The Value of United States Currency in Circulation

I have this theory that counterfeit money is almost ‘welcomed’ by the Guv.

Consider: You’re playing a game of Monopoly. What’s the harm if half of you get a mysterious boost in your net worth? Game continues longer than it would if you just played with what you’re meant to be allotted. More cash to pay off debts, buy houses, put up hotels, unmortgage properties. Sound too good to be true?

I would be willing to bet the farm on the fact that most countries welcome counterfeit money as a way of extending the game.

A question on US currency in circulation: what % are actually circulating in the USA? At least half the 6 billion people on this planet have some sort of US$ squirreled away somewhere, and a good number of countries peg their currency to the US$ to avoid inflation by keeping large stockpiles of US$ in the bank. I’m not sure if they keep paper currency?

So, of the $853B printed last year, how much remains in the USA?

That’s interesting, I’ve never thought of it like that at all.

The monopoly theory, I mean.

Chris, have you heard of inflation?

I’d like to see this info as of 12/31/2000, and 12/31/2009.

When will we get rid of pennies? They’re utterly useless!

numbers are in millions? does that mean there are 1.65 trillion million pennies?

Interesting thoughts Chris, and some great facts in the article! I can’t believe the life expectancy is so short on bills! No wonder the gov’t wants people to use dollar coins more!

Just a few thoughts on counterfeiting

Besides the fact that it causes inflation in the economy without adding any real value, remember that money is based on trust. Are you likely to keep playing your monopoly game if one person just “robs the bank” and dominates the game?

Furthermore, if counterfeiting was easy it would render money worthless (since it would be easier to print than to work for) and so it must be made difficult and only in reach of sophisticated criminals… Do you imagine that those are the types of people the gov’t of any country wants to have unlimited financing for other criminal activities?

Finally, the gov’t does actually print money to increase the money supply (which is exactly the effect you are imagining with counterfeiting) and in fact, the money actually printed is only a tiny portion of the amount added. You are exactly right that gov’t wants a little of that effect, but they don’t need counterfeiters to do it, they do it themselves quite well! By doing centralized “quantitative easing” the gov’t gets the benefit of every new dollar to spend while also being able to use the flow of new money as a monetary policy tool.

I think it is safe to say that no government anywhere thinks it is ok to let counterfeiting go on in their economy! If you still want to “bet the farm” though I’d be happy to take you up! (no bills please!)

@Chris G – counterfeiting doens’t work like that. The more money in circulation, the less your money is worth. Which means it becomes harder to pay off your international debt

Chris, you’re kidding, right? Comparing the economy to a game of monopoly? Your comparison assumed everyone was depleted of money (which can never happen because monopoly is a game of trading money). If you give the poorer people more money, you are basically stealing value from the other people with money. That’s what inflation is. Please read a book on the topic you are theorizing.

Chris, your theory is interesting, but there is a big flaw. In Monopoly, all of the prices and costs are fixed. But real economies are far more complicated because prices are not fixed. When there is too much cash in the system, or when resources are scarce, it causes inflation. Inflation can be a very bad thing. Purposefully floating counterfeit bills not only gives the entity floating it an unfair advantage, but as N. Korea is always trying, has the possibility of completely undermining a country’s economic planners.

Valeriob–Actually, if you think about it, the penny is very useful. Imagine buying something that turned out to be $9.91. The store would end up raising the cost to $10, and you would pay an extra 9 cents (roughly a 1% increase). This seems insignificant, but actually, you would have the stores rounding up initial costs, sales taxes raised to even amounts (10%), and then in the end rounded up a second time. This could lead to a lot of money lost, and significant inflation. It would be a nightmare.

How about getting local state heroes on US currency ? Why should it be just folks
from the original 13 states ?

@ Chris G

Also they must keep large stockpiles of US currency in their central banks to keep the peg. If they didnt have the stockpiles, they couldnt freely exchange currency which is how a peg’d exchange rate is kept. If supply of american currency was rare in a country that used our currency as a peg, the US dollar would have more value creating an arbitrage opportunity and making the peg impossible.

Chris G.

Here is the problem with your Monopoly example: the prices of buidlings and property are not a fixed price in real life.

If you add more money to the system that crappy Baltic Avenue propery now costs $1000 instead of $60.

The government is the only one that can steal value from the public by adding more money. They don’t like competition in their theiving schemes.

@Chris

Your other question about where US currency is actually a great question!

Here is an NPR story covering the issue. Quick answer is that about half is overseas and a huge proportion is “underground” to avoid paying taxes and other illicit activity.

http://www.npr.org/blogs/money/2009/01/hear_where_are_the_us_dollars.html

Answer starts around 7:40
(If the link doesn’t come through, go to NPR and search “Hear: where are the us dollars”)

If you think about it…

Do you probably have a quarter in your pocket right now? Chances are, all 300 million Americans could have a quarter in their pocket (on average) right now, making 300 million quarters currently in peoples’ pockets right now. But are there a MILLION quarters in circulation for each man, woman and child in the United States? If you take all of the rolls of quarters in the banks, stores, restaurants, and other places of business, and all of the loose coins in vending machines, piggy banks, cash registers, and city buses (ones that still take coins are getting harder and harder to find) and I don’t believe that there are more than a million coins per person out there. It just seems way too high.

The only estimates I can find on pennies in circulation are between 140 billion and 200 billion. So I believe that somehow, the infographic was mislabeled.

@Deshawn

Thinking the same thing here. Did the same exact thing as you. No way there are only 300 million quarters and no way there are 300 trillion quarters. Something’s mislabelled.

How is counterfeiting money good for the government?

Remember that our currency comprises notes from the federal reserve. Each one of these notes is basically an IOU – in fact, earlier notes actually had the text “The treasury of the US will pay to the bearer 10 dollars” or something similar. It’s the faith in the ability of our government to pay off this debt that makes money worth something.

How can forging IOU’s be good for the government? How can making fake IOU’s in anybody’s name be good for them?

To XXX:

Last I heard, Lincoln was not from one of the original 13 states. He’s on the cent and the $5 bill.

Roosevelt (on the dime) and Kennedy (on the half-dollar) were from New York and Massachusetts, respectively, but lived long after the 13 colonies became states, so their birthplaces are sort of coincidental.

Chris G.
I would definitely refer you to Federal Reserve Policy. Actually its not the US Government wanting the inflation or counterfeiting, its just that our monetary system is owned by a private bank (Federal Reserve) and they have been given their monopoly by the US Gov.

The US Gov only likes it because when they request large amounts of money, they get to use it first, before inflation hits. When the money is released into the overall money supply, it “steals” value from the money already in circulation and that is what inflation is.

If you added money to monopoly, this is exactly what would happen, prices would rise. Adding money only makes things more expensive. The real shame here is that the last person to receive the money, the employee, is the one who needs the money the most and he is the one who is hit hardest by inflation.

Money is just an exchangeable good, its value is only as good as you decide it is. If nobody wanted to use the Federal Reserve Note but rather a Euro or other currency or tender, the Federal Reserve would have no other options but to shut down.

Also a floating dollar just means that the value of it is regulated by those who feel it has value. If China and Japan pulled out of the dollar, we would have inflation (devaluation of the dollar) and other countries would surely drop it before it lost too much value and Americans would be poorer than third world.

The way to eliminate the penny is to implement the “Nickel Roundown”. They only make pennies because merchants demand them and they only need them to make change. So if Wal-Mart programed their computers to compute the sales tax to the penny and then round down the total to the nearest nickel, you would not need a penny. They can add the missing amount to their margin and adjust prices. Write letters to every big retailer to implement the “Nickel Roundown”.

The Armed Forces does not ship pennies overseas to use at the post exchanges. They round up/down to the nearest nickel. The are prices on things in pennies, but once the total bill is calculated, then it is rounded. Makes things much easier.

dont be dumb.. they would roundup if they ever implemented that.

i like how europe rely more on the high face value coin, but bills are easier to carry

I know that 100,000 bills were only bank-to-bank, but there are a few in circulation… why no mention? Woodrow Wilson would be so upset. And Franklin and Hamilton the only non presidents to appear on bills: what about Salmon P. Chase on the $10,000? Also the $500 dollar bill from 1918 contains a Portrait of John Marshall.

[...] The Value of United States Currency in Circulation HT: Visual Economics [...]

[...] Dead Presidents Everywhere: US Currency in Circulation (PIC) [...]

Re: the coin labeling

Also, the given total number of coins doesn’t add up from the individual numbers.
Either every thing except pennies should be in billions and he total stays in trillions OR pennies should be in billions and the total also comes down to billions.

I’m guessing the former is true because that would gives us each about 3,000 pennies and I think I have that many sitting in my change jar :-/

How were the paper money figures calculated? Did you count the number of each bill ever issued and subtract the number retired? Did you survey people and ask how much they were holding? How could you adjust for bills that were lost?

“Ryan” and “bob c is an idiot”-

Here in Australia, the penny was taken out of circulation in 1992. Rounding is done to the nearest 5 cents, either up or down. So if your purchase total comes to $3.12, you pay $3.10. If your total comes to $3.14, you pay $3.15.

US studies have shown that rounding is neutral: http://www.wfu.edu/wfunews/2006/2006.07.18.w.html & http://www.retirethepenny.org/myths.html

In addition, now that the cost of manufacturing a US penny is about 1.7 cents, the treasury actually loses about $50 million per year in manufacturing alone according to the New Yorker: http://www.newyorker.com/reporting/2008/03/31/080331fa_fact_owen?currentPage=1 . Whaples estimates $900 million per year in production and handling.

Were there a lot of problems in the US when they removed the halfcent from circulation in the 1850s? Or the mill?

“bob c is an idiot”-

Found the name of the rounding we do in Australia since decimalization of the penny, it’s called “Swedish Rounding”: http://en.wikipedia.org/wiki/Swedish_rounding

Since the rounding is symmetrical, sellers would not be able to gain money by always rounding up.

It’s not the same as the “Nickel Roundown” that “bob c” suggests, but that does not make him dumb or an idiot either. It just makes you sound rude.

I’ll take all the pennies if nobody wants them.

[...] Ever wonder just how much American money is in circulation? I do. I also would like to know the breakdown of exactly how many of each denomination make up that currency total. Hey, what do you know. [...]

This chart is hard to understand, the top part is circulating currency, and the second part is coin production for 2009 only.

I had to make a separate spreadsheet to look at better information. It amounts to about $55.00 in pennies for each person in the USA and 5-6 nickels, dimes and quarters produced for each person in 2009 only.

All together there is about $2800 in circulating currency for each citizen of the US (total) and about $2800 in coin made in 2009 for each citizen. This does not include previous coins made, many of which are still in circulation. Nickels from 1938 are still circulating. Dimes and Quarters from 1965. Halfs from 1972.

Pennies dated from 1981 and before are fast disappearing.

Coin dollars are mainly used as change at post office vending machines.

** just a few comments, hope this helps clarify things.

[...] “The Value of United States Currency in Circulation” [Visual Economics] [...]

[...] Value of United States Currency in Circulation http://www.visualeconomics.com/the-v…n-circulation/ If the chart is correct: * Theirs more Benjamins than Georges. * We really need to get rid of [...]

[...] Visual Economics posted this infographic that shows the value of U.S. currency currently in circulation. The graphic also shows the life expectancy of each denomination of bills and it turns out that the $100 bill lasts about 7 years before being replaced. [...]

The reason pennies made prior to 1982 are disappearing is that they were made of a composition containing 95% copper with only 5% other metals such as zinc and/or tin. After 1982 they have been made with primarily zinc and just a small (approximately 2.5%) amount of copper. Which one do you think has greater value?

[...] me the money By jeffbowers This chart shows how much U.S. currency is in circulation today, each bill and [...]

I hate going to the US because of their $1 bills. You’ll think you’re rich because your wallet is overflowing with bills, but it’s just $10 worth of $1 bills. lol And why does American money all look the same? It’s such ugly money!

[...] the cash that’s fit to print Jump to Comments Courtesy of Visual Economics, this chart shows how much money is in circulation by type, and each bill’s life expectancy. [...]

[...] CLICK HERE FOR THE FULL GRAPH [...]

Dollar Coin: Most dollar coins are NOT used in postal stamp machines, the post office has removed stamp machines that take cash. Most dollar coins are used in Central/South America. Equador is the biggest user of US dollar coins.

High denomination bills: Circulation means you can get them from a bank. They are not mentioned because they are not in circulation. $100,000 bills are either in the Smithsonian or have been destroyed. They have never been in public hands. $1000 and $500 bills havn’t been made since the 30′s and havn’t ciruclated since at least the 60′s. If you were actually able to get one from a bank, you’d be lucky as it could be sold for 2-4 times face. They also didn’t mention 2,3,20 cent, $1,$2,$2.50, $3, $5,$10, $20 coins because they don’t circulate.

Emiminate the 1 cent coin: Eliminating the coin doesn’t mean that we eliminate the denomination. Credit card transactions, debit card transactions, direct withdrawels, direct deposits, checks, etc all could still be carried out to the cent. Cash transactions (a small percentage of the total) could be rounded. We got rid of the mil tax tokens (1/10 cent) and now sales tax is rounded. No one ever notices that.

Money backed by nothing is most likely nothing. This country would not be so far in debt, if it was on the “GOLD” system. Money backed by a precious metal. Not a politicians check book would make us a stronger monetary system.

I took in one $1,000 bill when I was a teller. Our standing instructions were to take them out of circulation. I remember how nervous I was sending it interoffice to our central office.

Also, I found a few counterfeits in my day. Once a man came in to deposit $2,400. He left with a deposit slip for $800 and a form that would allow him to write off the 16 fake Benjamins on his taxes. Poor old Italian guy, he didn’t speak much English and wasn’t too sure what was going on.

Whenever we found counterfeits, the Secret Service would visit and inspect the bills. I don’t think there was much they could do beyond that.

ok guys. Everyone knows chris g is completely wrong. stop wasting time writing him essays on the basic principles of economics…

[...] that I think about it, I think of things like this all the time. Regardless, I found a guide to the money in our country and how much of it is in circulation. Might make you think twice about picking up those pennies [...]

Does anybody know if these nubmers include US currency that is in circulation abroad? It seems that there is a lot of US currency being hoarded overseas because it is safer or more convenient than other currencies or gold, diamonds, etc.
Please email me if you have the correct answer: dthiers106@aol.com

Is it possible that the government could have purposely caused the recession to attract all the money in peoples savings? some of you talk about inflation, wouldnt it kill the economy if everyone spent their savings on top of the money already put in circulation? i dont know much, just curious.

Quite simply, this is the root cause of all the financial problems in the world today. All countries are forced to devalue their currency because of the G8. It’s done by printing up more and more paper currency and issuing more and more fiat bogus bank credit each year. The sheer volume of paper currency and fiat bank credit has steadily increased year after year for decades. It’s like a big tank of milk that’s been watered down again and again, so that today it has almost no “nutritional” value (purchasing power). Each time you have to have more and more of this “milk” to get the same “nutrition” (purchasing power) as you did before. The real purpose of the big G8 and G20 summits is so the conniving leaders of the various world gov’ts can devalue their respective currencies in lockstep so the general public will not catch on to how vast the devaluation and ruin of their purchasing power really is. This is why the meetings are secret. It’s all done to keep the bums running the gov’ts of the world rolling in dough. It is greatest organized fraud on the working masses in the history of world.

[...] http://www.visualeconomics.com/the-value-of-united-states-currency-in-circulation/ [...]

people should trade in resources rather then cash. Lumber, precious metal, food, clothe, and so on. These things all have true value. Further more, government should be abolished, and at most a tribal anarchy to replace it. Small communities to trade with other small communities, where everyone is equally involved, while each community maintains complete control over its own resources.

Thats why im stocking up on gold silver and coppper