Today, November 29, 2012 at 2:00 PM, the House Subcommittee on Domestic Monetary Policy and Technology will hold a hearing entitled “The Future of Money: Dollars and Sense”.
The hearing includes prepared statements and question & answer sessions from six different witnesses on two different panels. The Acting Director of the United States Mint Richard Peterson will be one of the witnesses at the hearing and has already provided a written statement. (You can view the complete witness list and copies of their statements here.)
I will have coverage of the overall hearing after it occurs, for now I wanted to highlight some specific points of interest from the Acting Mint Director’s written statement.
Alternative Coinage Materials
Under the provisions of the “Coinage Modernization, Oversight, and Continuity Act of 2010”, the Mint established and staffed a research and development laboratory at Philadelphia to explore possible metallic alternatives for coinage. Peterson’s statement indicates that the Mint has “conducted two sets of trial strikes on a variety of metallic compositions and evaluated them for attributes such as hardness, ductility, corrosion and wear resistance, electromagnetic signature, availability of raw materials, and cost.”
There is no further information provided about the results, which will be provided to Congress in the first biennial report due in December.
Circulating Coin Production
For the 2012 fiscal year, circulating coin production was up 24% to 9.2 billion units. Peterson cites a reduction in non-metal costs of $58.8 million achieved by improving capacity utilization and reducing expenses.
The cost to manufacture and distribute the penny and nickel once again exceeded their face values.
Overall seigniorage was positive in fiscal year 2012, although a specific figure is not provided. Last year, seigniorage was $348.8 million with $382.8 million contributed by the shipment of $1 coins.
Lower sales volumes and pricing resulted in 57% decrease in net income from the bullion program.
The Mint held roundtable discussions with Authorized Purchasers in November 2011 and October 2012. These meetings are held to “identify market trends and bullion demand trends”.
I believe at the 2011 meeting, the Authorized Purchasers had recommended that the offering of platinum bullion coins in one ounce size should be resumed. However, this did not occur in 2012.
There is no indication of any of the specific discussions at the 2012 meeting.
Following exceptional results for the numismatic program in 2011, “demand weakened across the board” for the 2012 fiscal year. Peterson cited moderating silver prices, only one American Eagle Silver Proof Coin release, and a later than usual sales date for recurring sets.
For the current fiscal year, revenue decreased by approximately $241 million. Compared to last year, this would make for a decrease of about 33%.
From Peterson’s statement: “We are developing a comprehensive marketing strategy to increase the numismatic customer base and to incorporate new technologies and products.”