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On Air Staff and WPM Interns
Mon January 9, 2012
People Want More Coins, That's A Good Sign For The Economy
All the instability in the global economy this year has been good for the United States Mint. People in search of a safe place to put their money have been buying gold and silver coins in record numbers.
"Precious metal coins were up $800 million dollars last year and that's approximately thirty some percent," says Richard Peterson, deputy director of the Mint.
According the the Mint's annual report, they sold 45.2 million ounces of gold and silver coins in 2011.
You can also find what looks like good news for the U.S. economy in the Mint's report — demand for quarter, dimes, nickels, and pennies was up this year. During the financial crisis, demand had plunged.
"People went into their piggy banks and their coin jars and spent those coins, " says Peterson. "...Those coins flowed back into the banks and then ultimately back to Federal Reserve. The Federal Reserve vaults started filling up and they turned off the spigot of new coin production from the United States Mint."
In 2011, coin shipments increased by 37 percent, a sign that people are no longer tapping their piggy banks for extra cash.
For it's entire history, the Mint has managed to make a profit, minting coins for general use. That part of its' operations has always paid for itself. But it is about to take a big hit in connection with a coin you probably don't have in your pocket, the dollar coin.
As NPR has reported, over 1 billion dollar coins had piled up in vaults as the result of a law that required the Mint to make dollar coins honoring all the presidents. The Treasury Department last month basically ordered a halt to the program.
The Treasury estimates the change will save $50 million a year overall. But fon the Mint's books the dollar coin has been a money maker. It costs the Mint just 18 cents to make a dollar coin, and it sells each coin for $1.
Despite the change, Peterson expects the Mint will break even or better next year making coins for everyday use.
"We believe we will be in the black next year and we do have a reserve available if needed," Peterson says.
Any profits the Mint makes from those coins in your pocket, go to pay down the national debt.