Presidential Dollars might not increase dollar coin use

Here's an article that includes quotes from a Federal Reserve official:

http://www.easybourse.com/Website/dy...26394&lang=fra
&NewsRubrique=2

We know that putting portraits of dead presidents on the dollar coin
will not noticeably increase its use in everyday commerce. Only
eliminating the dollar bill will do so.

But this official repeats one of the great myths of modern times:

"Consumers seem to prefer to carry dollar bills, rather than weigh
down their pockets with dollar coins"

This is wrong on two counts.

One, the public was never given a chance to obtain or use dollar coins
and compare their convenience to dollar bills. Banks, who mostly
refused to supply the coins to the public, made sure of that.

Second, dollar coins don't "weigh down" your pockets. In fact, it has
been shown that eliminating the penny and dollar bill would actually
*decrease* the weight of coins in your pocket.

But there's an obvious truth in the testimony:

"If the Presidential $1 Coin Program does not stimulate substantial
transactional demand for dollar coins, the requirement that the Mint
nonetheless produce Sacagawea dollars would result in costs to the
taxpayer without any offsetting benefits"

I think most of us agree that the requirement to produce Sacajawea coins
in addition to the deceased presidents is counterproductive and silly.

Paul

--
Paul Anderson
OpenVMS Engineering
Hewlett-Packard Company

You are correct about some of the comments being stupid/incorrect.

The 2/3 1/3 ratio was insisted upon by Senator Byron Dorgan.

The HR being discussed WILL end one dollar bill production and re-circulation as well as
the one cent coin.

The testimony is online, but it is the pre-prepared speech-like testimony, not the Q and A
which I hope also occurred.


http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.r.05818:


http://financialservices.house.gov/h...il&hearing=492

--
"""Remove "zorch" from address (2 places) to reply.
http://www.sirius.com/


"Paul Anderson" wrote in message
news
Here's an article that includes quotes from a Federal Reserve official:

http://www.easybourse.com/Website/dy...26394&lang=fra
&NewsRubrique=2

We know that putting portraits of dead presidents on the dollar coin
will not noticeably increase its use in everyday commerce. Only
eliminating the dollar bill will do so.

But this official repeats one of the great myths of modern times:

"Consumers seem to prefer to carry dollar bills, rather than weigh
down their pockets with dollar coins"

This is wrong on two counts.

One, the public was never given a chance to obtain or use dollar coins
and compare their convenience to dollar bills. Banks, who mostly
refused to supply the coins to the public, made sure of that.

Second, dollar coins don't "weigh down" your pockets. In fact, it has
been shown that eliminating the penny and dollar bill would actually
*decrease* the weight of coins in your pocket.

But there's an obvious truth in the testimony:

"If the Presidential $1 Coin Program does not stimulate substantial
transactional demand for dollar coins, the requirement that the Mint
nonetheless produce Sacagawea dollars would result in costs to the
taxpayer without any offsetting benefits"

I think most of us agree that the requirement to produce Sacajawea coins
in addition to the deceased presidents is counterproductive and silly.

Paul

--
Paul Anderson
OpenVMS Engineering
Hewlett-Packard Company

On Thu, 20 Jul 2006 11:45:39 -0400, Paul Anderson
wrote:


Second, dollar coins don't "weigh down" your pockets. In fact, it has
been shown that eliminating the penny and dollar bill would actually
*decrease* the weight of coins in your pocket.

Purchase any item less than $1 with a $5 bill and receive your change
in four $1 bills and change, or four golden dollar coins and change.
Which weighs more? The change with the four dollar coins will ALWAYS
weigh more than the change with the paper, regardless of the use or
disuse of cents.

Look at it this way - In regards to the receipt of cents in change for
a random purchase there are five scenarios possible with each
purchase, each with equal probabilty. They a

0 cent - weight - 0 grams
1 cent - weight - 2.5 grams
2 cents - weight - 5.0 grams
3 cents - weight - 7.5 grams
4 cents - weight - 10 grams

The average of these weights, that is, the average weight of current
cents received per transaction in change, equals 25 grams divided by
5, or five grams per transaction. Now lets assume that we are
eliminating the cent. Change of one or two 'cents' would be rounded
down to nothing, saving an average of 3.75 grams, while rounding up
from 3 or 4 'cents' change would save 3.75 grams of weight by trading
an average of 8.75 grams for a 5 gram nickel.

20% chance of no cents in change
40% chance of 3.75 grams saved due to elimination of 1 to 2 cents
40% chance of 3.75 grams saved due to exchange of 3 or 4 cents for 1
nickel

This gives an average saving of 3 grams per transaction.

Of course, at that point it becomes more complicated, since there are
two choices for receiving nickels in change. They a

0 nickle - weight - 0 grams
1 nickle - weight - 5 grams

This gives an average weight of 2.5 grams in nickels per transaction
before the elimination of the cent. After the cent is eliminated, the
50% chance of receiving one nickel in changed is combined with the 40%
chance of adding a second nickel to the change. This gives a 20%
chance of having two nickels, which of course would be given as one
dime. This saves an additional 7.6 grams in the exchange, subtracting
the weight of the dime from that of two nickels.

So, our final figures a

20% chance of no cents in change - no savings
40% chance of 3.75 grams saved due to elimination of 1 to 2 cents
20% chance of 3.75 grams saved due to exchange of 3 or 4 cents for 1
nickel
20% chance of 11.35 grams saved due to exchange of 3 or 4 cents and
one nickel for one dime.

This gives a total average saving in weight per random total purchase
of 4.52 grams, or about 10% less than a single nickel.

Now, lets compute the weight GAIN by the forced use of dollar coins in
the same way, on a random purchase tendered paid for with banknotes
available with values in increments of $5

0 GD's - weight - 0 grams
1 GD's - weight - 8 grams
2 GD's - weight - 16 grams
3 GD's - weight - 24 grams
4 GD's - weight - 32 grams

These are also of equal probability, with an average weight gain of 16
grams. When you combine this with the average savings of 4.52 grams
for the elimination of the cent, you end up with a net INCREASE of
11.48 grams per transaction.


Reclining Buddha

The Original Couch Potato!

Reclining Buddha wrote:
On Thu, 20 Jul 2006 11:45:39 -0400, Paul Anderson
wrote:


Second, dollar coins don't "weigh down" your pockets. In fact, it has
been shown that eliminating the penny and dollar bill would actually
*decrease* the weight of coins in your pocket.

This is just a sample size of three, but the last few times I visited
Canada it always seemed like I had a lot more weight in my pocket from
the Loonies and Twonies than I ever seem to carry in the U.S.

Wow. That must have taken you some time to compute and type and all based on
misunderstanding what he was saying.

The statement about decreasing the weight of coins in your pocket meant only that: the
weight of coins in your pocket on average. NOT the weight of coins given in change for
transactions.

One (but not the only) reason is that many people carry around too many quarters since
they need them to use in vending machines (and they either cannot get dollar coins or do
not know that the machines will accept them).

Since Paul said "it has been shown", why not look up the information he was referring to,
or ask him for that info rather than computing your own weights based upon a situation he
was not talking about?

This has all been discussed and posted about multiple times over the last 10 years.

-Fred Shecter

--
"""Remove "zorch" from address (2 places) to reply.
http://www.sirius.com/


Reclining Buddha wrote in message ...
On Thu, 20 Jul 2006 11:45:39 -0400, Paul Anderson
wrote:


Second, dollar coins don't "weigh down" your pockets. In fact, it has
been shown that eliminating the penny and dollar bill would actually
*decrease* the weight of coins in your pocket.

Purchase any item less than $1 with a $5 bill and receive your change
in four $1 bills and change, or four golden dollar coins and change.
Which weighs more? The change with the four dollar coins will ALWAYS
weigh more than the change with the paper, regardless of the use or
disuse of cents.

Look at it this way - In regards to the receipt of cents in change for
a random purchase there are five scenarios possible with each
purchase, each with equal probabilty. They a

0 cent - weight - 0 grams
1 cent - weight - 2.5 grams
2 cents - weight - 5.0 grams
3 cents - weight - 7.5 grams
4 cents - weight - 10 grams

The average of these weights, that is, the average weight of current
cents received per transaction in change, equals 25 grams divided by
5, or five grams per transaction. Now lets assume that we are
eliminating the cent. Change of one or two 'cents' would be rounded
down to nothing, saving an average of 3.75 grams, while rounding up
from 3 or 4 'cents' change would save 3.75 grams of weight by trading
an average of 8.75 grams for a 5 gram nickel.

20% chance of no cents in change
40% chance of 3.75 grams saved due to elimination of 1 to 2 cents
40% chance of 3.75 grams saved due to exchange of 3 or 4 cents for 1
nickel

This gives an average saving of 3 grams per transaction.

Of course, at that point it becomes more complicated, since there are
two choices for receiving nickels in change. They a

0 nickle - weight - 0 grams
1 nickle - weight - 5 grams

This gives an average weight of 2.5 grams in nickels per transaction
before the elimination of the cent. After the cent is eliminated, the
50% chance of receiving one nickel in changed is combined with the 40%
chance of adding a second nickel to the change. This gives a 20%
chance of having two nickels, which of course would be given as one
dime. This saves an additional 7.6 grams in the exchange, subtracting
the weight of the dime from that of two nickels.

So, our final figures a

20% chance of no cents in change - no savings
40% chance of 3.75 grams saved due to elimination of 1 to 2 cents
20% chance of 3.75 grams saved due to exchange of 3 or 4 cents for 1
nickel
20% chance of 11.35 grams saved due to exchange of 3 or 4 cents and
one nickel for one dime.

This gives a total average saving in weight per random total purchase
of 4.52 grams, or about 10% less than a single nickel.

Now, lets compute the weight GAIN by the forced use of dollar coins in
the same way, on a random purchase tendered paid for with banknotes
available with values in increments of $5

0 GD's - weight - 0 grams
1 GD's - weight - 8 grams
2 GD's - weight - 16 grams
3 GD's - weight - 24 grams
4 GD's - weight - 32 grams

These are also of equal probability, with an average weight gain of 16
grams. When you combine this with the average savings of 4.52 grams
for the elimination of the cent, you end up with a net INCREASE of
11.48 grams per transaction.


Reclining Buddha

The Original Couch Potato!

In article ,
Reclining Buddha wrote:

These are also of equal probability, with an average weight gain of
16 grams. When you combine this with the average savings of 4.52
grams for the elimination of the cent, you end up with a net INCREASE
of 11.48 grams per transaction.

I didn't examine your calculations closely, but I will accept what you
are saying and believe it is correct.

The reason you'll have lighter pockets with the elimination of the penny
and dollar bill is also due to a change in behavior. You will be more
likely to spend your change instead of presenting only bills and always
accumulating coins during the day. This is why US citizens in Canada
wind up with lots more change in their pocket than Canadian citizens do.
Canadians spend more of their change, while due to the relative
worthlessness of US coins, Americans tend to get change but not spend it.

This premise was presented by the late Jim Benfield of the Coin
Coalition. Unfortunately, the Coin Coalition pages are no more, but you
can get to the page about the weight reduction at the Wayback Machine:

http://web.archive.org/web/200112112...tion.org/techn
ical.htm#XVI

Paul

--
Paul Anderson
OpenVMS Engineering
Hewlett-Packard Company

On 21 Jul "reality" wrote:

This is just a sample size of three, but the last few times I visited
Canada it always seemed like I had a lot more weight in my pocket from
the Loonies and Twonies than I ever seem to carry in the U.S.

Sure, the US does not use the big copper slugs,
but you should never have more than two Twonies
or one Loonie and one Twonie in your pocket at
any time.
That is because you are supposed to follow
the Loonie suggestions of the new goldie Twonie
monies and carry a cute little coin purse, and have
one Loonie ready for purchases less than a Loonie,
have a Twonie ready for purchases between a Loonie
and a Twonie, have both a Loonie and a Twonie
ready for a purchase between a Loonie-Twonie and
two Twonies, and have two Twonies ready
for purchases between a Loonie-Twonie and two
Twonies, and have a five dollar bill ready for
purchases between Two Twonies and five dollars.

But if you make a purchase between one Loonie
and one Twonies and two Twonies, and you only have
three Loonies, and no small change, you will have to
use a five dollar bill, and in this case you will get back
one Loonie and some small change, making four
Loonies in your pocket.

If this happened to me, it would be 5 Loonies,
the 4 in my pocket and me, and I would up and
move to the USA.

Joe Fischer

Paul Anderson wrote:
Here's an article that includes quotes from a Federal Reserve official:

http://www.easybourse.com/Website/dy...26394&lang=fra
&NewsRubrique=2

We know that putting portraits of dead presidents on the dollar coin
will not noticeably increase its use in everyday commerce. Only
eliminating the dollar bill will do so.

But this official repeats one of the great myths of modern times:

"Consumers seem to prefer to carry dollar bills, rather than weigh
down their pockets with dollar coins"

This is wrong on two counts.

One, the public was never given a chance to obtain or use dollar coins
and compare their convenience to dollar bills. Banks, who mostly
refused to supply the coins to the public, made sure of that.

Second, dollar coins don't "weigh down" your pockets. In fact, it has
been shown that eliminating the penny and dollar bill would actually
*decrease* the weight of coins in your pocket.


Have you visited Canada, where there are $2 and $1 coins? It was
annoying to have pockets filled with $20 worth of dollar coins. At this
moment I have 8 dollar bills in my pockets and zero pennies.

Please provide the citation from where you have obtained these
so-called facts.

So give it a try before you go and speak for me.

Andy

Wow, for someone who hates coins so much, I wonder why you waste so much time on a coin
collecting newsgroup?

Are there any other newsgroups you frequent where you can **** in other people's corn
flakes?

What's life like for a bitter old man? Do you yell at children if their baseball or
Frisbee dares to fall on your lawn?

What other coins do you hate? Kennedy Half Dollars? Were Franklins OK, and only Kennedy's
"evil"?

Please provide a commentary on every US coin ever produced for circulation and why you
think it was good or bad. Each coin commentary should be at least a paragraph to express
your complete feelings. Feel free to go on for dozens of paragraphs if necessary.

-Fred Shecter

--
"""Remove "zorch" from address (2 places) to reply.
http://www.sirius.com/


"Joe Fischer" wrote in message
...
On 21 Jul "reality" wrote:

This is just a sample size of three, but the last few times I visited
Canada it always seemed like I had a lot more weight in my pocket from
the Loonies and Twonies than I ever seem to carry in the U.S.

Sure, the US does not use the big copper slugs,
but you should never have more than two Twonies
or one Loonie and one Twonie in your pocket at
any time.
That is because you are supposed to follow
the Loonie suggestions of the new goldie Twonie
monies and carry a cute little coin purse, and have
one Loonie ready for purchases less than a Loonie,
have a Twonie ready for purchases between a Loonie
and a Twonie, have both a Loonie and a Twonie
ready for a purchase between a Loonie-Twonie and
two Twonies, and have two Twonies ready
for purchases between a Loonie-Twonie and two
Twonies, and have a five dollar bill ready for
purchases between Two Twonies and five dollars.

But if you make a purchase between one Loonie
and one Twonies and two Twonies, and you only have
three Loonies, and no small change, you will have to
use a five dollar bill, and in this case you will get back
one Loonie and some small change, making four
Loonies in your pocket.

If this happened to me, it would be 5 Loonies,
the 4 in my pocket and me, and I would up and
move to the USA.

Joe Fischer

In article .com,
wrote:

Have you visited Canada, where there are $2 and $1 coins? It was
annoying to have pockets filled with $20 worth of dollar coins. At
this moment I have 8 dollar bills in my pockets and zero pennies.

I have visited Canada a number of times. I was in Vancouver the day the
$2 coin was introduced. I was amazed that, on the very first day, the
bank had them and every place I went to buy something had lots of $2
coins in the drawer, and they used them! No questions, no whining.

I loved being able to pay for lunch and other small items without having
to get out my wallet and fiddle with bills.

Please explain why you would have twenty one-dollar coins in your
pocket, especially since you would only get a maximum of one in change
with every purchase. If you spent them as you went along, you wouldn't
have so many.

And you have eight dollar bills in your wallet now? I bet you wouldn't
notice eight dollar coins in your pocket. Really, they're not so heavy.

If you are from the US and present a bill for every purchase and
accumulate all the change you get back during the day, then yes, your
pockets might get heavy. Do you live in Canada or were you just
visiting?

Please provide the citation from where you have obtained these
so-called facts.

What so-called facts? The fact that banks did not stock dollar coins
even though the public asked for them? Or the premise that eliminating
pennies and dollar bills would decrease the weight of coins in your
pocket?

Look at

http://web.archive.org/web/200112112...tion.org/techn
ical.htm#XVI

This is an archive of one of the Coin Coalition pages which explains why
this is so.

So give it a try before you go and speak for me.

I have given it a try and liked it. I wasn't speaking for you
specifically, but believe most people would find dollar coins more
convenient than dollar bills, even if they don't _think_ they would.

Paul

--
Paul Anderson
OpenVMS Engineering
Hewlett-Packard Company