Author Topic: Ireland to scrap 1 and 2 cent coins  (Read 3303 times)

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Online Figleaf

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Re: Ireland to scrap 1 and 2 cent coins
« Reply #15 on: October 21, 2015, 11:23:32 AM »
The distributing agencies do not demand fresh coins and the central Bank, who consolidates the demand and places order with the mint, does not place order for some denominations.

Almost, but not quite. Research found that production programs correlate with stocks, rather than demand. Mints produce for an estimated future demand, which is correlated with the economic growth cycle. If the estimate turns out too low, they are in trouble. If it is too high, coins pile up in stock. Therefore, there is a tendency to estimate too high. If the estimate is made by the government, rather than the mint it gets worse, because estimates will be adjusted up for political reasons. This leads to chronically increasing stocks, that get so bad that production must be halted in order not to exceed stocking capacity.

As long as there exists a coin and a note for the same denomination, note is always preferred.

Often, but not always. The standard example is pre-euro Germany, where a 5 Mark note and a 5 Mark coin circulated at the same time. Also, think of halves and dollars in Las Vegas and railroad ticketing machines.

Preference for coins, notes and denominations look like intellectual laziness to me. "I always had a paper dollar, so I'll use any excuse for rejecting round dollars". "There were always cent coins around, so I want cent coins". "There was always a quarter so I don't want a 20 cent coin". The budgetary impact has no effect on people's thinking. Consider that the US military has abolished cent coins and nobody is whining. This is the sort of (minor) issue where a decisive statesman would make a real difference. Lee Kuan Yew wouldn't have asked anyone. He would have got it done in seconds, making significant savings at no cost.

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