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It could be that they measured a stack of bills sitting on a table, then did the math to make a metal frame to contain $1,000,000. But they didn't account for s
by ggreer 1y ago
It could be that they measured a stack of bills sitting on a table, then did the math to make a metal frame to contain $1,000,000. But they didn't account for stacks compressing under the weight of higher stacks, and it wouldn't look as nice if the top part of the cube was empty.
Still, it does seem like it would be cheaper to rebuild the case than to add $500k to it. Maybe it's easy for the Fed to acquire more cash as long as it's guaranteed not to be spent.
- grogenaut 1y agoIt's the cost of paper not the dollar value. Also only the outermost bills need be real the rest could just be paper, or voided bills or whatever. But accounting can cover it. It's not gold or pennies where the currency costs what it is worth to make
- kasey_junk 1y agoCoins don’t cost what they are worth to make.
- tempestn 1y agoPennies do. (More, actually.)
- bandofthehawk 1y agoPennies and nickels cost more to make than they are worth.
- jameshart 1y agoPeople are quick to state this as if it's a slam dunk case for 'we shouldn't make them any more', but I don't understand the thinking there. An individual coin can be used many many times to facilitate many many transactions before it eventually falls out of circulation through loss or damage. The amount you should spend on making coins of a given denomination has nothing to do with what the total face value of those coins is, but needs to be traded off against the value to the economy of having those coins in circulation. If spending more money on producing higher quality coins enables them to remain in circulation twice as long, it might be worthwhile even if the cost exceeds the face value. It's a different story if the material value of the metal in the coin exceeds its face value - at that point it makes sense to go to a bank, change money into pennies, then scrap them and sell the copper. That would be bad. But the reason pennies are a bad deal isn't because of their manufacturing cost, it's because their handling costs exceed the value of incorporating them in a transaction. Should a store go to the trouble of keeping pennies available, counting them, storing them, transferring them to the bank? Or should they round up change to the nearest five cents and take a 4c hit on each transaction where you'd have been able to use pennies? If your average transaction value is over a hundred dollars or so, like most supermarkets, and you only handle cash on one sale in 50 say, if handling pennies in your cash-management operation takes more than a few thousandths of one percent of your budget, it's costing you too much.
- Uvix 1y agoStores are going to round amounts in their favor, not customers’. So they will make more money once the penny falls out of circulation.
- Ferret7446 1y ago> It's a different story if the material value of the metal in the coin exceeds its face value - at that point it makes sense to go to a bank, change money into pennies, then scrap them and sell the copper. That would be bad. Well, that is highly illegal and not very profitable vs the amount of risk. You'd be better off doing almost any other crime.
- sayamqazi 1y agoIn my countries a decade or so ago we had a copper coin for roughly 1c. People started hoarding and defacing the coins then selling it as copper scraps. It was so rampant that I think it would have been infeasible to punish eveyrone. So the Govt just discountinued it.
- eloisant 1y agoIt's only true for the smaller denominations, 1c and 5c for USD. Other than that, coins are cheaper than bills on the long run, because they last longer. It would be cheaper for the US government to stop making $1 bills and have people use the $1 coins, but I guess old habits die hard.
- ciupicri 1y agoI guess that's why we have €1 and €2 coins (1 EUR ≈ 1.18 USD).
- eru 1y agoWell that, and Germans need the 1 Euro coin to unlock their shopping trolley. (Or at least they used to; when I visited back recently many supermarkets had free trolleys! Can you imagine my shock?)
- acatnamedjoe 1y agoUnlocking trolleys with a coin is normal in Britain too. I'd never considered that this might be unusual. Is this not a thing in other countries? How do they get people to return their trolleys to the bays?
- eru 1y agoIt's not a thing in the US, I think. And did Britain have this before the invasion of Aldi and Lidl?
- jwarren 1y agoYeah, we've had it for at least 30 years, probably longer
- amenghra 1y agoIt's not a thing in most US cities. Since there's no incentive for individual people to return their trolleys it ends up being someone's job to collect the carts.
- adolph 1y agoThere is an excellent recent "The Answer is Transaction Costs" podcast episode (The Price of Pennies: Make or Buy?) outlining a proposal to save money by buying back coins instead of making new ones. https://taitc.buzzsprout.com/2186249/episodes/17383823-the-price-of-pennies-make-or-buy https://taitc.buzzsprout.com/2186249/episodes/17383823-the-p...
- dyauspitr 1y agoWhat do you mean? The currency in there is spendable isn’t it?
- tharkun__ 1y agoWhat leads you to believe that? I haven't been there but the plaque seen in the picture just says: Have you ever wondered what one million dollars looks like? You don’t have to wonder anymore because you can see it right in front of you! That does not say nor in my mind even implicate that these would be valid dollars. It just wants you to be able to "see" what a million would look like. For all we know they printed fake money for it that uses the right paper for thickness and such and the right face value print but is otherwise fake. It would still meet the stated description. I would hope they at least used real bills they just took out of circulation for whatever reason but there can't be any real expectation. It's a "stunt" only anyway coz a million in $1 coins would look way different. As would a million in 20s or 100s.
- dyauspitr 1y agoBecause that’s the entire appeal of the structure, the fact that it’s filled with a million dollars.
- tharkun__ 1y agoI don't think that's true. The appeal of the structure is the belief that it's actually a million dollars ;) But as many things in life, it's probably just a nice facade.
- rtkwe 1y agoThat ignores the other option which is it's not solid and they just filled the empty space with foam or a wooden box.
- logifail 1y ago> Maybe it's easy for the Fed to acquire more cash as long as it's guaranteed not to be spent. Based on Fed policy since 2007, they may be happy to hand out cash especially if it's going to be spent. "Money printer go brrr" and all that...
- lxgr 1y ago> Maybe it's easy for the Fed to acquire more cash as long as it's guaranteed not to be spent. The Fed doesn't acquire cash, it creates it. USD banknotes are liabilities of the Fed, but that concept only makes sense when somebody other than itself owns them.
- meta_ai_x 1y agoNo. We have a double accounting system. For every $1 it creates, it has to create an equivalent liability. And when something is budgeted for $1 Million, it is $1m nothing more nothing less
- xnyan 1y agoI’m certain there’s policy that allows for national mint to create non-spendable exemplars of currency in a way that does not count as cash.
- lxgr 1y agoNot sure when exactly the Fed accounts for USD printed – i.e. only once distributed to somebody else, or as soon as they're printed and still owned by the Fed – but even in the latter case, asset and liability work out to exactly zero. So this million USD might or might not have been accounted for, but it definitely does not need to be budgeted for.
- jacksnipe 1y agoI mean, that's a very corporate accounting way of looking at it. But countries are not corporations, or even banks, and the abstraction is so leaky it's pretty much never worth using.
- coliveira 1y agoMost probably these are voided notes, they actually have zero value because they were taken out of circulation.
- jjk166 1y agoIt costs about $.032 to produce a 1 dollar note, so an extra 500000 new bills would be about $16k. It could be even cheaper if these were old bills than needed to be pulled out of circulation. In that case they'ed be paying money to dispose of them anyways.
- pbhjpbhj 1y agoPaper money in the UK used to be incinerated, if they used the heat to generate power, or even just heat water for the facility, then there would still possibly be some cost in not burning it ... but much though. Not sure if they still burn the plastic money, would be nice to imagine they dissolve it in acid and use it to make more money (but they probably can't because of the dyes, at least).