Where Have All the Coins Gone?

William J. Luther“If you put the federal government in charge of the Sahara Desert,” the economistMilton Friedman once quipped, “in five years there’d be a shortage of sand.” The U.S. Mint, to its credit, had a much longer run.The Federal Reserve, which purchases coins from the Mint and distributes them to depository institutions,announced it would begin rationing coins “based on historical order volume by coin denomination” last month as its coin inventory had been “reduced to below normal levels.” The Fed also called on the Mint to increase the supply. Until the shortage is resolved, however,retailers unable to acquire enough coins from banks are left requesting customers pay with a  card or use exact change.No doubt many find the idea of a  coin shortage perplexing. Coins are not consumed; they get passed along from one person to another. In the US, the average coin circulates foraround 30  years. How, then, can there suddenly be a  shortage of coins? Where have they all gone?Each year, some coins are lost, discarded, or worn beyond use. They get thrown in a  well with a wish; or, dropped down a drain by mistake. To offset the outflow, and keep up with secular growth in demand, the Mint must produce new coins. It issued nearly12 billion circulating coins in 2019.Figure 1. Cumulative Mintages, BillionsSource: This graph is based on data collected by the author from multiple data tables on Coin ​News​.net and USMint​.gov.So far, the Mint has ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs