There are old songs about coins in your pocket including brother can you spare a dime; pennies from heaven; penny arcade and the list goes on. It was a normal thing for people to have some money in their pockets to pay for vending machines, laundry, allowances, the tooth fairy and the list is endless. Then came COVID and as we shutdown, people did not want to deal with cold hard cash or dollar bills. We started using debit more, pay companies such as PayPal, Square, VISA, Mastercard all benefited from increased volumes. What we do not have is coins in our pockets.
In an article by Sarah Skidmore Sell of the Associated Press the Federal Reserve announced in June that the supply system for coins has been severely disrupted by the pandemic. The issue is not the coins themselves but the circulation because businesses and consumers are spending as usual. The US Mint and Treasury Secretary Steven Mnuchin have urged Americans to use coins or turn them in to banks for help for now. At some point the coin supply is expected to normalize.
Brian Wallace, Chief Executive of the Coin Laundry Association noted we provide a basic service, people need to do their laundry. About 56% of the laundromats take quarters as the only form of payment. 89% take quarters as some form of payment with cards, loyalty programs or mobile payments as an alternative.
Quarters were easy to access, go to the bank or the supermarket and they would give you quarters. The Federal Reserve put restrictions on the coins and supermarkets were not accepting cash for a few months, many are now.
Linking to dividend paying stocks, there are many things in our lives which we think as routine as something that always happens until there is a roadblock. Similar to all things in life, in takes time to figure things out but they can be. One of the reason to invest in dividend paying stocks is they should have the ability to weather some time as they sort out the concerns. If the company has been profitable for a number of years, it should have the luxury of time to figure out the roadblocks, if not you need to find alternatives.
There are more questions than answers, till the next time – to raising questions.