America runs out of change

(EFE) .- “Currently the US is suffering from a shortage of currencies. Please, use debit, credit or another type of contactless payment if possible.” This is how many establishments in the country receive customers when they announce one of the unexpected victims of the pandemic crisis.

In the midst of the acute economic crisis, with millions of people unemployed following a wave of layoffs due to the paralysis of economic activity, the shortage of coins is a symbol of the lack of money that many American families suffer.

The situation has reached the point that several retail associations in the country, including the National Grocers Association (NGA), have formally urged in a letter to the Federal Reserve and the Treasury Department to take “swift” action by respect and facilitate the flow of coins.

Specifically, they stressed that cash represents more than a third of funds personally exchanged by American consumers, and has a particular impact on people with lower incomes.

In the United States, almost 25% of the population is unbanked or underbanked, that is, they have to resort to unconventional financial services, so they have little access to plastic money.

Powell indicated that it is a “temporary” situation derived mainly from “distribution” problems.

The problem, whose magnitude has not stopped growing, has already been discussed in the federal Congress.

“What has happened is that, with the partial shutdown of the economy, the flow of currencies seems to have almost stopped,” explained Jerome Powell, chairman of the Fed, in a July appearance before the House Financial Services Committee. Representatives.

On the one hand, the US Mint limited the number of employees in the spring at its various facilities to avoid contagion of the coronavirus, although in recent weeks it has resumed normal activity.

But the main cause seems to be the economic paralysis, which has caused many currencies that are usually exchanged not to move before the closure of businesses, which substantially altered circulation.

Powell indicated that this is a “temporary” situation derived mainly from “distribution” problems and said that the central bank is working with the banks of the Fed’s districts to ensure that “the supply goes where it has to go.”

Also the Secretary of the Treasury, Steven Mnuchin, made an unusual call to the citizens: “If you have extra coins at home, please use them to make purchases, deposit them in the bank or try to exchange them.”

“Help the coins move,” said the Treasury chief in a message on his Twitter account.

To address this situation, at least temporarily, small establishments across the country are turning to homemade solutions.

A well-known laundry operator in the West Hollywood neighborhood (Los Angeles, California), for example, started a campaign in July to ask friends, family and regular customers of his business to search their homes for all the coins they could find to exchange them for tickets at your establishment.

Thus, the laundry customers would be able to use the change machines installed in that place and activate the use of the washing machines, which traditionally work with 25-cent coins.

In fact, the shortage of simple money in circulation is having a great impact on this type of business so iconic in the United States, given that about 60% of the laundries in the country only accept coins as a form of payment, according to data published by the Laundry Association.

In Covina, east of the Los Angeles city, a taqueria belonging to the Taco Nazo chain has also run out of cash, according to a report in the Los Angeles Times.
Its owners have decided that, instead of cash change, they will give free drinks or bags of potatoes with a value similar to the return.
In this way, while the authorities try to solve this unforeseen problem of monetary policy, ordinary people manage to cushion the shock of this currency crisis.

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