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Canada's Giant Coin
A Million Dollar Coin as Big as a Large Pizza
While modern governments continue to dismiss the notion replacing the paper banknotes, which are produced by their central banks, with gold, their mints are engaging in fierce competition with public and private mints of other nations.
This isn't a case of government's slowly moving toward a gold standard (using gold as legal tender). Instead, the motivation here is old fashioned profit. Gold coins are popular with the public and government mints are cashing in on that demand and making a profit. Historically, governments have claimed the right to coin money and make a profit on the difference between the value of the metal used and the face value of the coin. In the list of Congressional powers found in Article I, Section 8 of the U.S. Constitution, is the power to coin (but not print) money.
Good as Gold
As the value of the paper currencies of major nations was being eaten away by inflation in the 1970s, people began turning to gold in an attempt to preserve wealth. Even in the United States, where the ownership of gold in forms other than jewelry or antique coins had been made illegal during the Administration of Franklin Roosevelt, pressure to legalize the ownership of gold began to build. When gold was again legalized during the Administration of Richard Nixon, many Americans began purchasing the South African Krugerrand, a gold coin of recognized value but small enough to be affordable. Of course, people paid a large premium over the face value of this coin as the value of the gold in the coin far exceed the paper dollar value of the coin's face value.
Recognizing a good thing when they saw it, the Canadians jumped in next with the gold maple leaf coin. As other nations' mints, like good capitalists, jumped in to provide consumers what they wanted while making a profit for themselves, the United States mint could no longer sit on the sidelines while American consumers sent their money overseas in exchange for gold coins. Up until this point the U.S. Mint had been making money the old fashioned way by producing coins whose face (monetary) value was greater than their metallic value and pocketing the difference. Even after debasing dime, quarter and half dollar (dollar coins as well but no one uses them) coins by replacing the silver in them with copper coated with a thin veneer of silver, the profits were chump change compared to the money to be made with gold and soon the U.S. Mint entered the market with their American Eagle gold coins.
With competition growing things had to change. Since price of these coins is pretty much set by the market for gold itself and the price of gold is increasing there isn't a lot of room for price competition. But, quality and novelty are another matter and Canada is upping the ante in this area. In the quality area, new gold coins from the Canadian Mint are 99.999% pure. The original Canadian gold Maple Leaf coins that Canada first introduced in 1982 were 99.99% pure. But the profits that the Canadian and South African Mints were making attracted the mints of other nations so, to maintain its market share in this environment, Canada has increased the purity of the gold content in its coins. Now, in another move aimed at increasing its market share, Canada has come out with a new, larger coin. By larger, they mean both physically larger and a larger denomination. Canada's new C$ 1 Million coin is not only the largest single denomination coin but it also weighs in at a hefty 220.5 pounds (100 kilograms) and, at 21 inches in diameter, is the size of an extra large pizza. Like the fellow I described in my Hub on the hyperinflation in Germany after World War I who needed a shopping bag to carry all of his paper marks, a person will need a suitcase on wheels to carry this coin. However, unlike the bag full of worthless paper money the fellow I described had to carry, this coin has value. While its monetary value is a cool C$1 Million, its true value, based upon its gold content, is considerably more than this.
What started out as a marketing stunt to boost the sales of the C$1 Maple Leaf gold coins, has attracted attention and some wealthy people and coin dealers in the U.S., Europe and Asia have expressed interest in owning these C$1 Million coins. Given the extra labor required to produce these mega coins along with their price tags, don't expect too many to be produced. But, if you are one of the fortunate few who is able to purchase one of these coins, the fact that very few will be produced will further add to their value.