Question About Foreign Users Of Usd

Have yet to find proof to back this up but it's been said there is more US notes all over the world then there is in the US

But I'm assuming half of it's counterfeit anyways

I understand that they hold reserves, but reserves are usually in the form of TNotes or electronic reserves/securities. What I'm curious of is, since these states do not have authority to manufacture their own coins and notes, do they just make an exchange from their reserves to the Fed for coins and notes for circulation?

In the US the Fed manages circulation by holding domestic banks' reserves, but how does this work when the circulating entity is another government rather than a regulated domestic bank? I would assume that the foreign country has to work with the Fed and Treasury to coordinate this as the transfer of a large amount of foreign-manufactured circulating currency can't be a simple logistical task.

The second part of my question was related to a story I read that Ecuador had large circulation of the Dollar coin and I was curious how much demand this was absorbing both for that specific specie and for others that are used by Dollar-circulating non-US countries.

They don't use actual US bills and coins there do they? I always assumed that they had their own currency, only its value was tied to the USD. (Ex. 1 Panama Dollar = X GB pounds & also 1 USD = X GB pounds) Is this incorrect?

It depends on the country. Some use actual US coins and notes (such as Ecuador, where your much-despised dollar coins are happily circulating). East Timor uses US paper money, but has their own circulating coinage, denominated in centavos; I believe Ecuador does likewise.

Other countries have tied their currency to the US dollar at a 1:1 ratio, so US$1 equals 1 whatzit locally (the Bermudan dollar is a good example of this).

Still other countries are pegged at other rates. The Saudi Arabian riyal is pegged at SR3.75 : US$1. In El Salvador, the colon is pegged at C8.75 : US$1 but in practice, only the US dollar can be found on the streets.

Most other currencies are free-floating; their value in US dollars goes up and down with the changing circumstances of the economies of the two countries.


I assume that what you're interested in here is, "Were there any entire batches of US coins or notes that were shipped overseas, making them rare here at home but common elsewhere?".

I'm not aware of this occurring. The US economy is so large, it needs the Mint and the Federal Reserve to be constantly churning out new coins and notes, to replace old and damaged ones. Foreign demand would be only a tiny fraction of this amount.

But that doesn't mean it can't happen. It's certainly happened in the British coin series, back when Britain owned an economic empire; for example, the entire mintage of 1950 and 1951 British pennies were shipped off for use on the British colony of Bermuda. They're fairly common in the US (and presumably on Bermuda) but very rarely seen in Britain itself.

I believe the US Mint mints coins for Panama. The coins are the same weight, diameter and composition, but with different designs. My coin dealer got two Panama dimes and I told him they were the exact same weight as our coins. He said, well I will just spend them at the coke machine.

This may somewhat answer if the US control the amount coins are minted. I don't think minting a few extra coins considering Panama has a way smaller population of about 3.3Million.

http://www.panama-guide.com/article...001030/print