Author Topic: The effect of the credit crisis on minting  (Read 1297 times)

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Offline Figleaf

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The effect of the credit crisis on minting
« on: May 01, 2009, 02:08:04 PM »
See this article in numismaster.

It makes sense. Lower economic activity plus mints not planning ahead results in overproduction. That, in turn, would result in sharply lower mintage figures. I can't believe that this will only happen in the US. At the very least, the UK must be affected, as the Royal Mint was under pressure to produce a "profit" (the concept of profit is somewhat funny if you have a monopoly and someone else sets the price of your product, especially if the same someone else urges you to make a profit). I expect other mints will suffer also, though. I never met a mint official who told me minting was sensitive to the economic growth cycle. They'd rather look at stocks.

So will the coins of 2009 be relatively scarce? I don't think so. I think that, like US mints, they are producing at full steam and stocking. I expect an economic recovery in the first half of 2010. Mint will start production planning in 2009 and I bet they'll plan a mintage that will turn out to be far too low, as they will have large stocks of 2009 on hand and they will mindlessly (and implicitly) assume no recovery. In other words, 2010 may turn out to be the year of low mintages.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline chrisild

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Re: The effect of the credit crisis on minting
« Reply #1 on: May 01, 2009, 05:38:10 PM »
The idea of a mint being profitable makes some sense to me. After all, many "major" mints do not only produce coins for the domestic market but coins for other countries too, and also medals.

Also, I remember that when Swissmint suggested making the 10 rp/ct coin the smallest denomination in Switzerland, partly for reasons of "profitability", there was quite a bit of discussion about this. At the end, only the smallest coin (0.01 which hardly anybody used anyway) was given up, but the fiver stayed. The Swiss government decided that Swissmint had to find other ways of being profitable ...

By the way, I don't think that euro mints are worse off now than they were in the second half of the 90s. In Germany for example the production of DM/Pf circulation coins ended in late 1996; euro production began in mid-1998. Besides (and allow me to be a tad cynical here) wouldn't the London Olympics mega-program keep the Royal Mint from being idle? :)

Christian