Fed Theory

[thurmownator]

Do any of you also subscribe to this theory ? (just came to me yesterday).

The Fed intentionally holds back on releasing all newly minted halves (1971- 1986 & 1988 - 2001) of certain years; as demand is already met with current supply.

But over time, with all of us pulling keepers from circulation, demand (however artificially created) starts to increase and brand new (older) halves suddenly enter into circulation.

When I first back into CRHing in mid December (after a thirty five year absence); I was amazed at the number of BU 96d halves I was finding. In fact, some of you may recall some posts of mine in January on how I was saving and tubing some to sell at a local coin show. (only got 11.50 each and for only two of the tubes). I was also seeing, to a lesser degree, many BU 94d halves showing up as well.

Now, in the last three or for boxes, for the first time since I've been back in this, I've seen many, many 89d BU halves all of a sudden.

These coins all have strong strikes, sharp edges and obviously minimal nicks.

Again, anyone else subscribe to this theory; or have one themselves to explain this phenomenon ?

 

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[snappy]

I hope so. I like half dollars and do what I can to try to get them into circulation. When I spend money I always use them for the change, I don't over do it but will pay for items $2.00 and under with halves. Every purchase I spend 1 or 2 halves. I know a lot of them are pulled from circulation but they are rejects. Hopefully the stores will also pass them out in change, and start a demand.

 

[Cerulean]

That's exactly what they do with dollar coins. The Mint made a huge batch of Susan B's in 1979-80 and delivered them to the Fed. The Fed issued them per commercial bank demand in smaller batches. When that first supply ran low in the late 90's, the Fed ordered another batch from the Mint. The Mint then made an even huger batch of Sacagawea dollars in 2000-01. Then the presidential dollars started this year, but that was by Congressional order, not by Fed resupply order. There must still be Fed vaults full of Sacagaweas that the Fed hasn't released yet, since the first batch of Sacs hasn't been used up yet. Unless the presidential dollar circulates, it'll satisfy the demand for dollar coins well into the 2030's. (And if you've read the Dollar Coin Act of 2005, you know the Mint's been ordered to continue making Sacs along with Presidentials.)

In other words... yes, I think a year's mintage of coins does not hit circulation all at once. I think the Mint makes them all at once, and the Fed slowly releases them into circulation at the rate of demand. But we the public only notice such behavior with the less common coins like halves and dollars.

What does this mean to us hunters? We're still seeing mid-to-late 90's halves hitting circulation for the first time. This tells me that the Fed still has 90's-era halves to release. We're still several years away from exhausting the Fed's standing supply of virgin clad halves.

 

[secondcup]

Yes, I agree with this theory. I believe it's simple supply and demand that gets the newly minted coins into circulation. But what I live for as a CR Hunter is the full roll of 64's that someone turns into their bank that I can pick up at face value if the timing is right. Banks won't order coins from the Fed if they have enough on hand from people turning in their collections! Thanks to those folks!



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[LJ]

You may be right......I just picked up a box and all 50 rolls are 94-P bright and shiny....I don't think there were ever in circualtion.....look like they came right from the mint.

 

[Emperor Findus Cladius]

It is hard for me to subscribe to the theory. It is true that we do take a lot out of circulation, but in reality these coins are not actively circulating in the general population. Since most people do not actively spend halves, they sit in bank vaults for the most part. As I said, we do take a lot out of circulation, but our rejects go right back into someones vault, they are not circulated like quarters, dimes nickels and pennies. Since there is not a demand for them like the other denominations, there is PLENTY of coins out there to satisfy current demand. I personally think that these new ones that are showing up have been sitting in a vault, they have just come to surface because of CRHers have depleted the bank vault they were sitting in enough to push them to the front of the pack. JMHO.

 

[scotto]

You may be right......I just picked up a box and all 50 rolls are 94-P bright and shiny....I don't think there were ever in circualtion.....look like they came right from the mint.

Half of my last bag was all new 97's.

 

[bigtime400]

I have never gotten full rolls of any of these but I have found some pretty nice BU coins. I have kept some too if they are really nice and not all bag marked. I will probaby just end up cahsing them though. But I notice alot of 96,97,98 and 2000 in the recent years. and alot of 72 and 74 in bu....and even some Bicentenials. All others I see a varying degree of BU coins. but I do see them!

 

[65gt350]

I agree with this theory. I have received full date rolls of BU coins in the same wrappers as the regular coins. On a few solid boxes I have gotten 99D and 2000D coins in NF Strings and sons wrappers. I assume that the NF strings wrappers are from the FED and the regular wrappers are from the carrier. I also assume that the carriers get both rolls of new coins and bags of new coins. This can explain how some boxes can be partially filled with new coins.

 

[MalteseFalcon]

This theory would explain why I have received 2 full boxes of brand new 1997 or 1996 halves in the past 6 months.