Martin Van Buren Day Heartbreak

The Martin Van Buren dollar coin was officially released on Nov. 13. Alert readers may recall that the acutal Van Buren Experiment will begin when we start spending MVB dollar coins (the JQ Adams coins were just a trial run). Needless to say, MVB Day was a special Thursday for all of us.

However, we did notice that Martin did not appear on the Mint's Direct Ship order page. The Direct Ship program is how we acquire our dollar coins. Somewhat -- but not needlessly -- alarmed, I phoned up my friends at the Mint, and inquired about Marty's absence from the Direct Ship page. I was told that Marty will be a part of the Direct Ship program, but maybe not until next year. Forsooth!

Next year isn't very far away, and I still have a few JQA Good Ones left, but this news is still unwelcome.

If you're in the Kinderhook, NY area, and are under 18, you can get your hands on a MVB Good One by attending the coin inauguration on Marty's birthday, Dec. 5. Lucky bastards.

Second Chances

I thought I had used my last Good One in the most pathetic of ways, dropping it in the vending machine. Those mechanical cashiers never give us any lip and happily take our coins, not generating anything interesting to post. However, oh joy of joys when I discovered a pocketful of the golden discs when dropping a pair of pants in the hamper!

Let the ire resume!

Spotted!

Spotted this on the whiteboard outside the bank in the local Stop & Shop today:

Maybe they knew one of the Van Buren boys would be stopping by?

It's coin madness

The Mint announced recently that it will be making some changes to the penny. Unfortunately, those changes do not include getting rid of the infernal thing. The redesigned penny will be released next year.
US Mint press release.

Soul Dog

Lunch at Soul Dog (a really good hot-dog place in Poughkeepsie, if you're not familiar).

• beef dog with Soul Sauce, red onion and kraut
• chicken sausage with chipotle sauce and caramelized onion
• order of Soul Fries
• Fizzy Lizzy tangerine soda (which I didn't like)

Total: $12 even.
Tender: A 20 and 2 Good Ones, plus a Good One in the tip jar.
Cashier reaction: Confusion ... enlightenment.
ACI: 0.1 had to point out that they were dollars.

However, on Sean's purchase before mine, she really missed it and was asking him for more money.

Spreading the word, educating the masses.

I'm also down to 8 Good Ones.

Return of the Half Dime?

A member of congress recently introduced a new bill that would replace the nickel with a new half-dime. While this is unlikely to see the light of day (this year at least), it is still of interest to those of us interested in changing US coinage.

But what does this have to do with dollar coins? It turns out that the half dime is a brother of the dollar coin, being one of the original US coin denominations. Also, like the new dollar coin, the new half-dime would reduce minting costs, due to less material being required. The suggested size of the new half-dime would be smaller than the current dime.

Would the adoption of a half dime be easier than that of the new dollar coins? Hard to say. From a heavy-pants perspective, half dimes would be much lighter than nickels, the bruisers of the coin world. A half-dime smaller than a dime would allow the diameter-to-value mapping to work better; silver coins' size would be representative of their value. This also means there is a chance that the new coin might be confused for another. Vending machines would need to change too.

No luck again

Once again, the 50/50 raffle at the club meeting. Same guy too.

Tender: 2 Good Ones
Response: "Jesus Christ, not these again!"
ACI: 0.7
Amount won: $0.00 as usual

The King

Value Meal, Kids Meal at the King of Burgers.

Total: $11.20
Tender: A 20, a Good One, and 2 thin dimes
Reaction: Absolutely none, A tenner back in change.
ACI: 0.0

Dollar Coin Circulates Blazingly Fast at Chinese Restaurant

Chicken with string bean and a Dr. Pepper.

Total: $7
Tender: A five and 2 Good Ones
Cashier Response: Didn't even blink
Anti-Coin Ire: 0.0

After paying, a friend of mine received one of my dollar coins as change. He then exchanged it for a Bad One (the mad fool!) with another friend, who then turned around and found Sean wanting to exchange it once more. This works out to a rate of about 100 transactions per hour for that one dollar coin. Unfortunately, only the first two were legit; the rest were propelled by like/dislike for the dollar coin.

Dirty Bad One

Found this on the Small Dollars site; I think this shall be the official poem of the Van Buren Experiment.

Paying at Soul Dog restaurant

A cookie, a can of cel-ray soda, and the sausage special.

Total: $7
Tender: 2 Good Ones and a twenty
Cashier Response: "These are considered dollars, right?"
Anti-Coin Ire: 0.1

It's spreading!

I received this IM mere moments ago:

Dude, you're like a virus. ******** paid partially in $ coins for trap last night.

It appears that we may be having some localized influence, or it's just a fluke.

Either way, Muahaha haha haha!

Paying at the Golf Course

Total: $14
Tender: A tenner and 4 Good Ones
Response: "Are you sure you want to get rid of these?"
Anti-Coin Ire: 0.0

The woman collecting the green fees was older, and the coins were particularly brilliant (new from the roll). I have found in general that older people seem to be more interested in new US coinage. My grandfather sent me a Sacagawea when they first came out. My great-grandfather put some of his retirement cash into coin proof sets. And when I worked in the movie industry, our elderly usher would come to my register daily to swap a few Bad Ones for the new state quarters. Is it that older people like the feeling of real hard currency? Perhaps it brings back memories of the past, when coins made up a larger percentage of pocket money. Or maybe, like crows, they're attracted to shiny things.

Vending Machines

While fleshy cashiers may frown at the sight of a dollar coin, many vending machines gladly accept them. The vending machine industry is one of the proponents of dollar coins, as coins are easier for the machines to deal with; more than half of machine service calls are due to fix nonfunctional bill acceptors. So adapting vending machines so that they accept dollar coins actually saves the operators money in the long run.

However, in some recent digging I found something interesting while reading the Presidential $1 Coin Act of 2005. Check out section 104:

...all entities that operate any business, including vending machines, on any premises owned by the United States ... shall take such action as may be appropriate to ensure that by the end of the 2-year period beginning on such date--

(A) any business operations conducted by any such agency, instrumentality, system, or entity that involve coins or currency will be fully capable of accepting and dispensing $1 coins in connection with such operations

Stamp and subway ticket machines have been a primary channel for the distribution of dollar coins, even before the Sacagawea. But section 104 seems to stipulate that any vending machine on the premises of a government agency needs the capability of dispensing dollar coins. That means snack machines, drink machines.... pay phones? arcade games?

This sounds good to me. I am unsure why -- a year after this was supposed to kick in -- the government hasn't done something to enforce this, like fining people, or declaring martial law.

Even without intervention though, I think inflation will save the day. Eventually a Coke is going to cost $3.75. People are will want to be able to pay with a five and get change, instead of trying to find 4 acceptable bad ones, or using a fistfull of quarters.

Making noise and busting birds

4 rounds of trap shooting at the aforementioned local club.
Total: $12
Tender: A tenner and 2 Good Ones
Response: "You going to pay me with those Euros?"
ACI: 0.2

Paying at the Pharmacy

Total: 16.99
Tender: sawbuck, fiver, and 2 Good Ones
Cashier Response: Confusion, sad face
Anti-Coin Ire: 0.3

Take me out to the ball game

11 inning marathon baseball game at the local minor league team stadium. Which the home team finally won!

3 Good Ones for cotton candy, response: "Cool, I love these!"
2 Good Ones for a carnival game, response: "Wow, these are shiny!" (Though these were proxied through my 5 year old)

Total: 5 Good Ones.
Anti-Coin Ire: 0.0.
Won in the game: 1 set of team postcards.

What are those?

At a local club meeting, where there is the common 50/50 raffle, purchased 2 tickets with 2 Good Ones. Response: "What are those? That's not even real money!". Accepted anyway.

Tender: 2 Good Ones
Anti-Coin ire: 0.7
Total won in raffle: $0.00

Quite a Coincidence

I was doing some research on my favorite US president, Teddy Roosevelt, and discoverd that he is the third cousin, twice removed of none other than Martin Van Buren! How about that. This only solidifies the fact that MVB was a good choice to name our experiment after.

No drama yet

So far things have been pretty uneventful for me. A few Good Ones accepted at the vending machine with no protest, one at the toll booth since I forgot my EZpass on the motorsickle, and one at the cafeteria without a blink.
I'm getting used to the additional baggage in my pocket. I don't typically like a bunch of change in my pockets, but the Good Ones don't seem so bad for some reason.
I do notice that I'm much more jingly lately.

Paying at the Post Office

Total: $2.00
Tender: 2 Good Ones
Cashier Response: "Ooh, yeah!"
Anti-Coin Ire: 0.0

The Coins Have Been Disbursed

Ok, 250 dollar coins have arrived from the Treasury, everyone is back in the US, and the coins have been distributed. 83 for Mike, 83 for Sean, and 84 for myself. None of the participants in the VBE really know how long it takes us to go through 83 single dollar bills ordinarily, but we assume one of us will spend-out quicker than the others. Personally, I only really use cash for restaurants, vending machines, tolls, and smalls tabs (<$10). So I should be set for a few months. But until I spend-out, I shan't keep any Bad Ones on my person. I've seeded my pocket with 4 Good Ones to start things off.

The Experiment

So, what's this experiment about?
In the most simple terms, we're eliminating the Bad Ones (dollar bills) and replacing them with Good Ones (dollar coins) in our daily lives. We ordered a quantity of coins directly from the US Mint and have split them up (though I think Chris got one extra, that sneaky bugger). We'll be using them as one would expect and reporting the results here. The rules are pretty straight forward:

1. Use a dollar coin wherever you would have used a dollar.
2. Use them in a "natural" way, don't give 8 Good Ones for an $8 charge.
3. Any Bad Ones received must not be reused.
4. Received Bad Ones should be swapped out for Good Ones ASAP.
5. Report on your experience.

At the end of this experiment, we should have a good read on what the general acceptance factor of the Good One is, and what it's like to live with them.

Why Van Buren?
Martin Van Buren was the 8th US President. He was the first to be born a US Citizen, and the first of non-British descent. In the financial realm, Van Buren initiated an independent federal treasury system.

On a more personal note, he was born in Kinderhook New York, which is right nearby. It also allows us to refer to ourselves as "The Van Buren Boys", which, among other things, is a reference to the street gang from the Seinfeld episode. The most compelling thing of all is, of course, his hair, takes guts to have a 'do like that.

Unfortunately, the Van Buren coins aren't available yet, so we've had to choke down our tears and learn to live with the John Quincy Adams Good Ones. He does still have mutton chops, but they pale in the face of the magnificence that is Marty.

The Coins Are Here

I picked up the box of coins from the post office today. As expected, it was a small, heavy box. Luckily, shipping was free with the Direct Ship program. I'll have to hang on to these until Mike and Sean return. Then the Experiment shall begin.

The Problem with Cash Money

Over the past year, we have discussed how to fix the US money system. Not monetary policy macroeconomic stuff... just cash money. There are several problems with the current system:

1. The Penny
currently necessary, but largely hated. Pennies tend to fall out of circulation, ending up in mason jars and storm drains. This requires The Mint to make more, at cost to the tax payer. Additionally, the cost of making a penny rises with materials cost (zinc and copper).

2. The Dollar Bill
often used, but not durable. Dollar use has increased over time due to inflation (where one dollar used to suffice, now you need two; that's double the wear). The dollar bill accounts for almost half of all currency production, and each bill only lasts about 21 months in circulation. Coins are much more durable than bills, able to last for decades.

3. US Bills
7 different notes, 1 shape and texture. US cash money is bad news for the blind population, as it is impossible to feel the difference between any of the bills. This can lead to shortchange scams against the blind and other problems.

Not being content with mere complaining, we have proposed solutions for each of these. For now, I will present the solution to #2: The Dollar Problem.

1. Introduce a Dollar Coin
Check.

2. Increase production of the $2 bill
Consumers will still need a convenient way to pay strippers. Making the Jeffersonian Note a commonly-used bill will effectively halve the demand for the $1. Additionally, this will reduce the heavy-pants problem that would occur if only $1 coins were used to make change; with sufficient $2 bills in circulation, customers should only ever get one dollar coin in their change, max.

3. Withdraw the $1 from circulation
Who needs it?

End result: commerce will continue without the dollar bill, and The Treasury will save a bunch of money. Using 2007 numbers, the Bureau or Engraving and Printing spends over a million dollars per day to manufacture dollar bills:

(notes per day) x (portion of notes that are dollars) x (cost of one note)
38,000,000 x .4547 x .062

We figure that somewhere around 30% of that production will switch to $2 bills, representing replacement of 60% of the $1 note's dollar value entering circulation. This will cost about 320k/day. The remainder of the dollar value will be made up using dollar coins. Comparing production cost between the $1 bill and the $1 coin is only effective if the cost per circulating month is compared; this is not possible as the current dollar coin does not have a known lifespan. But if we estimate that a $1 coin will last 2 decades -- or about 10x longer than a bill -- then the cost of minting the coin at 62 cents would result in the circulating cost per month being even between the two. Even at an unrealistic price of 62 cents, The Treasury would have a net savings of 30% per day, or about $80M per year. At current metals prices though, actual savings is likely to be north of $100M.

Let's do it.