by William J. Luther
The American Institute for Economic Research
“If you put the federal government in charge of the Sahara Desert,” the economist Milton Friedman once quipped, “in five years there’d be a shortage of sand.” The U.S. Mint, to its credit, had a much longer run.
The Federal Reserve, which purchases coins from the Mint and distributes them to depository institutions, announced it would begin rationing coins “based on historical order volume by coin denomination” last month as its coin inventory had been “reduced to below normal levels.” The Fed also called on the Mint to increase the supply. Until the shortage is resolved, however, retailers unable to acquire enough coins from banks are left requesting customers pay with a card or use exact change.