A Circulation Issue?

in #leofinance3 months ago


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I recently saw an interesting communication from the United States Mint about their continued issue with the coin supply in the country. I found a number of comments they made interesting as they no longer call it a supply issue as they believe it is a circulation issue. How to distinguish the difference has me a bit confused but also demonstrates key fundamentals that impact my investment allocation approach across different asset classes.

I recall seeing retailers and banks with notices early during the pandemic calling for exact change or only using plastic cards to avoid the coin shortage. At that time, it was more of an issue of minting coins due to shortage of resources and people to issue them. The supply chain issue had disrupted many industries to this day but it feels surprising to see the Mint in this issue. However, it could be an unintended consequence of the amount of fiat printing done the prior two years. Not surprisingly, this is not mentioned at all despite the alarming percentage of fiat issued as a percentage of total money supply out there (saw something like 75%)!

The other comment made by the United States Mint is the increasing amount of electronic transactions taking place. This is what leads them to comment on being a circulation issue as electronic transactions will not allow the coins to circulate efficiently. For me I would agree to this but also knowing that even these transactions are inefficient given the delay in settlements. That is where crypto and blockchain shines and continues to show the world where we should head as an innovative solution for the financial system and global economy. It always is great to see these indicators in action to validate our own investment thesis for the long term.

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Form what I learned, I was told the more money circulate, the more it seems to reduce the value of the money though

Posted Using LeoFinance Beta

I hang on to all my change now, I think it's better money than our dollars because the treasury makes them and not the fed. (I think that's how it works)

Posted Using LeoFinance Beta

Same here! The little I get goes to old piggy banks!


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