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For many, many years when I got cash out of the Wells Fargo ATM's, it came to me in all twenties. As I have been getting $500 at a time in recent years, 25 twenties was a thick wad to put in my wallet - wouldn't really fit properly. Then all of a sudden about six months ago, my requested $500 starting coming out as $400 in fifties and $100 in twenties. (There is no way to requrest anything different).
At first I was worried about fifties being accepted but that turned out to be no problem, especially if I am spending $30 or more at a pop, like at the supermarket or the gas station. Some very small businesses, such as family owned restaurants, may sometimes have trouble making change for a fifty, but even then not often. I make it a habit of keeping some twenties in my wallet for such occasions.
Although inflation has been very mild over the past 8 or 9 years, there has been some. Therefore, the trend toward use of larger bills is inevitable over time, as illustrated by my personal example above. However, at this point, I see no need for anything larger than the $100 bill.
l though inflation has been very mild over the past 8 or 9 years, there has been some. Therefore, the trend toward use of larger bills is inevitable over time, as illustrated by my personal example above. However, at this point, I see no need for anything larger than the $100 bill.
In 1969 the government decided to retire the $500, $1000, $5000 and $10,000 high denomination (HDN) banknotes. At the time $45 billion in currency was circulating. By "retire" I mean they passed a law that said that they would no longer produce any banknotes higher than the $100 and destroy any high denomination notes that were turned into banks. No more than $5.5 billion of these HDN banknotes was every produced in 1928 and 1934 and the government stopped circulating new ones after WWII. So by 1969 there were fewer than $1 billion left in circulation. By policy, the USA never declares any banknotes invalid as do many European countries. But eventually they become more valuable as collector items than the face value. Also in 1970 the Bank Secrecy Act was passed and the era of Anti Money Laundering laws began.
With all those changes the assumption was that the rate of printing new $100 banknotes would drop to at least match the inflation level and population growth. But President Nixon took us off the gold standard and under Nixon and Ford the $100 banknotes were produced in record numbers so that by 1976 there was one c-note for every man woman and child in the country and the total currency supply was now over $80 billion which far outstripped population growth and inflation. AFAIK the first detailed study was done by a prestigious academic from Harvard that tried to determine how many of the $100 banknotes were used for illicit activity. He concluded that there was no real advantage to having one $100 banknote per capita and the benefits of banning the $100 bill (like the earlier HDN) would be huge in fighting crime and tax evasion with very little downside to legitimate commerce.
Obviously his advice was not seriously considered by the government, and today we have 33 c-notes per capita (about 8 times the rate of inflation since 1976 which is closer to 400%). C-notes in circulation total $1.08 trillion dollars as of 31 Dec 2015 and total currency is pushing $1.4 trillion.
Defenders of cash say this massive increase in cash is insignificant next to policies which include quantitative easing. With the Euro-zone and Japan at 0% repo-rate, and USA, Canada, and UK at 0.5% repo-rate the days of omnipresent bank fees are just around the corner. The need for currency is stronger than ever. Since $100 today was worth $15.50 in 1969 and $500 today was worth $77 in 1969, that the USA should repeal the law passed in 1969 and circulate a safe version of the $500 bill again with excellent anti-counterfeit devices. For the portrait, I don't think people care if William McKinley , the 25th President of the United States, is on the new bill.
Many analysts believe that the government exaggerates how many $100 banknotes are circulating overseas. Although they could be circulating in the hands of foreign drug cartels, warlords, and human traffickers that is still more acceptable to most people than thinking there is a trillion dollars in cash in the hands of domestic criminals.
The $50 banknote is circulating at about 5 per capita, less than the 6 per capita of the $10 banknote. Only the $2 banknote has lower circulation than the $50 and the $10. Most people don't see the point of the $50 bill. In the USA and Canada most people function with $20's for mundane usage and switch to $100s for rare occasions (like buying used cars, travel overseas, cheating on their wife, etc.). In Australia and in the Euro zone the $50 is preferred over the $20.
I don't see any point in it. Most don't carry that much cash around anyway. I carry about $100 tops. Anything else I have a CC
This is precisely it - the shift away from cash has countered the fact that over time inflation reduces the purchasing power of a given unit of cash.
On the flip side, the same dynamic has made the cent pointless. Really, our last decimal point is pointless. We should not only scrap the physical cent, why should scrap the cent as a concept. Thus, the nickel and the quarter should also be dumped. Once these coins are gone, we can make the larger denomination coins smaller. So keep the dime and the fifty-cent piece - but make the latter smaller, larger than the current cent but smaller than the current nickel. And keep the dollar coin but make it smaller, too, larger than a current nickel but smaller than a current quarter. In this way, a person could have five dollars worth of change in their pocket that would physically be no more extensive than carrying around ninety-five cents in change is now. So a book would be $12.00 instead of $11.99 or $11.95. No, those few cents don't matter.
That would both be cheaper (for the U.S. mint to produce) and easier on the consumer. But it would run smack up against the maniacal opposition to change people have, and would go nowhere. Out would come the "It'll be so confusing!" brigades. Ever mistake a $100 for a $1? Me, neither - and they're a hell of a lot more similar to each other (exact same shape and weight) that are any two coins of different denominations.
On the flip side, the same dynamic has made the cent pointless.
Coins in the USA are probably one of the stupidest things that are made by the government. Only dimes and quarters are remotely usable. Pennies and Nickels cost far more to produce than they are worth, and many countries like Sweden have their smallest coin worth 14 cents. I know that the Euro zone had one cent and five cent coins, but at least they are cheaper to produce. The 50 cent piece is way to large, and dollar coins will never be popular as long as we have dollar bills.
But that said, many analysts point out that coins are obsolete. Even small children can be trusted with cards that record the value of change. Such card readers are inexpensive to produce. So if you pay for something with a $10 bill, and get 58 cents change you just record it on a card. But parents are giving children as young as 5 some kind of smart phone device, if only for the safety of the location ability.
Sweden is leading the way on coin reform as well as banknotes. They have roughly 2 billion coins circulating for a country of less than 10 million people (200 coins per person). The mainstay is a 10 Crown coin worth $1.21 which is circulating at around 25 coins per person (i.e. 1 coin in 8). Next year they are going to declare everything but the 10 crown coin invalid. People will turn in some of the 2 billion coins at banks, but many will be kept as souvenirs. The mint will produce new coins, but it won't need to mint nearly as many as most transactions are now electronic. The lowest value coin will be worth 12 cents in US money.
Last edited by PacoMartin; 03-19-2016 at 09:59 AM..
It's next to impossible to spend a $100 bill these days; many stores won't take them. What would be the point of an even bigger bill that can't be readily spent?
Stores who do not take them are dealing with change for small purchase issues.
Recently had a cash deal on a home and I had to count out 65k in $100 dollar bills because the buyers did not want to use certified checks. I would have loved to count $500 bills out instead. Then had fun watching a new teller trying to check each bill with her pen when I deposited it lol.
Recently had a cash deal on a home and I had to count out 65k in $100 dollar bills because the buyers did not want to use certified checks.
How many were color and how many were green? I know that the c-note is the preferred way for many people to buy used cars in the $3K-$8K range partly because you can haggle on the price at the last minute. I was not aware that people bought old houses for cash. Frankly, I would think it is more trouble to fill out the IRS form than to get a certified check.
Japan to print additional ¥10,000 bills as more people stash their cash at home
Â¥10,000=$92
Japan circulates a huge number of these banknotes (over 70 per person). Far in excess of the 33 $100 banknotes and the 5 $50 banknotes per person circulating in the USA. Plus keep in mind that while US cash circulates widely abroad, the Japanese Yen has very limited circulation outside of the country.
Logically, Japan seems far more in need of a ¥50,000 banknote than USA seems in need of a $500 banknote. But with the central bank having a 0% interest rate, the Japanese government is even less likely to make it easier to keep large amounts of savings in cash.
Katsumasa Suzuk, a Japanese lawmaker brought up the soaring safe sales in parliament on Monday. "It suggests a vague sense of unease among the public."
To quote Tyler Durden : We're not sure "vague sense of unease" quite covers it. People are rushing to buy safes to hoard their money in because the head of the central bank has lost his mind...
Now only the 1000CHF banknote from Switzerland remains for banknotes with over 40 million in circulation
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