Is cash the RIP currency?
By Dian Vujovich
I had an uncle who used to carry around a big fat wad of money in his pocket. It would have been great if that had-to-be three-inch roll were made up of Benjamin’s but it wasn’t. It was a Chicago roll. Remember them? In case you’ve forgotten, that’s when the outside paper bills were of a much larger denomination than all the others behind it—in this case they were $1 bills.
Seeing a lot of money in one spot, whether it’s in a Chicago roll, hidden in a suitcase or stuffed in coffee cans is a sight one doesn’t forget. After all, cash does have the reputation of being king and from where I sit always will have. In other words, I doubt our currency is likely to go the way of Confederate currency anytime soon.
That said, they ain’t making it like they used to.
It’s the Federal Reserve that issues our US dollars and currently does so in seven different denominations: $1, $2, $5, $10, $20, $50 and $100 bills.
As an aside, at one time our currency came in much larger denominations of $10,000, $5,000, and $1,000 notes. They, however, have been taken out of circulation and by the end of May 2009, Wikipedia reports that there were only 336 known $10,000 bills around; 342 bills of the $5,000 flavor; and 165,372 remaining $1,000 bills. All worth much more than their face value today because of their rarity.
Back to our lonely seven.
Apparently, those of us in the United States prefer paying for things with plastic rather than cash these days— which sort of runs contrary to all the don’t-use-your-credit-cards philosophy. Then again, the money world in America has always been filled with contradictions.
Also, our money is lasting longer than it used to. Lasting in this instance means the bills aren’t physically falling apart as fast as they used to—not lasting as in buying more with fewer bills required. According to the Federal Reserve, because of modern technology, the typical $1 bill circulates for about 40 months. Twenty years ago it had a life span of 18 months.
And in spite of all the we’re printing too much money talk, printing money can be a big money maker.
According to a July 6, 2011 Yahoo! Finance New York Times story: “Currency is printed by the Treasury and issued by the Federal Reserve. The central bank pays the Treasury for the cost of production — about 10 cents a note — then exchanges the notes at face value for securities that pay interest. The more money it issues, the more interest it earns. And each year the Fed returns to the Treasury a windfall called a seigniorage payment, which last year exceeded $20 billion
The other side to this story is gift cards, as well as the use of plastic, have become more and more popular in the US. Even so, they don’t top the wanna-have popularity of a $100 bill whether it’s part of a Chicago roll or on its own.
So don’t kiss the king good-by just yet. There’s plenty of life left in our bills—literally and figuratively.
Read, “As Plastic Reigns, the Treasury Slows Its Printing Presses” at http://tinyurl.com/432obmf
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