Did you know that the management of the U.S. Mint, which hammers out the coins that pile up on our dressers and fill jars and boxes on our shelves, is proposing the establishment of a Strategic Coin Reserve?
I didn't until I read about it in "Coin World," a weekly numismatic newspaper.
The Strategic Coin Reserve would be made up of coins struck beyond the amount needed to meet current Federal Reserve orders. The primary benefit, according to Andy Brunhart, deputy director of the Mint, is "to sustain commerce by issuing coins under any circumstances." These circumstances would be the breakdown of the Mint's main facilities in Denver and Philadelphia for a considerable period of time.
Is this likely to occur? Have Mint officials been warned of expected terrorist attacks on the coin presses? Or are they looking out for a number of their employees who might otherwise become superfluous.
The Mint makes coins by stamping designs on metal disks called planchets. However, the finished products, which in some denominations cost more than face value to produce, don't become usable until they are "monetized" by the Federal Reserve Bank, which distributes the coins to commercial banks.
The Mint's problem is that the Fed already has all the coins it needs for this year because Americans aren't spending as much. With no market for its products, the Mint either has to stop stamping metal disks or create a Strategic Coin Reserve. And, by the way, the government (spelled t-a-x-p-a-y-e-r-s) would be paying for off-site storage of these strategic coins because there isn't room at the Mint.
Brunhart told "Coin World" that the reserve represents "prudent planning and good management" and "the type of thinking the taxpayer expects."
If this is prudent planning and good management, some other American manufacturers should think about creating strategic reserves.
General Motors, for example, could keep production lines running by producing more vehicles than it can sell in 2009, shrink-wrapping them and storing them somewhere in case their production lines break down and customers clamor for cars.
Developers could keep crews busy by building homes that can't be sold and office complexes that can't be leased, and covering them with blue plastic until they're needed after a windstorm or a wildfire.
It has been reported for some time by all the news media that people aren't spending as much money because the economy is down and unemployment is up. Alert officials at the Mint and the Fed might have picked up on these news reports and anticipated a reduced need for coin production. Of course, that would have suggested reduced work hours or layoffs.
In fact, many of the coins that penny-pinchers are spending are coming off of dresser tops and out of jars and boxes. Coinstar Inc., a self-service coin sorting company, reported a 42.3 percent increase in its revenue for the first quarter of 2009 as compared with the same period in 2008. It seems that we already have a Strategic Coin Reserve right in our homes.
Brunhart says, "Admittedly, a reserve would help the Mint achieve a more steady state in its operations and allow production to remain at a steady pace during periods of low coin demand. That's a secondary benefit."
Secondary benefit? If you buy that argument, I'll sell you a strategic bridge in Hopedale (which will have only one lane open next week) for 10 of the new Lincoln Birthplace cents on the new President William Henry Harrison dollar.
