Hyper-Printing The $100 Federal Reserve Fiat Note vs Gold
The amount of leverage in the U.S. Dollar fiat currency system reached an all time high in 2013. Even though the growth in total U.S. currency more than doubled since the collapse of the Housing and Investment banking system in 2008, the majority of the increase was from just one bill in particular.
U.S. Department of Engraving and Printing issued more $100 Federal Reserve Notes in 2013, than in any year prior. Of course, part of the reason was due to the new $100 anti-counterfeit bill released in 2013, but the increased trend for the largest bill has been going on for decades.
This can plainly be seen in the graph below:
According to the U.S. Department of Engraving and Printing, the U.S. Treasury printed a staggering 4.4 billion of the $100 Federal Reserve Notes in 2013. This is up from a mere 323 million of $100 notes in 1993… just two decades ago.
The chart also points out the obvious, who needs $1 bills anymore…LOL?? In 1993, the U.S. Treasury printed 3.5 billion $1 Notes, but in 2013, this fell nearly in half to 1.8 billion. In order to understand the huge leverage now in the U.S. Fiat Currency System, we need to look at the following table:
In 1993, the U.S. Treasury printed a total of $104 billion worth of Federal Reserve Notes. Of this amount, the $100 bill accounted for 31% of the total at $32 billion. Then in 2003, the total amount of U.S. currency printed that year was up nearly $50 billion to $153 billion. However, the $100 bill accounted for 56% of the total.
Now, if we fast forward to 2013, not only has the overall Dollar amount in currency printed increased more than three times since 2003, the $100 bill represents a staggering 94% of the total. Basically, the U.S. Treasury has fallen in love with printing the largest denomination bill that it has in its repertoire. I would imagine, if we brought back the $500 bill, it could seriously cut down on printing costs.
As I mentioned before, part of this huge increase in $100 bill printing was to exchange the old $100 bill with the new anti-counterfeit Federal Reserve Benjamin Franklin Note. But, if we go back prior to the release of the new $100 bill, there were nearly 2 billion of the old $100 Federal Reserve Note printed in 2010.
Thus, a total of $191 billion in $100 bills were printed in 2010, representing 80% of the $240 billion in total U.S. currency issued that year. This is up from the 56% ratio of total new currency supply in 2003.
$100 Federal Reserve Note Printing vs. Gold
To get an idea of just how much monopoly money the U.S. Treasury printed via its $100 Federal Reserve Note, take a look at the following chart:
The total face value of the $100 bills printed in 2013 amounted to $443 billion. Now, compare this to the total market value of all the gold produced in the world that very same year. According to GFMS 2014 Gold Survey, the world produced 3,022 metric tons of gold in 2013.
Doing some simple arithmetic, we have the following:
3022 metric tons = 97.1 million oz X $1,411 = $137 billion.
The average price of gold in 2013 (according to Kitco.com) was $1,411 an ounce and if we multiply it by 97.1 million oz, the total market value was $137 billion. Which means, the U.S. Treasury printed more than 3 times the face value in $100 bills compared to the total market value of all the gold produced in 2013.
CONFUCIUS SAYS: It pays to have the biggest printing press in the world….
And of course the U.S. Treasury is quite proud of this achievement as their website is called none other than:
MoneyFactory.gov
LOL… I kid you not. If anyone feels inclined to verify these figures, you’re more than welcome to go to the U.S. Department of Engraving and Printing website and do so at the link above.
One more interesting TIDBIT. According to the Federal Reserve, it costs 13.1 cents to print each $100 bill. Even though the total face value of the $100 bills printed in 2013 were $443 billion, the cost was just a mere $580 million… basically one-tenth of a percent of the cost of the face value.
If we extrapolate this further, at the current price of gold (including the HUGE MOVE UP TODAY) of $1,170 an ounce, it would take twelve $100 bills to purchase an ounce of gold…. with a little change left over. However, if we compare the costs below, we can see owning PHYSICAL GOLD is a much better and safer deal when the Fiat Monetary FAN finally hits the COW EXCREMENT:
(12) $100 bills X 0.13 = $1.56
Average Production cost for gold = $1,100-1,200
When (not if) the U.S. Fiat Monetary System collapses, anyone holding onto twelve $100 Federal Reserve Notes would have a net worth of $1.56 in printing cost. Compare that to the estimated $1,100-$1,200 an ounce cost for gold.
I would bet my bottom Silver Dollar that when faith in holding U.S. Federal Reserve Notes heads into the toilet, it would be much wiser to own REAL MONEY than the monopoly paper printed by the MoneyFactory.gov.
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FROM THE ABOVE ARTICLE: “According to the Federal Reserve, it costs 13.1 cents to print each $100 bill. Even though the total face value of the $100 bills printed in 2013 were $443 billion, the cost was just a mere $580 million… basically one-tenth of a percent of the cost of the face value”
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WOW!… A COST OF JUST 13.1 CENTS TO PRODUCE A CRISP NEW $100 BILL – NOW THAT’S SOME SERIOUS INTRINSIC VALUE!, LOL.
Indeed, Steve, you ARE good at simplifying things.
Banknotes (of any country globally) are government’s tool of Labor Theft. If that 13.5 cents per 100 unit doesn’t illustrate the fact writ large, then nothing else will.
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” –Henry Ford
Sounds like the ink and paper business is booming.
Better get your wheelbarrow serviced and fitted
with The Club. Don’t bother to stock toilet paper
or kindling. We got that handled.
In baseball terms, the above article is a 500 ft home run with 2 out in a scoreless tie bottom of the 18th inning of game 7 in WS. Thanks Steve.
Just not the fiat US dollar, but virtually every other fiat currency in the world, without exception, is headed for the crapper. Case in point, the Canadian dollar.
First, doing away with the one dollar paper note, replaced by a ‘gold colored’ coin.
Second, doing away with the two dollar paper note, replaced by a two toned coin.
Thirdly, doing away with the penny, declaring it as absolutely useless, without value! Not replaced.
Fourth, doing away with paper currency altogether, replaced by plastic notes.
Next? Watch for the five dollar coin next and then a ten dollar coin. Eventually doing away with the five cent nickel, since its not made of nickle anyway! The CDN dollar is based on 100 cents. When they declare 1 cent as being useless and without value; What does that say about the currency in general?
The total amount of paper currency printed in 2013 was $473 billion. That is not really much given that the population of the US is over 300 million. Per capita, only $1,500 Dollars in paper bills were added into circulation. That is a tiny amount especially since part of that currency is just the replacement for worn out currency which is removed from circulation, destroyed and deposited into a landfill. If I remember correctly, most Dollar notes, last less than 10 years. So there is a constant need for new currency.
The same effect would also take place if Silver coins or gold coins were to replace paper currency. Silver and gold are very soft metals. They would be wearing off quickly, so a constant minting of fresh silver and gold coins would be necessary in order to keep the coin supply constant.
That’s interesting, because I have a rather large supply of 90% silver coins over 100 years old, circulated and in fine condition. Try again Troll…
2015 is the great unwind. Get ready
PRINT PRINT PRINT!!! Thanks for running the numbers!!
It seems to me that China or Russia could pull the plug at anytime?
The paper pushers will be held to account…someday!
It’s not that easy.China holds a lot of US-Bonds.USA is a big market for China.
So China wants slowly get rid of the Dollar and bonds.A Crash is not good for China too.
Don’t misunderstand me ,the Dollar is the greatest curse of human life.
Greetings from Germany.
Just the printing cost would have bought 30% of global annual gold production!
Oops, sorry I thought it said 1.37 billion gold. Disregard….
Jimbo,calling troll is a bit harsh.Replacement amounts are as yet,to me ,unknown,they could be huge,all that coke on the rolled-up twenty for eg.
The case with coins,gold anyway has been solved long ago.check the 31gms of pure gold in a 33gm Kruger for instance.The copper hardens the coin really well,and as noted above even soft silver can be around a long time,centuries even.
In Mary Elizabeth Croft’s book “How I clobbered every bureaucratic cash-confiscatory agency known to man” she states on pg.16 and pg.17:
The economics of banking is counterfeiting. We have been deceived into thinking that we were lent other depositor’s deposited funds. Banksters cause us to think that if we do not pay back those funds, the bank and its depositors will be out the cash. Remember, all you borrowed was monetized credit, which your signature created – probably about $100,000.00 – 10% of which they extended back to you. You lent yourself the funds. Why are you paying back anyone? Ask a banker about this, as I did, and watch him stop breathing.
If a counterfeiter counterfeits $$$ and lends it to us, do we have any moral or legal obligation to repay the loan? NO ! The law (statute) says counterfeiting is illegal and that we do not have to repay the counterfeiter. But the banksters are careful. The bank’s own published manual claims, “Money does not have to be issued by the government or be in any special form.” Money is anything that can be sold for cash and which the banks accept as money”. Aren’t they a riot?
The actual process of money creation takes place primarily in banks … bankers discovered that they could make loans merely by giving their promise to pay, or bank notes, to borrowers. In this way banks began to create money. Transaction deposits are the modern counterpart of bank notes. It was a small step from printing notes to making book entries crediting deposits of borrowers, which the borrowers in turn could ‘spend’ by writing checks, thereby ‘printing’ their own money. – Modern Money Mechanics, Federal Reserve Bank of Chicago
Steve, great job! Would be interesting to know how many acres of forest had to be felled to make all those bills. One could then extrapolate a biological limit to how many 100$ bills could possibly be printed… LOL. Obviously they’d introduce the 1000$ 10000$ …. and 10… ….000$ bills. But it will all collapse before that anyway. The fibre (combustion heat or @$$-wipes) is the only intrinsic value to paper $s once SHTF.
Acres of forest nil,
cotton etc linen as this quote,”While security measures and design elements have changed over the years, the 75-percent cotton and 25-percent linen formula has remained constant”
Read more : http://www.ehow.com/facts_5405383_material-used-make-paper-currency.html
The actual printing of paper currency is but a small part in the govt arsenal of creating fiat “wealth”.
Most “entitlement” payments are made with cks or debit cards, not cash.
And then there are the “biggies”, accounting book entries.
In reality each yrs created “wealth” is equal to that yrs federal deficit.
Chump change.
There are over 10-Trillion in credited deposit accounts that may require the actual notes someday.
Too bad the Fed is under no legal obligation to make any of that credit good with legal tender.
I encourage all to read G.Edward Griffin’s The Creature From Jekyll Island which tells the history of central banking in America from the beginning. Did you know that the men who came forward to join the Revolutionary Army were paid in Continentals with the never kept promise that someday the paper would be redeemable? That when the first Secretary of the Treasury, Alexander Hamilton, who did fight in the war under Washington, told the first newly elected President that he thought we needed a central bank, Washington, who presided over the Constitutional Convention, responded that he did not believe that was one of the powers granted to the Congress.
Richard H. Timberlake wrote Constitutional Money:A Review of Supreme Court Monetary Decisions which shows how those nine cases turned the meaning and vision of the Founders regarding money on its head. As you know Art 1 Section 8 grants Congress the power to coin money (not to print it) and Section 10 holds that States will use only gold and silver coins as tender for payment of debts.
Are you aware of the existence of Students For Liberty and Young Americans For Liberty which both began in 2008 and are growing rapidly if not exponentially, are allied with the pro freedom movement as weil as the Atlas Society, and they are recruiting other college students who value their freedom to become recruits too. Please consider a donation to them both for they are truly following Thomas Jefferson’s admonition: “If you think you can remain ignorant and free then you are hoping for something that never was and never will be.”
http://www.studentsforliberty.org http://www.YALiberty.org
Knowing that they exist enables me to sleep nights.
gg
Yes! and Ron and Ran Paul seem to be the only Congressmen who understand.
As the illusion and ponzi scheme unravels,my worry is about what they will come up with as a distraction. It could take many forms, none of them good.
Still we have the Problem that the silveroutput is to high.