http://www.usmint.gov/mint_programs/$1coin/ Buying $500 in cash… with $500 on a credit card. I don’t need to say more. (Remember the savings bond arbitrage?) But anyway, what a great way for the mint to force banks to stock dollar coins against their will. Banks wouldn’t voluntarily do it… but if customers bring them in for deposits, it’s much harder for them to refuse it. Overall this will cost the mint very little. They have to pay ~ 2% in interchange fees + $5 shipping for 500 coins, so it’s costing them roughly 3% of face value to send them directly to people. I’d have to say though… the whole dollar coin thing is bull. Coins in general suck. I hate coins. If a store tried to hand me back dollar coins for change, I’d balk at that. They should just give it up and realize that people won’t (voluntarily) use crappy coins when they can use lightweight bills instead. In fact, I purchase almost everything on a credit card just because I can’t stand getting coins back for change.
How is there an aribtrage opp? And coins last something like ~20 times longer than paper currency, so it is cost effective for the gov’t. But then again coin collectors will be hoarding these coins.
I did the cashback thing with credit cards & savings bonds… that was a SWEET Deal! I guess I’ll do $500 of these just for the $10 cash back. It’s a “free lunch” so long as you don’t get robbed, forget to pay your credit card bill or lose the coins on the way to the bank.
don’t forget (assuming you receive the coins and deposit prior to the due date of the card) you also get the liquidity of the $500 free until the credit card’s due date. And in this economy, liquidity is at a premium!
Just think of the airplane conversations you can have - “I earned this flight by buying Polk dollars”. Anyway, modern Coke machines take $1 coins. Since I seem to need Diet Coke a lot, I find dollar coins to be pretty useful. (If I buy it at the grocery store, I just drink it all and then I have to pee all the time. Probably if I bought $500 in Polk dollars, I’d have similar problems and my arb wouldn’t last long).