dealers and collectors are still reeling from the US Mint’s announcement
that it had run out of American Eagle gold coins. But what ought
to surprise every American isn’t that a government agency came up
short. It’s that the US government should be making little metal
discs at all.
are nothing new. A few months before running out of gold Eagles,
the US Mint had to ration silver Eagles. Not long before that, pennies
were in very short supply. Nor are other government mints any better.
Back in 2007, for instance, Argentina had such a severe change shortage
that its panhandlers nearly starved to death, while in southern
China, 100-yuan coins commanded a whopping 25 percent premium.
Why are coin
shortages so common? Governments typically blame unexpected changes
in demand. But suppliers of all sorts of other goods manage to avoid
running out, despite even more dramatic demand changes. So what’s
special about coins? An old chestnut says that if the government
were put in charge of the desert, pretty soon there’d be a sand
shortage. Recall the plight of consumers under socialism: socialist
governments tried to make everything and eventually ran out of everything.
is dead, but not when it comes to coining. So coin shortages keep
breaking out, as they have ever since governments first monopolized
coin making in ancient times.
In their defense,
government officials insist that private industry can’t possibly
be trusted to make coins of any sort. An obvious problem with this
argument is that, if it were really true, government mints could
always outcompete would-be rivals, and governments wouldn’t have
to outlaw private coinage, except for outright counterfeiting. Yet
governments routinely punish private firms that try to issue their
own distinct coins. Just last year, for example, the FBI raided
Florida’s private Sunshine Mint, confiscating its inventory of coins
and metal. That mint’s products included one-ounce "Liberty"
gold and silver dollars that competed directly with the US Mint’s
Eagles, but were plainly distinguished from them – and were
never out of stock.
professor at West Virginia University, has discovered the monetary
equivalent of the lost city of Atlantis. He has written a full-scale
historical narrative – one that is deeply interesting and
engaging – that has been largely unknown, even to scholars
of the Industrial Revolution.