U.S. FIAT MONETARY SCAM: $100 Bill vs Gold

The biggest scam in history continues as the U.S. Department of Treasury Bureau of Printing and Engraving floods the world with worthless fiat currency.  Of course, all countries now have fiat currencies, however the U.S. Federal Reserve Note is still the world’s reserve currency.

The growth of U.S. currency in circulation has been considerable over the past twenty years.  According to the Federal Reserve Statistical Release, the total value of Federal Reserve Notes in circulation jumped from $423 billion in 1996 to $1.38 trillion as of October 8th, 2015. This was a staggering 228% increase even though the population of the United States only increased 21% during the same time period.

The huge increase of U.S. currency in circulation over this twenty-year period was due to two reasons:

  1. Under reporting inflation, thus leading to a larger amount of currency in circulation
  2. the exporting of U.S. Dollar’s (and U.S. inflation) overseas where a larger percentage is held in foreign hands.

To get an idea of the breakdown in U.S. currency in circulation, let’s look at the following chart from Statista 2015:

Federal-Reserve-Notes-In-Circulation

As we can see, the $100 bill accounts for $1,014 billion (78%) of the total $1,341 billion of Federal Reserve Notes in circulation. The data in this chart was complied on Dec 31st, 2014.  Over the past eight months, total U.S. currency in circulation grew an additional $47 billion to $1,388 billion ($1.38 trillion).

Looks like business is doing very well for the folks at the U.S. Department of Treasury Bureau of Engraving and Printing.  Why would the world need an extra $47 billion of Federal Reserve Notes if economic activity has been declining??  Maybe Americans and especially foreigners prefer real cash in hand, or it could be due to the continued debasement of the almighty Dollar.

U.S. $100 Dollar Printing vs Gold Production

To get an idea just how worthless U.S. currency is compared to gold, let’s focus on the $100 bill.  Again, the $100 billion represents 78% of all outstanding Federal Reserve Notes in circulation.

Total world gold production during the first six months of the year was 48.7 million oz (Moz)–World Gold Council Q2 2015 Gold Demand Trends.  Compare this to the total 562 million $100 bills printed by U.S. Treasury during the same time period. Thus, the total value of $100 bills printed JAN-JUN 2015 was $56.2 billion versus the total market value of gold production of $58.7 billion.

So, here we can see that the face value (market value) of these two currencies were about same.  However, the cost of production were drastically different:

$100-Dollar-Printing-vs-Gold-Production-Jan-Jun-2015

If we assume the U.S. gold industry’s average cost of production is $1,050 an ounce, total cost to produce the 48.7 Moz was $51.2 billion.  Now, according to the Federal Reserve, the cost to produce a new $100 bill is 12.3 cents a note.  Thus, the total $56.2 billion face value of $100 bills cost a lousy $69.1 million to print.

While it’s true that the Federal Reserve collects older worn-out bills and exchanges them with freshly minted bills, total U.S. currency in circulation grew $47 billion in the first eight months of the year… with the majority being $100 bills.

Furthermore, the Federal Reserve stated this about its 2015 Fiscal Year currency print order for the U.S. Treasury:

The estimated number of notes that Reserve Banks will destroy accounts for nearly 85 percent of the proposed FY 2015 print order and includes both unfit currency, as well as all old-design $100 notes received from circulation.

The Federal Reserve will receive $188.5 billion (nearly 70% as $100 bills) in new U.S. bills from the Treasury Fiscal Year 2015.  If the Federal Reserve will only destroy 85% of old notes, this leaves an extra $28 billion notes left over.  However, total currency in circulation has already grown by $47 billion JAN-SEP 2015.

For some strange reason, the numbers don’t jive.  Either way, the Federal Reserve continues to add increasing worthless fiat currency at a cost of 12.3 cents each $100 note.  Thus, the $56.2 billion of $100 bills printed in the first six months of 2015 cost the Federal Reserve $69.1 million compared to the estimated $51.2 billion to produce total world gold production.

Which means, (12) $100 bills (12.3 cents each) cost the Federal Reserve a total of $1.48, compared to an ounce of gold at $1,050.  An individual can take those (12) $100 bills and purchase an ounce of gold now valued at $1,160.  As we can see, the Federal Reserve is the clear winner as cheapest producer of currency by a wide margin compared to gold.

In addition, the Federal Reserve won’t have to exchange as many $100 bills in the future as the estimated lifespan of the $100 note is 15 years:

U.S.-Federal-Reserve-Notes-Lifespan

The double asterisk on the new $100 bills states the Federal Reserve does not yet have an estimated lifespan due to the new anti-counterfeit bill that was released on Oct, 2013.   That being said, I would imagine the new $100 bill was designed to last similar to the 15 year lifespan of the old bill.

Regardless, the Federal Reserve continues to add more fiat currency into the world at a fraction of the cost compared to new gold supply–which has a 2,000 year history as real money.  Knowing this, Chinese and Russian Central Banks continue to purchase and add gold to their official reserves.

When the BRICS countries (Brazil, Russia, India, China & South Africa) complete their new trade settlement system, this will put a serious hurt on the perceived value of the U.S. Dollar.  This is precisely why it is wise to own physical gold and silver assets outside the banking system.  If you own paper gold or silver located at a bank vault, chances are the metal may not be there when you finally ask for it.

Time to make sure you own the REAL MONEY.

——————-

If you haven’t checked out THE SILVER CHART REPORT, there’s a great deal of information on the Silver Industry & Market not found in any single publication on the internet. There is one chart in this report (Chart #19) that I can guarantee that 99.9% of precious metal investors haven’t seen before.

I use this bird’s-eye approach when I create my easy to understand charts. The Silver Chart Report is a collection of my top silver charts from articles published over the past six years, and includes in-depth, never-before-seen charts and content that indicate that silver is on the rise. There are 48 charts in the report, broken down in five sections.

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keep simple
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keep simple
jondo
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jondo

How do we know if these outfits are giving us the right amount of gold or silver for our dollars. The name of America now is Greed from the top down has made everybody dishonest.You just cant trust anyone especially if the government is involved, The banks are already stealing our money by not paying interest on our savings but they charge a fortune when they loan it out, I also hear thr getting ready to start charging us to keep our savings in thr banks.One reason i dont buy gold or silver is i guess you keep it at… Read more »

Robert Belzer
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Robert Belzer

There are some good psychiatric PhD’s that can help calm you down. Look up some that specialize in paranoia.

houtskool
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houtskool

As long as wages become inflation adjusted too, to compensate for rising prices that are needed to pay for the interest of ever growing debt, there’s no problem; bringing forth consumption is the game. However, greed in big finance circles and their frontrunners, multinationals with a ‘ticker’, undermines fundamentals in this game of infinite growth… The new game was financial engineering; infinite growth to continue. Until 90% debt/gdp became 300% debt/gdp. They invented a new game; the $555 trillion derivatives ‘portfolio’; always nice to have some backup in paper promises, isn’t it? Pushed down your throat by hft algo’s and… Read more »

Mike
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Mike

“As long as wages become inflation adjusted too, to compensate for rising prices that are needed to pay for the interest of ever growing debt, there’s no problem” If that were true then Zimbabwe would have been just fine. 1) it is hard to move in and out of the currency on a small scale. Most Americans using the currency as a savings vehicle. As insane as that may be it is often the only choice. The overhead of moving between dollars and real assets with each paycheck is too high. 2) As prices rise faster people become aware and… Read more »

Bonifaci
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Bonifaci
Bonifaci
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Bonifaci

Pasted wrong link 🙁

Steve how do I get a user in your site so I can fix when i post the wrong link????

Barry
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Barry

Don’t forget about the digital / electronic money created on a computer with no cash being printed. That is 10 billion a week or more from the last article I read.

Kent
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Kent

I don’t believe the “total $1,341 billion of Federal Reserve Notes in circulation” number. If only 100 million Americans had any dollars at all this would average out to $13 per person. Really?

Mike
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Mike

No, it would be $13,410 per person. But remember that slightly more than half those notes are held overseas.

Mike

silverfreaky
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silverfreaky

For Money we do anything.The dance around the golden calf. Here an example what happens behind the scenes.This happens not only here: Fission Uranium dissidents look to stop Denison merger Fission Uranium dissidents look to stop Denison merger 2015-10-07 11:56 ET – News Release An anonymous member of FCU Oversight reports FCU OVERSIGHT CONCERNED SHAREHOLDERS OF FISSION URANIUM CORP. FCU Oversight comprises a growing number of Fission Uranium Corp. shareholders, who are thoughtfully and intelligently engaged in the company’s business. FCU Oversight is recommending that you vote no to the proposed transaction announced July 6, 2015, between Fission Uranium and… Read more »

Joe Lindell
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Joe Lindell

What is this constant attack against our “worthless fiat currency”? You are getting more and more like those useless gurus i.e. Morgan, Schiff, Butler etc. What currency is better; the Yen, Yuan, Peso or pound? 99% of the US population doesn’t have any gold or silver. If the so called “fiat useless” currency fails what is left? A country in chaotic riots. I’d like to see you going to buy a loaf of bread when the currency collapses to zero as you keep saying with one silver ounce. The riots alone will destroy everything. The true perspective is the currency… Read more »

Bonifaci
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Bonifaci

Go show your silver to a riot, see how long you live…

OutLookingIn
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OutLookingIn

WHY THE WAR ON CASH? Governments and the financial banking sector hate physical notes – cash. Why? Actual physical cash in use (globally) = $1.38 Trillion Bank accounts (digits) = $ 10.0 Trillion Stocks = $ 20.0 Trillion Bonds = $ 38.0 Trillion Derivatives = $ 220.0 Trillion If just 10% of the population were to liquidate into cash, there would not be enough to satisfy demand. This is what occurred in September of 2008, when +500 Billion dollars were withdrawn from the money market in a matter of a few hours. This frightened TPTB and horrified them when thinking… Read more »

Silvrwillwin
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Silvrwillwin

A stiff penalty indeed , OutLookingin ! Thanks for the insightful play that the NeoCons are licking their lips over.

Mike
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Mike

APMEX dropped their silver eagle premium again, just days after the last price drop and their marketing email said, “only while they last!” Well, not only did supplies last but they must have piled up. APMEX premium history since we heard people predicting these premiums may be here to stay: 5.49, 5.19, 4.99, 4.59, 3.99, 3.79. Each price change has only been DOWN and I have been able to predict the direction each and every time. How? Because they have done it exactly this way for years! Next prediction: you will see premiums on silver Eagles go DOWN. Anyone care… Read more »

joe
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joe

The fiat world will perish … the dollar will drop it cannot rise any higher than where it is now … theres is NOTHING that can get it higher at this time period in history …. our economy cannot grow any further unless there is more QE… The dollar only has value because of the economy that backs it up …. we now have a debt ceiling crises again in DC , Unemployment participation rate lowest , our deficit spending highest with other nations …we do not produce , we consume … so you tell me …what backs up the… Read more »

Mike
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Mike

“GOLD DOES NOT NEED ANY ECONOMY”.

For gold to have value there must be a functioning economy. Gold absolutely does need an economy and it is not its own economy.

If the economy crashes and production drops significantly, then you will likely see your gold lose purchasing power. You cannot purchase things that are not produced. As the same amount of gold chases fewer and fewer products you will see it takes more gold to by the same product.

Mike

Silvrwillwin
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Silvrwillwin

“our economy cannot grow any further unless there is more QE…”

I believe that it’s debt that grows , not the economy.

Without a strong GDP showing as a result of strong manufacturing results , the economy only
keeps going down .

Mike
Guest
Mike

It is ironic that he is saying QE is required for the economy to grow. We have had six years of QE, yet percentage of employed Americans has dropped. Energy consumption has dropped. Manufacturing has dropped. Prices are rising yet wages are stagnant. Exactly why will more QE work??

Mike

joe
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joe

The reason I say gold is its own economy contained is….. lets say you live in brazil , argintina right now for example and you want to travel someone with your fiat ….. you will have a hard time beacsue the values have plummeted …. they have plummeted because of the economy backing them …. the same will go with the dollar at some point…. but with gold you can travel the globe !!! and will always have purchasing power because it does NOT need an economy to back it up

miike
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miike

gold will and always has held its value i wish i had bought more when it was 600.00 an ounce just 6 years ago gold will continue to soar because the federal reserve and government doesnt have enough gold anymore to back up the us dollar they paid china alot of our debt with us gold thats why the us dollar continues to lose purchasing power its weak and also other factors like manufacturing the economy etc

miike
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miike

china right now is the worlds leader in gold consumpsion they have more gold than anyone in the world thanks to the us govenment the chinese dont want to get paid in us dollars the money we owe them they take our gold for payment also noone can inspect fort knox where most us gold is stored because the us keeps it a secret not for security reasons but they dont want the public to know how much they gave to china for part of the 18 trillion dollar debt and growing every second