-- No Spam Please (anon@ymous.com), January 17, 1999.


No Spam,

You are right, I couldn't find anything on GN's site but Y2k stuff, I must have read about his "views" elsewhere. I stand corrected. And thanks for looking out for the newbies.

I don't think the banks and Y2k can be separated. Y2k issues immediately raise up the weaknesses inherent in fractional reserve banking. Banking, as it is practiced today, is a total confidence game. Y2k is a test of that confidence. A banking system, especially a fractional reserve fiat currency banking system, should be able to withstand a variety of tests of its confidence, otherwise that system is not what it should be. And that's all I have to say, Y2k or not.

Actually, I "really" do think coin hoarding is occurring and the mix of mint dates is changing. Note my opening remarks about the blurb I came across months ago concerning a large coinage order form the Fed. Actually, it wasn't for coins, per se, but for the raw materials to make the coins -- tons and tons of nickel, copper, zinc.

My theory is that a shortage hasn't been noticed, because, as of right now anyway, there probably is no shortage. The only clue would be an unusually large proportional rise in 1998 coins in circulation -- larger than would be expected, even with the new circulation year. I believe the Fed saw a trend starting months ago and greatly increased their orders for 1998 coinage. I frequently receive nothing but 1998 coins as change for minor daily transactions, mostly pennies, nickels, and dimes. Oddly enough, I haven't seen that many 1998 quarters yet.

Ignoring the rickety bridge doesn't make it any safer, though cautioning a few about it may save their lives. By posting this article at his site, is GN causing the stampede over the bridge, is he predicting the stampede, or is the stampede already (quietly) underway?

Care to reveal the particulars of your "wager"?

-- Nathan (nospam@all.com), January 17, 1999.


I am torn on this issue. I was not aware of Gary North's underlying beliefs/motives until I read the excerpt from the Time article about Gary.

See http://cgi.pathfinder.com/time/reports/millennium/index.html

Even with questionable motives, however, I go back to my main concern; that is, protecting my family in every area, including financial collapse. Regardless of his motives, there are shakeups coming.

P.S. If anyone has other resources on Gary North interviews, please post them here!

-- Mom (not@this.time), January 18, 1999.


info on background of Gary North: see:

Gary North, Dr Doom -- Thriving on Catastrophe: http://www.provide.net/~aelewis/y2ko/y2ko_300.htm#GaryNorthx

-- alan (aelewis@provide.net), January 18, 1999.


Nathan,

>Note my opening remarks about the blurb I came across months ago concerning a large coinage order form the Fed. Actually, it wasn't for coins, per se, but for the raw materials to make the coins -- tons and tons of nickel, copper, zinc.

Possibilities: (1) They're simply stocking up on raw materials for the same reason as Coca-Cola is -- in case of Y2k-related disruptions in the supply chain. (2) They expect large demand for coins dated 1999 and 2000.

Do you know whether the U.S. Mint has added any significant amount of coin-minting capacity recently? Without that, I wouldn't think they have enough slack in their current production to allow much increase.

-- No Spam Please (anon@ymous.com), January 18, 1999.



nospam,

Those are interesting possibilities. (1), doubtful -- there is only so much space for storage. I suppose the materials could be stockpiled off-site. I think they're tuning the raw stuff into coin as quickly as possible. (2), yes, it appears there will be demand all right, but not necessarily for "sentimental" reasons.

I have no idea what the mint's production schedule has been in past years. Perhaps they normally run at some reasonable level of capacity, say 75%, with a single 8-hour shift or maybe two 8-hour shifts five days a week. In this scenario, they could ramp up to 24x7 at 90% of capacity, increasing output by more than 150% over 16x5.

All speculation, of course...

-- Nathan (nospam@all.com), January 19, 1999.


The most likely reason the US Mint is ordering a larger than usual amount of "raw" materials is due to the introduction of the "new" quarters that start in 1999. There will be 5 different designs issued each year for 10 years commemorating each of the 50 states. These will be issued in the order of their admittance into the Union.

http://www.usmint.gov/50states/index.cfm

Figuring the yearly mintage for quarters is around 1.6 billion coins, the US Mint would probably have to coin 8 billion quarters (1.6 times 5 designs) just to keep up with demand. They did the same thing in 1975-76 for the bicentennial design

-- Russell (Oh Boy@y2k.com), January 19, 1999.


Russell,

Thanks for that tidbit. I now dimly remember hearing about this. Might explain why I haven't seen as many 1998 quarters as the other denominations.

Do you suppose these "commemorative" plans are still on schedule? When is the first release date?

-- Nathan (nospam@all.com), January 19, 1999.


Out of pennies, nickels, dimes and quarters...anyone know which coin's metal is worth the most compared with its face value?

How much is the metal in each of these coins worth?

-- Kevin (mixesmusic@worldnet.att.net), January 19, 1999.


kevin,

I would guess the penny(!) is worth the most versus face value.

-- Nathan (nospam@all.com), January 19, 1999.



Nathan

I if remember correctly (I read the coin magazines at the public library and at the book stores!), they have already started minting these coins for circulation. It would probably start showing up in a couple months... if your lucky. Most people will not spend these quarters as they seem to appear unique, at least until they start getting more in change. So I am expecting to not see them til summer '99 at the earliest.

In 1999 you'll see different reverses (where the eagle is, or was) on the quarter. The following states are for 1999:

Connecticut

Delaware

Georgia

New Jersey

Pennsylvania

Assuming we get into the Year 2000, then you'll see:

Massachusetts

Maryland

South Carolina

New Hampshire

Virginia

-- Russell (Oh Boy@y2k.com), January 19, 1999.


Kevin,

Sometime back in the late 1960s or the 1970s the price of copper got so high it was near the level that would make pennies worth melting down. I don't recall that having happened for any of the other post-1965 coins.

-- No Spam Please (anon@ymous.com), January 19, 1999.


I've already gotten a couple of the new Delaware quarters.

-- Bill (billclo@hotmail.com), January 20, 1999.

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