4 ms·

The point of the mint is making money, not making money.

refurb 8y ago
Yeah, the headline seems dumb. If the mint creates a $100 bill for $1.50, did they make $98.50? No. The purpose of the mint is to maintain the US currency. It's a cost center, not a profit center.
- noer 8y ago
  Unless I'm reading it wrong, they do think of it that way (on coins at least): >Fortunately, dimes and quarters are cheaper to make, costing less than their monetary value. So the Mint makes up the losses incurred on pennies and nickels with its 10- and 25-cent coins, and last year reported making $391.5 million in seigniorage. Also, paper money isn't produced by the Mint, it's produced by the Bureau of Engraving & Printing
  - mortenjorck 8y ago
    The author of the article thinks of it that way, but I have to think the article is written from a misguided premise. The Mint may publish those numbers in the form of a balance sheet as a novelty, but as far as I understand, they don’t govern the money supply any more than the Bureau of Engraving and Printing does. Their scope is to strike currency, and I would think the exact monetary value of it is immaterial to that mission.
    - slededit 8y ago
      Seigniorage used to be an important revenue generator for governments. This has largely subsided with the transition to bank notes which don't operate under the same market dynamics. But the historical inertia is still there.
- thebooglebooski 8y ago
  "Making" and "creating" are pretty ambiguous here. The mint literally creates physical money (coins). But in the end, the government actually does generate revenue, that gets calculated into a profit or loss for the country: https://www.investopedia.com/terms/s/seigniorage.asp https://www.investopedia.com/terms/s/seigniorage.asp $100 bills DO generate profit. Pennies generate a loss. If you look at all of the currency in aggregate, it generates positive revenue for the country.
  - tylerhou 8y ago
    $100 bills do generate profit for the person printing them, but in aggregate they inflate the currency as a whole. This inflation, in theory, cancels out the wealth "created." So when people print money, they aren't generating any wealth - it's just a wealth transfer from people who have paper money to the people who print it.
  - andyzweb 8y ago
    $100 bills generate close to 0 profit for the United States Treasury as they are sold to the Federal Reserve Banks at manufacturing cost. However coins are sold by the United States Treasury to the Federal Reserve Banks at face value and can generate a profit/loss based on the difference between the face value and the cost of manufacturing.
- PKop 8y ago
  For some acceptable price yes. This isn't unbounded though. At some point they most certainly would stop producing a unit of currency if it cost way too much vs it's value.
- pishpash 8y ago
  Yes they did make $98.50, and it is profit. The job of the Mint (and the Bureau of Engraving & Printing) is to use the monopoly of seignorage to make money out of thin air. As much as there is demand for coins and bills, they will sell into the market. The job of maintaining (the value of) the US currency is in the hands of the Federal Reserve.
pdq 8y ago
Technically you mean currency, but the pun is great.
minikites 8y ago
Pennies are not effective as currency. You can't use them in places you typically use coins (parking meters, vending machines, automated road toll collection) so we're using tax dollars to fund the creation of useless zinc circles.
- someone7x 8y ago
  Exactly this. Pennies not being accepted in so many use cases requiring exact change is just ridiculous.
chiefalchemist 8y ago
The purpose of the mint is to give legitimacy to what is a fiat currency.
- asdsa5325 8y ago
  No, the mint doesn't give purpose to money.
  - chiefalchemist 8y ago
    Legitimacy is not the same as purpose

Yeah, the headline seems dumb. If the mint creates a $100 bill for $1.50, did they make $98.50? No. The purpose of the mint is to maintain the US currency. It's a cost center, not a profit center.

noer 8y ago
Unless I'm reading it wrong, they do think of it that way (on coins at least): >Fortunately, dimes and quarters are cheaper to make, costing less than their monetary value. So the Mint makes up the losses incurred on pennies and nickels with its 10- and 25-cent coins, and last year reported making $391.5 million in seigniorage. Also, paper money isn't produced by the Mint, it's produced by the Bureau of Engraving & Printing
- mortenjorck 8y ago
  The author of the article thinks of it that way, but I have to think the article is written from a misguided premise. The Mint may publish those numbers in the form of a balance sheet as a novelty, but as far as I understand, they don’t govern the money supply any more than the Bureau of Engraving and Printing does. Their scope is to strike currency, and I would think the exact monetary value of it is immaterial to that mission.
  - slededit 8y ago
    Seigniorage used to be an important revenue generator for governments. This has largely subsided with the transition to bank notes which don't operate under the same market dynamics. But the historical inertia is still there.
thebooglebooski 8y ago
"Making" and "creating" are pretty ambiguous here. The mint literally creates physical money (coins). But in the end, the government actually does generate revenue, that gets calculated into a profit or loss for the country: https://www.investopedia.com/terms/s/seigniorage.asp https://www.investopedia.com/terms/s/seigniorage.asp $100 bills DO generate profit. Pennies generate a loss. If you look at all of the currency in aggregate, it generates positive revenue for the country.
- tylerhou 8y ago
  $100 bills do generate profit for the person printing them, but in aggregate they inflate the currency as a whole. This inflation, in theory, cancels out the wealth "created." So when people print money, they aren't generating any wealth - it's just a wealth transfer from people who have paper money to the people who print it.
- andyzweb 8y ago
  $100 bills generate close to 0 profit for the United States Treasury as they are sold to the Federal Reserve Banks at manufacturing cost. However coins are sold by the United States Treasury to the Federal Reserve Banks at face value and can generate a profit/loss based on the difference between the face value and the cost of manufacturing.
PKop 8y ago
For some acceptable price yes. This isn't unbounded though. At some point they most certainly would stop producing a unit of currency if it cost way too much vs it's value.
pishpash 8y ago
Yes they did make $98.50, and it is profit. The job of the Mint (and the Bureau of Engraving & Printing) is to use the monopoly of seignorage to make money out of thin air. As much as there is demand for coins and bills, they will sell into the market. The job of maintaining (the value of) the US currency is in the hands of the Federal Reserve.

pdq 8y ago

Technically you mean currency, but the pun is great.

minikites 8y ago

Pennies are not effective as currency. You can't use them in places you typically use coins (parking meters, vending machines, automated road toll collection) so we're using tax dollars to fund the creation of useless zinc circles.

someone7x 8y ago
Exactly this. Pennies not being accepted in so many use cases requiring exact change is just ridiculous.

chiefalchemist 8y ago

The purpose of the mint is to give legitimacy to what is a fiat currency.

asdsa5325 8y ago
No, the mint doesn't give purpose to money.
- chiefalchemist 8y ago
  Legitimacy is not the same as purpose