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How Can We Increase Circulation Of The $50

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 Posted 07/28/2020  11:22 am  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply



The Federal Reserve has been making ridiculously small orders for the $50 banknote going back decades (see narrow purple band).

Rather than keeping on making these token orders for the $50 denomination, perhaps they should go with a new polymer note and try the vertical design which is becoming popular around the world.

But we started printing the color $100 note after January 2010, and total production after 10 years was 13.2608 billion color $100 notes. Total circulation of $100 as 1 January 2020 is 14.247 billion so there is still a billion green notes left.

But with the next series the majority of notes will need to be replaced within a few months of issue day. That is going to be a huge logistics challenge without another denomination to partly take up the slack.
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 Posted 07/28/2020  1:23 pm  Show Profile   Bookmark this reply Add SteveInTampa to your friends list Get a Link to this Reply
The American public wants what it wants. The game of soccer is loved around the world, but not so much here. Americans love their dollar bills. Whereas some countries use a dollar coin...Americans rejected the dollar coin. As a collector, I'm not sure exactly what the purpose of this thread is. We, as collectors, do not make policy and only makeup a minuscule portion of the population. I appreciate all of the time and effort needed to post all the facts and graphs needed to support your opinion, but I'm finding it harder and harder to figure out what this all has to do with the hobby of collecting US paper money.
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 Posted 07/28/2020  3:58 pm  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
I'm finding it harder and harder to figure out what this all has to do with the hobby of collecting US paper money.
My takeaway...

What is printed ultimately affects what we collect because we can only collect what has been printed.

I supposed how it relates to our hobby is really up to the reader and how they approach their collecting. I find it somewhat interesting myself.
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 Posted 07/28/2020  4:25 pm  Show Profile   Bookmark this reply Add SteveInTampa to your friends list Get a Link to this Reply

Quote:
What is printed ultimately affects what we collect because we can only collect what has been printed.

Good to know....
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United States
390 Posts
 Posted 07/28/2020  5:17 pm  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply

Quote:
jbuck | Moderator
I supposed how it relates to our hobby is really up to the reader and how they approach their collecting. I find it somewhat interesting myself.


It would seem to me that most collectors would have a side interest in the politics of money and in the business of producing banknotes and coins.

Look at Sweden, for instance. Sweden buys their banknotes from Britain or France since they can no longer support their own operations to make so few notes. Only the banknote closest to $50 is increasing in circulation since it is used in ATMS.

Swedish	:	2.5 yrs	:	  US xchange
  20 kr	:	- 1.29%	:	  $2.28 (one of last European countries where this denomination is not a coin)
  50 kr	:	- 5.13%	:	  $5.69 (less than 2 notes per person)
 100 kr	:	- 2.82%	:	 $11.39 (less than 3 notes per person)
 200 kr	:	-16.18%	:	 $22.78 (less than 3 notes per person)
 500 kr	:	+33.48%	:	 $56.95 (8-9 notes per person)
1000 kr	:	-16.15%	:	$113.90 (only circulated in token amounts)

Perhaps Sweden will only produce the 500kr ~ $50 banknote in the future. It could create coins for the three smallest denomination. The 100kr coin would be the most valuable fiat coin in the world, but it would mean cash has a "medieval" feeling to it, as you would put your money in a purse.

It might be a way to sentimentally acknowledge their past as they plunge into a largely cashless future. The purists or tourists would still have the option of going to an ATM and getting 500kr banknotes but if they want change it will either be cyphers on a card or phone app or you would get coins.
Edited by PacoMartin
07/28/2020 6:48 pm
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 Posted 07/28/2020  10:25 pm  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
I should mention that this obsession with the $100 over the $50 is relatively new. As recently as fiscal year 1998 the BEP produced nearly the same number of $50 and $100 banknotes. Since then the $50 has been relegated to obscurity, and actually none were printed for six years out of a run of eleven years.

The FED (and most other central banks) always claim that they produce cash not to meet an ideology, but to match consumer demand. I am curious as to what happened in the 1990s that made people detest the $50 so much and desire the $100?

I think it was the song "It's All About the Benjamins" by Puff Daddy, released in 1996. The Notorious B.I.G. used the slang on his debut album Ready to Die in 1994. Fiscal year 1996 was when the big-headed Benjamin banknotes first appeared.

I've always heard that gamblers consider the $50 to be bad luck, but I have never been able to find the origin of that belief.

A friend of mine said that a $50 seem more annoying for normal spending as shopkeepers are more concerned about counterfeits. But if you want to carry serious money, then you always want the $100.
Edited by PacoMartin
07/28/2020 10:30 pm
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 Posted 08/01/2020  05:58 am  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
A big factor was the so called super-note, an extraordinaty high quality $100 counterfeit discovered in Manila in 1989

The $100 banknotes from the 1990 and 1993 series contained a security thread and microprinting (2.4 billion produced). The next series upped the security game with the "big-headed" $100 banknotes in 1996. The relatively small number of "small-headed" $100 notes with security thread and microprinting were easily replaced.

The distribution of the big headed $100 Benjamins starting in 1996 actually made some media stories because of the difficulty of setting up places to exchange notes in places like Russia where millions of savings accounts were in $100 banknotes.

It was around this time that BEP began basically printing only enough "big headed" $50 banknotes to replace worn out notes. The number of $50 banknotes in circulation was the same in 1999 as it was 9 years later in 2008. Color $50 notes began in series 2004.

As the number of $50 banknotes in circulation began to dwindle and get closer to the $2 banknotes in circulation, it became harder and harder to replace the growing billions of $100 notes.

As I said before the introduction of the color $100 note was the biggest disaster ever to face the BEP. By some calculations an extra 8 billion green $100 banknotes was printed because of delays in the color production.
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 Posted 08/01/2020  10:21 am  Show Profile   Bookmark this reply Add redlock to your friends list Get a Link to this Reply
It's a bit off-topic.
Yet I am sure PacoMartin has read the reports that Brazil will begin issuing printing a 200 Real banknote this August. Issuing will gradually occur during the rest of the year.
Because of the pandemic Brazilians have withdrawn lots of cash from their accounts. The cash in circulation figures began to rise in March (start of the pandemic in Brazil) quite dramatically. Sure, the introduction of the 200 Real note had to been planned quite some time ago. But Brazil's central bank has found it necessary to introduce the banknote now. 450 Million are currently planned.
Edited by redlock
08/02/2020 02:14 am
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United States
390 Posts
 Posted 08/01/2020  2:07 pm  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
The need for a 200 Real note in Brazil to supplement the 100 Real is not far off-topic. What the US really needs to do is add a $200 note. But this thread assumes that a $200 banknote would be difficult politically, so the next best thing would be to revive the struggling $50.

Mar 25, 1996 new "big headed" $100 banknotes introduced
Oct 27, 1997 new "big headed" $50 banknotes introduced
Sep 28, 2004 new "colorized" $50 banknotes introduced
Oct 8, 2013 new "colorized" $100 banknotes introduced

While the $100 was always more popular than the $50, the new design of the US currency marked the ascension of the $100 and the near static levels of circulation of the $50.

Value of $50 banknotes in circulation
None produced in fiscal years 2000, 2001, 2002, 2006, 2008, & 2010
2019 $92.3 billion
2008 $64.7 billion
1999 $64.7 billion

Value of $100 banknotes in circulation
2019 $1424.7 billion
2008 $625.0 billion
1999 $386.2 billion
Edited by PacoMartin
08/01/2020 2:53 pm
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 Posted 08/02/2020  10:07 am  Show Profile   Bookmark this reply Add techwriter to your friends list Get a Link to this Reply
maybe if our $50 looked like these they might circulate more frequently:




or maybe like this:


Edited by techwriter
08/02/2020 10:14 am
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 Posted 08/02/2020  10:38 pm  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply

Quote:
techwriterPillar of the Community: maybe if our $50 looked like these they might circulate more frequently:

Those banknotes are very beautiful, BTW.

Central Banks always say they print currency to meet demand. But printing currency is not like selling chocolate chip cookies. The FED puts in one order a year, which it may modify infrequently (an extra billion banknotes was ordered in April of this year because COVID-19 increased the demand for cash).

I put in a table the number of banknotes printed (in billions) since the mid 1990's when the big heads were introduced through end of 2019. The second column of number is the number circulating at the end of 2019.

billion	den.	circulating
 19.91	  $5	 3.16
 10.57	 $10	 2.09
 39.35	 $20	 9.53
  5.47	 $50	 1.85
 29.57	$100	14.25
104.87	total	30.87

You wonder how much of it is strictly consumer demand, and how much is edict by the FED since it is easier to produce fewer $100 banknotes.

If the true reason is that the BEP wants to make better use out of the machines it already owns without buying more expensive machinery, than it is pointless about talking about increasing demand.
Edited by PacoMartin
08/03/2020 12:06 pm
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 Posted 08/03/2020  11:25 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
maybe if our $50 looked like these they might circulate more frequently... or maybe like this...
Pillar of the Community
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 Posted 08/03/2020  12:08 pm  Show Profile   Bookmark this reply Add SteveInTampa to your friends list Get a Link to this Reply
I think it has ZERO to do with aesthetics. Our $50 looks fine.
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United States
390 Posts
 Posted 08/08/2020  02:56 am  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
USA Distribution of Banknotes per person | % by Value
$100	41.0	81.1%
$50	 5.4	 5.4%
$20	28.8	11.4%
$10	 6.1	 1.2%
$ 5	 9.4	 0.9%
total	90.7


If there was some way to get Americans to use the $20 and $50 in equal measures the equivalent amount of cash would be a dozen $20s and a dozen $50s in circulation (per person).

That might satisfy the domestic need for large notes while the BEP scrambles to replace the international use of the $100 banknotes.

However, I think we really need a $200 bill to match the Euro Area.
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 Posted 08/10/2020  11:24 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
However, I think we really need a $200 bill to match the Euro Area.
I do not use the $100, I doubt I would ever see a $200.

However, I am going to go out of my way to find some $50s the next time I get cash.

Not sure when that will be though. 2021?
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