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« For all you utter bankers | Main | Because that's where the money is »

Viking expedition

By Dave Birch posted Nov 5 2009 at 4:35 PM

[Dave Birch] I was in Copenhagen recently, so naturally I went along to the national museum to see their notes and coins exhibition (galleries 141 to 146, if you're interested). It was really good, and I particularly enjoyed the display of Swedish copper money from the 17th century. Sweden had lots of copper, so that's what it used for coins. But copper isn't worth very much, so the coins were huge -- the one thaler "coin" was a block of copper weighing a couple of kilograms.

While pottering around between the 10th century Islamic coins found in Viking treasure hoards, the short-lived Norwegian privately-issued banknotes that preceeded Denmark's first paper currency and the English gold nobles from the time of Henry II, I happened across some other long-forgotten artefacts from the story of the evolution of the means of exchange in the world's oldest kingdom...


Danmont cards! I have to admit to a moment of melancholy while gazing at the cards, notes and coins. Some of them were ugly, some of them were beautiful, and all of them tell a story. Such as, for example, you've been cheated.

A one euro coin has turned up in Spain bearing the face of cartoon couch potato Homer Simpson instead of that of the country's king

[From Spanish shopkeeper finds Homer Simpson euro | U.S. | Reuters]

So when cash disappears, and there are no more portraits of heroic characters or Latin inscriptions, what will take over the narrative? Facebook, I suppose. But wiping away the tears, I remembered that there are a great many people around the world who can't wait to replace coins with mobile phones. The truth is, coins today are as much hassle as the Swedish copper currency from the days of the Carl Gustav wars.

Mr. Zhang of Shenyang carried two bags of coins to a bank outlet in the city, having accumulated 37,000 coins, more than 600 yuan, over the past decade. According to the rules of the bank, there is a one-yuan service fee for counting every 50 coins. If he were to hand the money over to the bank, the service fee would amount to more than the total value of his 37,000 coins... Shenzhen, Shanghai and Beijing banks have charged counting fees since 2005... the most affected were bus companies. In order to save counting fees, the Shenyang Bus Company handed out change to its employees as their wages.

[From China sees change scarcity -- china.org.cn]

Enough is enough.

On the other hand, an alternative to simply getting rid of the coinage might be to reform it. A rational person might decide that the best system of coins would be the one that requires the fewest coins to make up the average tender. If only someone would write a computer programme to calculate what this system might ook like. Oh, wait...

the current combination of coins (penny, nickel, dime, quarter) results in an average of 4.70 coins per transaction. What’s a little surprising is how inefficient our current setup is! It’s only the 2,952-nd most efficient combination.

[From Do We Need a 37-Cent Coin? - Freakonomics Blog - NYTimes.com]

You might be surprised by the calculations about the most efficient alternatives! Or at least you might be surprised if you think that the decimal system was chosen on the basis of retail efficiency alone.

The most efficient systems? The penny, 3-cent piece, 11-cent piece, 37-cent piece, and (1,3,11,38) are tied at 4.10 coins per transaction.

[From Do We Need a 37-Cent Coin? - Freakonomics Blog - NYTimes.com]

I love this kind of thinking, but personally I think a better place for the US to start is to abolish the penny and the $100 bill. Similar,y we should abolish the 1- and 2-cent euro coins along with the 100, 200, and 500 euro notes. It' time to get tough with cash, and there's no room for sympathy about the nice pictures on the notes or coins!

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]


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They recover the difference on other coins.

I think the latest figure is that a penny costs 1.7 cents!

Apparently, nickels and pennies actually cost more to produce than they are worth. For instance, according to the U.S. mint, a penny costs a penny and a half or so to produce (I can't remember the exact amount, but somewhere around there).

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