One Promising Economic Sign: Demand for Coins is Up By Josh Sanburn
| January 11, 2012
The U.S. Mint circulated more quarters, dimes, nickels
and pennies last year. And that’s a good thing.
When the economic crisis hit a few years ago, people turned
to one of the most traditional safe havens for savings:
went into their piggy banks and their coin jars and spent
those coins,” U.S. Mint Deputy Director Richard Peterson
told NPR’s Planet Money. “Those coins flowed
back into the banks and then ultimately back to the Federal
Reserve. The Federal Reserve started filling up and they
turned off the spigot of new coin production from the United
But last year, coin shipments from the Mint finally increased
— by 37%, which means that less people are digging
around their own homes for dimes and nickels. Not surprisingly,
gold and silver coins were also extremely popular as many
Americans looked to precious metals as a more stable investment.
Gold and silver collector’s coins were actually the
largest source of revenue for the U.S. Mint last year. More
than 45 million ounces of them were sold in 2011, which
was about a 30% increase, a record spike.
But even though many Americans were still concerned enough
about the economy to buy up gold and silver, the increase
in circulating coin production was a promising sign. What’s
not so promising is that it now takes the U.S. Mint 2 cents
to make a penny and 10 cents to make a nickel, according
to the Mint’s annual report. (The Mint says it’s
looking into ways to reduce these costs.)
More bad news for the mint: the recent announcement by
the White House that the Congressionally mandated presidential
dollar coin program would be discontinued. There was little
to no demand for many of the coins, but the Mint was forced
to make them anyway. However, even though very few sold,
the ones that did sell actually made a little money for
the Mint: the coins cost 18 cents to make and were sold
for $1. But overall, axing the program is slated to eventually
save the federal government $50 million.
Even without the presidential dollar coin program, the
Mint still plans to be in the black this year. And any of
that profit will go to paying down the national debt.