Car sales aren’t the only things falling by nearly half in the present economic recession. January Mint production figures show the pace of coinage output has been almost halved from the full-year pace set in 2008.
Only 513 million coins were produced in the first month of 2009. If production continues at this pace for the full year, output would be about 6.2 billion coins, or down about 40 percent from last year’s 10.1 billion.
Naturally, one month does not make a trend, but these numbers indicate the economy is in serious trouble. Coinage demand generally moves up and down with the state of the economy. When times are good, production rises. When times are bad, production falls.
It isn’t a news bulletin now to say the economy is in trouble. Lehman’s failure in September, the near bankruptcy of the auto companies and the ongoing debacle on Wall Street have convinced Americans to hunker down and hope we all get through this.
Where was I last year?
Well, I was making the same point. Coin demand is a pretty good recessionary indicator. When it takes what seems like forever to get the new dates, there is a problem.
Last year I received a few e-mails about this contention. A few said it was all due to Coinstar, the firm that puts coin counting machines in grocery stores. That seems plausible, except the firm has been around too long and its machines are available in too many places for the effect to have kicked in only last year. Its impact occurred shortly after the turn of the 21st century and it prevented the demand for coins from exceeding that of the prior peak in the year 2000.
So there is a Coinstar effect, but that wasn’t, in my opinion, the variable at work in January of last year.
Some took me to task for saying the economy was in a recession last year before the official pronouncement of such an economic state. I have duly noted them as well as the recent news that we have been in recession since December of 2007, which was proclaimed almost a year after the fact. Coins were telling the tale before the economics profession caught up with them.
Then there is the confirming evidence of my own eyes. I was at an Iola convenience store a couple of days ago waiting to pay for my purchase. The guy ahead of me looked to be a year or two out of high school. He was buying cigarettes and some snacks. His bill was just over $10.
Out came a few $1 bills and then he started stacking quarters on the counter, multiple piles of them. I couldn’t quite see them all.
The clerk got to $10 and asked for the rest.
This episode, more than anything, is a sign of the times. Times are hard and demand for new coins from the Mint is being depressed by people all over the country counting out their quarters on service counters all over the country.
The worst of this recession will come when buyers like this run out of quarters to count. I will be watching Mint production figures to see when they begin to turn up and offer hope to us all.