There are some things we just take for granted in our great country and one of them is coins.
That is what I was caught off guard today when I went to a local grocery store and saw this sign posted…
I had heard about the possibility of a coin shortage but actually seeing that stores in my home town didn’t have coins to make change got me wondering if this is real and if so what is really going on.
It just seemed so far fetched.
And where did all the coins go?
Are people saving / hoarding coins?
If so are coins the new toilet paper?
I did some research to get to the bottom of it and it turns out it makes more sense than I initially thought possible.
According to a press release by the treasury there are 2 main reasons for this strange occurrence.
FIRST, the COVID crisis has all but shut down the production of new coins because the federal mints have been shut down.
The other, bigger reason, that makes sense, is that the public has not been able to visit places where they traditionally deposit coins to change them up for larger forms of currency.
The Statement Read:
“The COVID‐19 pandemic has significantly disrupted the supply chain and normal circulation patterns for U.S. coin. In the past few months, coin deposits from depository institutions to the Federal Reserve have declined significantly and the U.S. Mint’s production of coin also decreased due to measures put in place to protect its employees. Federal Reserve coin orders from depository institutions have begun to increase as regions reopen, resulting in the Federal Reserve’s coin inventory being reduced to below normal levels.”
“… The Federal Reserve is working on several fronts to mitigate the effects of low coin inventories. This includes managing the allocation of existing Fed inventories, working with the Mint, as issuing authority, to minimize coin supply constraints and maximize coin production capacity, and encouraging depository institutions to order only the coin they need to meet near‐term customer demand.”
On June 17, Federal Reserve Chairman Jerome Powell used the word “shortages” to describe the situation, saying that the “flow of coins through the economy” had “kind of stopped.” Asked whether he was aware of a coin shortage in Tennessee and elsewhere, Powell told the U.S. House Committee on Financial Services:
“Yes, I am aware of it. I’m very much aware of it, and let me say what’s happened is that with the partial closure of the economy, the flow of coins through the economy has gotten all — it’s kind of stopped. The places where you go to give your coins and get credit [inaudible] and get cash, you know, folding money — those have not been working, stores have been closed, so the whole system of flow has kind of come to a stop. We’re well aware of this. We’re working with the [U.S.] Mint, and we’re working with the [Federal] Reserve banks, and as the economy reopens we’re seeing coins begin to move around again.”
Pressed by U.S. Rep. John Rose, R-Tenn., on whether the problem was temporary or pointed to larger structural issues, Powell insisted it was only temporary:
“We believe it’s just temporary. It’s due to the fact of the economy being, in significant part, closed, as I mentioned. And the flow of coins through the economy … Now we’re beginning to see those shortages. We’ve been aware of it, we’re working with the Mint to increase supply and working with the Reserve banks to get that supply where it needs to be. So we think it’s temporary, a temporary situation.”
On June 30th the Federal Reserve gave an update on it’s additional efforts, along with the US Mint, to take on the challenges of coins that are actually in circulation by establishing a Coin Task Force:
“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.”
“… In early July, the Federal Reserve will convene a group of industry leaders for a limited-scope, limited duration task force, the U.S. Coin Task Force, to work together to identify, implement, and promote actions to reduce the consequence and duration of COVID-19 related disruptions to normal coin circulation.”
So there you go…
There is a coin shortage in the US and now our local vendors are struggling to make change.
When you go out shopping, be prepared to use your credit cards or provide exact change OR be prepared to leave the “extra” 20 cents you might be due as change behind the store we shop at might not be able to make change.
Don’t get mad at the clerk behind the counter, it is not their fault.
It’s time to take the change we have in our drawers and piggy banks and do our part to get coins back into circulation.
These times definitely are delivering challenges that we never thought would be a reality
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