Did you look at the surprisingly low March coin production figures in the Page 1 news story?
Monthly U.S. Mint production reports aren’t ordinarily front-page news. But then, this is no ordinary year. As fast as the Federal Reserve System and the U.S. Treasury are trying to stuff trillions of dollars into the banking system to prevent its collapse, at the more human level of the retail customer, the Fed can hardly seem to get any coins into circulation at all through the banks.
Coins are at the forefront of the economy. The more retail business transactions there are, the greater the likelihood change will be needed. The fewer transactions there are, the less likely change will be needed. Coin production follows retail demand both up and down. This year the demand has been down, really down.
Add in some excess supplies of 2008-dated coins in the system that the armored car companies are trying to get rid of and the whammy is doubled. The Mint has always tried to calibrate its production level with forecast coin demand. The problem is, the economy took an unexpectedly strong dive after the September 2008 failure of Lehman Brothers and that pretty well busted the coin demand forecast.
Now you know why retailers keep electronic inventory records to feed fluctuations in demand back to their suppliers. Coin demand feedback isn’t on such a sophisticated level. It may take some additional months for the Mint to get numbers that are accurate enough to recalibrate its production.
That means we might have more surprisingly low mintage figures. The Philadelphia Puerto Rico quarter has already raised eyebrows at just over 53 million pieces. Will the Guam production numbers come in significantly lower?
Well, with zero coins minted in Denver in March and only 200,000 minted in Philadelphia during the month, the odds are increasing that the mintage totals for Guam will take another large step lower.
What does that mean? Thirty million or 40 million coins from one of the mints, or are we really talking huge hits?
What if the Guam Philadelphia or Denver quarter mintage came in at 16 million? Would the whole hobby go crazy as it is doing with the Birthplace Lincoln cent?
A mintage at that level would only have a face value of $4 million. It wouldn’t take much for the online eBay posse to saddle up and drive that herd of coins into the green pastures of far higher prices.
Where exactly would that market phenomenon kick in exactly? Perhaps 16 million is too high to excite the hobby. Perhaps it is too low and 24 million or 32 million would be the trigger point. After all, that 53 million Philadelphia Puerto Rico quarters has gotten people I know looking for a few rolls already.
But after Guam, there are three more quarter designs to come this year. Where is the upward turning point for mintages below which the economy begins to be starved for coins? Could mintages keep falling all this year before it is reached?
Might production be halted for an entire year as was the case during the Depression? Stay tuned.