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Long Beard's Blog

10 Jul 2020

Cause and Effect

Coins-United States | Long Beard

Once again I found myself pondering on a topic for this week's blog. Not for a lack of subject matter, rather ideas of interest or education. As Ibegan scrolling through a few online forums and seeing postings related to the COVID-19 pandemic, from how it is affecting coin shows and sales to what collectors are doing with their time stuck at home while under a mandate, this seems like an interesting topic to discuss for the week. Enjoy!


In a June 11 press release the Federal Reserve acknowledge that "the COVID-19 pandemic has significantly disrupted the supply chain and normal circulating patterns for U.S. coin.". Six days later, on June 17, Federal Reserve Chairman Jerome Powell described the "shortages" by further explaining "stores have been closed so the whole system of flow has kind of stopped.". This does not, however, mean that there is an actual coin shortage but rather a supply issue. As of April, the Treasury estimation of the total coin value struck for circulation is 47.8 billion.Nearly identical tothe previous April figure of 47.4 billion. While there is an adequate supply available for circulation, the slowed pace in commerce has meant that sufficient quantities are not readily available where needed. Further straining the need, as retailers and establishments re-open many are only accepting electronic payment as a means to slow the spread.


As of this writing,and drawing upon the conclusion of an ample supply of available coin already struck and that of previous years still in vaults, there appears to be noneed fornew coinage.While the need will be based onorders to the Reserve by banks as circulation increases, we mustkeep in mind that it has passed the midway point of a fiscal year. So does this mean that coins dated 2020 will be "rare"? Key dates perhaps. From my perspective, I look to the financial crisis of 2008/2009 as a strong indicatorwhennickel and dime production were halted in April of 2009. The reason in that year due, as a whole, to consumers spending or cashing in coin rather than hoarding it which in turn saw bank inventories climb substantially. With the over abundance of coin on hand, the orders forreplacement from the Reserve ceased. Looking at the nickel, for example, 79.2 million were struck in 2009 as opposed to 640.6 the previous year.



Comments

Mokie

Level 6

No matter how you look at it, a mintage of 79 million, using your nickel example from 2009, will never be a key date except in the marketing mind of speculators and late night shopping channels. I doubt anything minted for general release in 2020, except those pesky W quarters, will ever be true keys.

Long Beard

Level 5

I agree on both points. The '09 may one day be a semi-key at best, with most still in mint state since they rarely show up in change. At least for me. As for the current year, I doubt any denomination would make semi-key status as these I receive on a regular basis. Yet so many seem to think otherwise.

slybluenote

Level 5

I agree with your assessment Long Beard. I have not changed my collecting nor spending habits. I did put my 2020-W nickel in a slab though. I have also put some 2020 quarters, nickels, dimes, and cents in flips. Just the ones that I found that were nice looking.. :-) I had heard on the news that there was a coin shortage, but like you, I think it's a "logistical problem" and not a actual shortage problem. Thanks for the insightful and informative post!

Golfer

Level 5

I have a load of cents rolled and a bunch of change. I should turn it all in now while they are looking for change. Lots of dimes, nickels, quarters.

World_Coin_Nut

Level 5

We have seen some signs at local retailers asking for exact change and/or no cash to help with there coin shortage. Sounds like a silly problem to have in this day. I mean, obviously there are plenty of coins around just not in the right places.

Longstrider

Level 6

There is a coin shortage where my wife works. I also feel it is a supply problem. It's good to know the mint created another rarity with the burnished eagle, thanks Mike. Sometimes it's hard to believe the mint works for us..

I. R. Bama

Level 5

The coin problem has finally come to the Shenandoah Valley. You implied (correctly, I believe), that 2020 coins will become key dates. Hmmm.. time to see if I can get a few rolls of each denomination from the bank. Good call!

I also hear and read about a coin shortage but have not experienced any problems. Can't blame this one on us collectors.

Mike

Level 7

Were I live we do not seem to be affected by the coin shortage. If was to guess the Fed has its bank about thirty minutes from where I live. No signs. As far as rarity goes the Burnished Dollar sold.out in four hours yesterday causing a rarity. That coin is part of a set. The other coins I dont think will change in price. At this point I'm not worked about it. Many people use their debut card anyway. Thanks for the blog.

Oobie

Level 4

The coin “shortage” is a very interesting topic. I read an article that said the FR and the Mint were working together to increase production of 2020 coins. With the amount of coins in circulation now, it seems counterintuitive to increase production. It seems as if it’s an issue of transportation and circulation; not a shortcoming. Your write up reminds me of the issue that arose with the early years of the small cent. The public was annoyed by the large amount of small cents that were produced, causing them to be over abundant. Thank you for the interesting blog post!

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