There is a coin shortage.
There is also a currency shortage, but it is not as severe as the coin shortage.
The shortage is not because the government has stopped the manufacturing process. There was a production slowdown in April and May, but that does not account for the lack of circulating coins. The West Point Mint briefly closed because the circumstances were different. West Point does not strike circulating coinage.
Although the Bureau of Engraving and Printing slowed down production in Washington, D.C., Fort Worth did not miss a beat.
The Federal Reserve, an independent organization, did not stop the circulation of money. There is money in the various cash rooms around the country. While some of the supply is lower than usual, Federal Reserve Chairman Jerome Powell testified to Congress that their supplies are adequate to meet the demand.
If the government is not causing the coin shortage, then where are the coins?
For nearly eight weeks beginning in mid-March, the amount of money circulating diminished to its lowest levels since the Great Depression. You have not been spending cash. The result is that the stores and banks were not circulating coins forcing the logistics companies to store what they can and deposit the rest with the Federal Reserve.
The Federal Reserve believes there are enough coins to satisfy commerce. The problem is that the supply chain has to restart. There is a limit to how fast the supply chain can move the coins around.
The warehouses where the coins are stored is like a gallon jug or your favorite beverage. To server your guests, you need to pour that gallon jug into glasses. But the only way to pour the jug is into a funnel to guide the liquid into each glass. How much is pouring slowed down by the bottleneck of the smaller opening at the bottom of the funnel?
In the case of coins, the smaller opening is the armored cars that deliver the money from the warehouses to the banks and other large institutions. The limited capacity of the opening will slow down the pouring of the beverage and the pouring of the coins back into the economy.
One Federal Reserve research group suggested that it could take 3-6 weeks for the supply chain to get back to normal. Compared to the lack of Clorox and Lysol cleaners in the supermarkets, that is lightning fast!
And now the news…