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The amount of $100 bills in circulation is surging. And it's leaving some economists scratching their heads.
The number of outstanding U.S. $100 bills has doubled since the financial crisis, with more than 12 billion of them across the world, according to the latest data from the Federal Reserve. C-notes have passed $1 bills in circulation, Deutsche Bank chief international economist Torsten Slok said in a note to clients this week.
[...] "By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption," [former Standard Chartered bank chief executive Peter] Sands wrote.
The global illicit money flows were "staggering" and fuel crimes from drug trafficking and human smuggling to theft and fraud, Sands said. He estimated that depending on the country, tax evasion robs the public sector of anywhere between 6 percent and 70 percent of what authorities estimate they should be collecting. And despite "huge investments in transaction surveillance systems, and intelligence, less than 1 percent of illicit financial flows are seized.
[...] "The Federal Reserve and Treasury make 99 dollars for every $100 dollar bill they print and sell offshore," Colas said. "There's a natural desire to keep printing these things — the U.S. government makes a lot of money selling them."
Superbills?
https://en.m.wikipedia.org/wiki/Superdollar
(Score: 4, Informative) by Runaway1956 on Friday March 01 2019, @03:58PM (4 children)
That wasn't the impression I got at all. People who have been hoarding $100 notes are suddenly putting them back into circulation. The question is, "Why?" Apparently, the hoarders are losing faith in the Federal Reserve Dollar. If people start demanding Greenbacks, or similar, that will clinch it. No faith in the Federal Reserve.
(Score: 2) by AthanasiusKircher on Friday March 01 2019, @04:16PM (2 children)
Try reading again. That is NOT what's happening. The amount "in circulation" is simply the number that have been printed by the Treasury and have not been returned to the Treasury for destruction (for bills that are too worn, very damaged, etc.).
TFA says the Treasury has been printing more and more $100 bills, and they haven't been returning. So, they're out there. Unless someone is burning up $100 bills in 55-gallon drums somewhere, chances are either (1) hoarding is increasing, or (2) most of these are still being used both inside and outside the U.S. in illicit transactions, or both.
Not even close. If anything, this indicates more use of the dollar, which frankly, I find a bit surprising. (Though I shouldn't be surprised: even when the U.S. was threatening to not uphold its financial commitments a few years back, T-note auctions indicated steady or even increased demand for dollars. It's all irrational.)
(Score: 2) by Unixnut on Friday March 01 2019, @04:50PM (1 child)
> Not even close. If anything, this indicates more use of the dollar, which frankly, I find a bit surprising.
Well, seeing as every single country that tried to move away from the dollar got some "humanitarian bombing", it doesn't surprise me at all. Off the top of my head:
Attempted:
Iraq - in 2003, Saddam decides to stop selling Oil in USD and switch to Euro. Result - bombed and overthrown, Saddam hanged by the US installed government.
Syria - in 2006, Assad decides to switch away from USD to EUR for all trade. Result - bombed, but Russia and China step in to stop the overthrow. However the country has been pretty much destroyed and will take a generation of hard work at least to bring back to pre-war life, if divisions can ever really be healed post conflict.
Libya - in 2011, Gadaffi decides to move away from USD and form a gold backed Dinar as a common currency for the African Union. Result - bombed, overthrown, Gadaffi sodomised to death with a machete
In progress:
Venezuela - Maduro to move away from trading oil in USD, and to towards currency swaps, and/or Petro crypto currency. Result: overthrow in progress, no certainty of success at the moment
Maybe:
Iran - Attempting to move off USD, but has not fully done so (despite sanctions). Attempting to make use of non USD trading through the EU clearing house in Euros, but the US is threatening to sanction any EU country that trades with Iran. US has made plenty of threats and plans to bomb Iran and overthrow the government, but have yet to actually do it. Seem to be considering giving nukes to Saudi Arabia, maybe let them and Israel do the dirty work?
A bit too big to swallow:
Russia - Moving away from USD for trade, primarily currency swaps and gold swaps. Result: Has nuclear weapons, so a bit tricky to bomb and overthrow. However constant demonisation and attempts to sanction and isolate them until they fold is being attempted
China - Moving away from USD for trade, primarily currency swaps and gold swaps. Result: Has nuclear weapons, so a bit tricky to bomb and overthrow. However constant demonisation and attempts to sanction and isolate them until they fold is being attempted
Moral of the story? Don't even think of moving off the USD unless you got a large nuclear arsenal. As that is only 5 countries on earth, of which 3 (US, UK, France) are allies, it isn't surprising most others just shut up and accept whatever they are told to. However if other smaller countries start joining things like the Eurasian Union, the SCO or CSTO, then they can consider dumping the USD without getting destroyed in the process. At that point, you will see a large increase of USD in circulation, as people start dumping them for hard assets or other currency.
(Score: 2) by AthanasiusKircher on Saturday March 02 2019, @02:47AM
Can no one here read? If your scenario came true and people dumped their U.S. cash, there would be LESS cash "in circulation" according to TFA, because the Treasury would stop printing money and the number of old bills destroyed when returned to the Treasury would exceed new production, due to increased demand.
Some of you seem to read "in circulation" as though it means people are running around actively throwing these bills around. That's not what the term means in reference to currency. Bills "in circulation" are opposed to bills that are pulled out for the Treasury for destruction and/or held in reserve by the Treasury for future release.
If there are more bills in circulation -- again, that just means "not contained within the Treasury" -- without apparent increase in economic activity to justify it, it means people are holding onto and hoarding dollars (or using then for illicit or foreign transactions).
(Score: 2) by krishnoid on Friday March 01 2019, @11:32PM
Um, no. Cassette tapes, vinyl, handlebar mustaches, fixies, and now paper money ... the whole driver behind this was obvious to me as soon as I read the headline.