U.S. TREASURY: Ramps Up the Zimbabwe Style Printing Press

It looks like the U.S. Treasury is learning a few tricks from the Reserve Bank of Zimbabwe as it ramps up its printing press.  In just a few years, the U.S. Department of Treasury Bureau of Engraving & Printing has substantially increased the printing of its largest valued Federal Reserve Note — the $100 bill.

Ironically, the U.S. Department of the Treasury calls its Bureau of Engraving & Printing’s website, the MoneyFactory.gov.  Who says government officials don’t have a sense of humor?

Why on earth should gold and silver miners spend $100’s of billions of dollars exploring, mining, extracting and refining to produce real money, when you can go to the U.S Money Factory and get all the money you need?  And for pennies on the dollar.

According to the U.S. Treasury’s website:

During Fiscal Year (FY) 2013, the Bureau of Engraving and Printing delivered approximately 26 million notes a day with a face value of approximately $1.3 billion.

During Fiscal Year (FY) 2013, the Bureau of Engraving and Printing delivered approximately 6.6 billion notes at an average cost of 10 cents per note.

Over 90 percent of the notes that the BEP delivers each year are used to replace notes already in, or taken out of circulation.

The Bureau of Engraving & Printing releases annual data on the Federal Reserve Note production figures and the table below shows the changes from 1992-2012:

Federal Reserve Note Production Table

Now, if we concentrate on the most used Federal Reserve Notes, the $1, $10, $20 and $100, we can clearly see the change in annual production figures below:

Federal Reserve Notes Annual Production Figures

You will notice that the two biggest changes are the large drop in production of $1 bills and the huge increase in the $100 note.  In 1992, the Treasury printed a little more than $4 billion in $1 bills, but this fell in half to $2 billion in 2012.  Now if we look at the change in the printing of the $100 bill, we have a much different story.

In 1992, the U.S. Treasury printed $103 billion worth of Federal Reserve notes and the $100 bill accounted for 21% of this total.  Then in 2002, the total currency printed that year increased modestly to $112 billion, but the $100 bill was now 54% of this total amount.   However, by 2012 a significant change took place.

Not only did the total value of currency printed in 2012 triple compared to 2002, but the majority of the increase was solely due to the printing of our famous American — Benjamin Franklin.  In 2012 of the total $358 billion printed in Federal Reserve Notes, the $100 bill accounted for $303 billion, or 84% of this amount.

As you can see from the figures on the chart, the printing of the $100 has increased more than 10 fold from 218 million $100 bills in 1992 to 3,027 million printed in 2012.

While it’s true that the use of debt cards has reduced the need for the smaller bills such as the $1, $5 and $10, this doesn’t change the fact that amount of actual physical currency in circulation (in dollar amount) is now overwhelmingly the $100 bill.  No wonder the U.S. Treasury had to redesign a new $100 bill to fight against the increased counterfeit threat.

To get ready for the “New Release” of its redesigned $100, the U.S. Department of Treasury, printed 563 million of the new bills just in the month of September (48 million of the $100 notes at its eastern facility and 515 million at its western branch).

The huge increase in the printing of the $100 bill this past decade coincides nicely with the massive increase of U.S. Govt debt and Federal Reserve policy of QE monetization.  I would imagine if the new Federal Reserve Chairman, Janet Yellen keeps to her promise of increasing QE to infinity, they may have to bring back some of their old larger notes out of retirement.

$10,000 Federal Reserve Note

$100,000 Gold Note

Even though the $100,000 note is a gold certificate, it gives the reader a good idea of what a Federal Reserve Note would look like with all those extra zeros.

The United States is heading for a hyperinflationary collapse.  This will not be an economic event, but rather a loss of faith in the Dollar — a statement repeated by Jim Sinclair.

Lastly, the world is facing two different collapses.  One is a financial-paper collapse and the other is an energy-physical collapse.  In the history of world, mankind has been able to pull itself out of all financial collapses whether they be hyperinflations, deflations or world-wide depressions.

However, we always had a growing energy supply to do so.  This time will be different… indeed.  We are heading into a new paradigm that I call, “COLLAPSE ECONOMICS.”  I will explore this in detail in several future articles, the first to come out shortly.

The world will wake up abruptly one day to the forgotten monetary religion of Gold & Silver.

Enter your email address to receive updates each time we publish new content.

I hope that you find SRSroccoReport.com useful. Please, consider contributing to help the site remain public. All donations are processed 100% securely by PayPal. Thank you, Steve

17 Comments on "U.S. TREASURY: Ramps Up the Zimbabwe Style Printing Press"

  1. Hi Steve,

    Nice piece. A great piece of humour about the printing and how printing currency (QE) works http://www.youtube.com/watch?v=j2AvU2cfXRk. Sometimes humour makes the point better then well written pieces like this…..

  2. Quantitative easing for the government spending and more ‘back door’ profits for the private stockholders of the federal reserve bank through seigniorage.

    Seigniorage derived from notes is indirect, being the difference between interest earned on securities acquired, in exchange for bank notes and the costs of producing and distributing those notes.

    Currently, seigniorage on bank notes is simply defined as the interest payments received by the Fed on the total amount of currency issued. This usually takes the form of interest payments on treasury bonds purchased by the Fed, putting more currency into circulation.

    When worn out notes are collected and taken out of circulation, they are never returned to the Fed. Thus the issuer (the Fed) keeps the whole seigniorage profit plus the interest paid, by not having to buy worn out currency back at face value!

    Remember, the federal reserve bank is a private for profit entity, that is owned by stockholders (highly guarded secret list) who pocket all the profits. Pretty good trick! Legalized robbery right under the noses of the citizens, who don’t even realize that they are being robbed! Incredible.

    • OutlookingIn,

      I actually forgot about the Fed’s seigniorage of the bank notes… thanks for bringing that up. Just another thorn in the side for the American people…aye?

      steve

  3. What do you mean there is no more energy supply?? With advancements in solar tech, solar is the next energy revolution. Unlimited energy from the Sun.

    • prestodo,

      I didn’t say there was no more energy. However, energy production will peak and decline. Then we are going to have deal with using what we can get, rather than what we want.

      Solar & Wind are not viable solutions. As I mentioned in a comment in the previous article, both right now only produce 1.5% of the total world energy supply. Even if they quadruple to 6%, it’s still peanuts.

      Lastly, in a peak oil environment, there will be less energy to mine, extract and manufacture the stuff that makes solar and wind products. Also, there is the added negative benefit that just about all of these solar and wind projects will not pay for themselves over their lifespan unless there are huge govt subsidies.

      steve

  4. Hey Steve – maybe something to add to the conversation.

    Since the SS surplus has by and large ceased and this was for a long period helping to soak up excess treasury debt (the early version of QE?), the Intra-government non-marketable debt has hardly grown while nearly all debt growth is in “marketable debt” ($5 T to $12 T)

    2- this marketable debt has been soaked up primarily by two sources…Fed, $2.5 Trillion (Fed had primarily Bills in ’08 but dumped all Bills and purchased solely Notes/Bonds) and Foreigers, $3.5 Trillion. When looking at the increase in foreign countries ownership, many have like the Fed spectacularly increased their T debt ownership since ’08…but seems very few discuss this Foreign rate of increase as wildly unsustainable…

    Fed increased Treasury holdings by 300+% from ’08…

    China by 120% since ’07 ($476 B to $1.1 T)

    Japan by 100% since ’07 ($620 B to $1.1 T)

    Belgium by 800% ($16 B to $133 B)

    Norway by 1200% since ’06 ($5 B to $68 B)

    Brazil by 800% since ’09 ($33B to $245 B)

    Russia by 3000% since ’06 ($5 B to $163 B)

    UK by 100% since ’09 ($57 B to $127 B)

    Switzerland by 400% since ’08 ($45 B $170 B)

    Ireland by 600% ($16 B to $90 B)…and the same true for so many more countries while nearly none were sellers???

    Only major that hasn’t spectacularly increased T ownership…Germany…$60 B then and $60 B now.

    All these countries massive increases in ownership of a debt instrument yielding a negative return is maybe just as big a story as the Fed’s increase. And done w/out negatively impacting the dollar. How would these countries ever “normalize” while the Fed tapered or actually shrank it’s balance sheet (ha ha). No, these are all one way hyperbolic movements and there is no exit or going back…these cannot be undone w/out an interest rate super spike to destroy the whole ponzi….(for instance).

    • Chris,

      You bring up an excellent point. Well done. Yes, not only is the Fed holding onto increasingly worthless Treasuries (as the rates rise), but so are foreigners. Thanks for putting that data in your comment. I find sometimes there is actually better information covered in the comment section of my posts than in the post itself.

      Now, I am looking at the U.S. Treasury’s most recent TIC data and I have a different figure for China (which would make their increase even greater) at $1,268 billion in August. However, this is down from their peak at $1,297 billion in May. So, the Chinese have liquidated $30 billion of U.S. Treasuries in 3 months time.

      Chris, I believe the FED is really stuck. If they stop QE, then what happens to all of these Treasuries held by foreigners? The world has been purchasing U.S. Treasuries to keep in the game. However, it looks like the game is going to end sooner than later as this is unsustainable.

      Your thoughts?

      steve

      • Steve,

        I think “who” among foreigners owns these T’s and what “money” they used to buy them is super important to understand how they will react if the Fed were to slow QE. Are these CB’s, are these foreign banks taking QE from their US based branches and moving this back to their motherships? Is this “money” dollar swaps being utilized to maintain a “market”? I can’t answer any of these and can only look on with a critical, cynical eye. Is there a quid pro quo since ’08 with foreigners massively buying T’s and in return being given access to below “market: gold prices in return?

        Just assertions with so little evidence.

        • I wonder what we would have to offer “foreigners” to maintain losing Treasury positions to get them to maintain them while the Fed were tapering their purchases (or even just jawboning about tapering)??? Would have to be a pretty sweet deal one would think?

  5. Steve – great work. Keep it up.

    I agree with you on the energy/metals nexus. Much like you I have been following peak oil closely for well over a decade. I became aware of it when I heard Richard Heinberg on Jim Puplava’s show back in 2002 and then read his book “The Party’s Over”.

    However, one thing still bugs about oil and inflation as it pertains to metals. With higher energy prices and an inflating money supply, miners – silver in particular – are still producing metal at $21 an ounce. I would think that they would have stopped production by now because of rising input prices. Perhaps there is something we don’t know.

    The way I see it demand is the only thing that will increase prices. There appears to be plenty of supply in an era of peak oil and monetary inflation at a ridiculously low price of $21 and ounce. I don’t see miners closing shop or any real shortage of silver. As a silver stacker since 2003, it gives me cause for concern.

    • Mark,

      You bring up a good point worth discussing.

      First: Peak Silver will not occur in the primary silver mining sector first, it will come via the Base Metal Miners. As you know, 70% of silver comes from by-product mining & 30% from primary miners. I imagine by-product silver from copper production will be the first causality. However, this is still a few years off.

      Second: Peak Silver from base metal mining will not occur due to a shortage of oil per say, but rather due to the decline in demand as world economies contract as oil production declines. Thus, the need for less metal. Basically, global GDP will head south and so with it…. base metal demand.

      Third: The primary miners as a group will still produce metal at a loss because of the wonderful world of credit and share dilution. A few are making money at this low price of silver, whereas most are not.

      Lastly: I think the primary silver miners will benefit the most in a peak oil environment due to the high future demand of silver’s store of ECONOMIC ENERGY as well as its low fuel consumption per oz of metal extracted and produced compared to the base metal and gold mining industries.

      steve

  6. http://web.mit.edu/newsoffice/2008/oxygen-0731.html

    Recent discovery takes Solar energy to new heights.

    • bjs,

      It’s always nice to read these new “HIGH TECH” discoveries that are going to revolutionize and save the world. I find them more entertaining than useful. However, let’s get to the meat of the deal….. shall we.

      I am ALL FOR POSITIVE WAYS to make our life better here on mother earth, unfortunately Technology has not provided the benefits that it promised. I will get into this in detail in future articles.

      SIMPLY PUT: The EROI – Energy Returned On Invested is what allows a system to survive or perish — whether that be a living or mechanical system.

      Technology is nothing more than a DEVOURER OF THE EROI. The more complex the technology, the lower the EROI. Thus, the lower the EROI, then we start having real problems.

      Technology has not INCREASED the EROI ratio of energy, it has DECREASED it fer peke sakes.

      Let me explain:

      If I go out and spend a few hours a day in my organic garden, I will produce a positive EROI of 5/1. That means the energy I get from the calories of food I harvest is 5 times greater than the energy I put in. Permaculture gardening is even higher and can reach 10-20/1.

      The modern U.S. agricultural-food-distribution system EROI is a 1/10.

      FOLKS….. THAT’S A HUGE NET ENERGY LOSER.

      Let me repeat that one more time so it will finally SINK IN:

      FOLKS….. THAT’S A HUGE NET ENERGY LOSER.

      Our modern food production distribution system takes on average, 10 units of energy to produce 1 unit as food calories to the market. No amount of solar, wind, cow farts or whatever are going to make that HIGH TECH system any better.

      No Empire has ever survived from the Falling EROI. Just as Rome fell, so will the USA. Also, don’t think China will be immune to the falling EROI. They may survive a little longer, but when the PHAT FALLING EROI sings for them, China’s empire will collapse as well.

      No one… and I mean no one survives from the Faling EROI.

      The world is clueless to the FALLING EROI. However, they will feel the impact soon enough.

      steve

    • “The key component in Nocera and Kanan’s new process is a new catalyst that produces oxygen gas from water; another catalyst produces valuable hydrogen gas. The new catalyst consists of cobalt metal, phosphate and an electrode, placed in water. When electricity — whether from a photovoltaic cell, a wind turbine or any other source — runs through the electrode, the cobalt and phosphate form a thin film on the electrode, and oxygen gas is produced.”

      Haha – what a POS!

      So you need electricity from a solar cell to spit water to H and O, and then use a fuel cell to produce electricty again? Why the hell would you not take the electrity that comes out of the PV in the first place, and use it?

      Btw, there is already a process that can be used to split water into H and O, by using electricity. It is called “electrolysis” and was discovered about 200 years ago. You learn about it in 1st class chemistry, IF you have any education to speak of.

  7. Excellent! Lots of new $100 bills being birthed. I guess we’ll need ’em to buy the morning coffee soon.

Leave a comment

Your email address will not be published.


*