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Why do U.S. coins seem to be in short supply?

federalreserve.gov

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Re: Why do U.S. coins seem to be in short supply?

#31

Post by jmann99999 »

vikramkr wrote: post #2

What does a shortage of coins look like today? Difficulty paying for a parking space or a gumball? Is it just difficulty giving change in a cash transaction? Wouldn't stores have access to banks that arent closed to be able to give change? What's the role that coins play today that would be noticeable?

I can answer the "wouldn't stores have access to banks that aren't closed?" question.

I work in a niche industry that enables stores to order coin from banks. The issue is that stores can't get coins from banks because the banks don't have them either. Banks order coins (and notes) from the Federal Reserve. The Federal Reserve is shorting the shipment of coins to all major banks.

So, when a store like Target orders coin from its bank, they may order $500 in pennies. The bank then may ship them no pennies or a fraction of the order, depending on the bank vault the coin is coming from, what inventory they have, and formulas in place.

Look for this issue to go on through at least Christmas.

Re: Why do U.S. coins seem to be in short supply?

#32

Post by moomin »

There’s a phenomenal amount of double-think going on in this sentence.

“While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.”

Literally the second clause contradicts the claim of the first.

Re: Why do U.S. coins seem to be in short supply?

#33

Post by codefined »

moomin wrote: post #32

There’s a phenomenal amount of double-think going on in this sentence. “While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.” Literally the second clause contradicts the claim of the first.

I believe it is implying that there is enough coins in the country for everyone. However, unequal distribution due to COVID means some specific areas are lacking.

Re: Why do U.S. coins seem to be in short supply?

#35

Post by zdragnar »

moomin wrote: post #32

There’s a phenomenal amount of double-think going on in this sentence. “While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.” Literally the second clause contradicts the claim of the first.

How so? The first is speaking broadly, the second refers to specific localities.

Some areas face a shortage because there is an oversupply in others, with a total supply that is adequate. Were they circulating more, the concentrations would presumably level out (or so the argument reads to me).

Re: Why do U.S. coins seem to be in short supply?

#36

Post by a3n »

vikramkr wrote: post #2

What does a shortage of coins look like today? Difficulty paying for a parking space or a gumball? Is it just difficulty giving change in a cash transaction? Wouldn't stores have access to banks that arent closed to be able to give change? What's the role that coins play today that would be noticeable?

Truck driver. Many truck stop convenience stores, many Walmarts have signs asking for coins, and/or to use plastic.

Saw one sign offering coin redemption (I guess in one of those machines) for no fee.

Re: Why do U.S. coins seem to be in short supply?

#37

Post by late2part »

sueders101 wrote: post #30
krapp wrote: post #9

Earlier quoted context omitted.

A lot of apartment complexes also have on-site laundromats that are coin operated. I've never understood why the cost of that isn't included in the rent, landlords can't be taking that much of a cut from it.

Many pay-to-use(coin or card) laundry rooms in apartment complexes are entirely contracted out to a third party company that handles everything; payment collection, machine leasing, service/repairs, etc. On the whole I think it's easier for them this way. https://www.wash.com/360-laundry-room-solution/ https://www.coinomatic.com/multi-housing-coin-laundry-soluti...

That's very interesting. In my MCOL of city I've been looking at buying some apartment buildings and many of them advertise the W/D in the building as a source of revenue.

Re: Why do U.S. coins seem to be in short supply?

#38

Post by cvoss »

moomin wrote: post #32

There’s a phenomenal amount of double-think going on in this sentence. “While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.” Literally the second clause contradicts the claim of the first.

"Overall" vs. "in some areas". "The average is fine, but the standard deviation is high" is how I read that sentence, which is not a self-contradicting claim.

Re: Why do U.S. coins seem to be in short supply?

#39

Post by a3n »

My first thought at the headline was that as people head home to isolation, the coins in their pockets stay home with them. Which is probably true.

But the article talks about closing businesses, and those coins leaving circulation until those processes work through.

Re: Why do U.S. coins seem to be in short supply?

#40

Post by secondderiv »

late2part wrote: post #34

It's my opinion that the web page is a non-answer. It's unclear to me from the page how the supply of coins is disrupted by the pandemic. Perhaps it's because the mint is shut down, but they don't say that. If coinage isn't an 'essential' business, that seems odd.

The first of the related links has the full answer

"The primary issue with coin is a dramatic deceleration of coin circulation through the supply chain. As of April 2020, the U.S. Treasury estimates that the total value of coin in circulation is $47.8 billion, up from $47.4 billion as of April 2019. While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed. With establishments like retail shops, bank branches, transit authorities and laundromats closed, the typical places where coin enters our society have slowed or even stopped the normal circulation of coin. The coin supply chain includes many participants, from the U.S. Mint who produces new coin, to the Federal Reserve who distributes coin on the U.S. Mint’s behalf, to armored carriers, banks, retailers and consumers, all of whom have a role to play in helping to resolve this issue."

https://frbservices.org/news/communications/063020-federal-r...

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