Comments on: $20.8 Billion in US Banknotes Printed in June, Most in 1-3/4 Years

By: Munzen

Munzen — Thu, 27 Aug 2015 17:47:27 +0000

The amount of physical cash in circulation is less than a tenth of the total money supply. Yes, cranking out more bills does have an effect but it’s by no means at all the largest factor. Most spending is via credit, so if you want to put brakes on the economy you have to control things like interest rates and how much people can borrow. E.g. the mess we got into 2008-2009 wasn’t due to too many banknotes in circulation; a good chunk of it was due to lax credit policies that encouraged both businesses and individuals to get in waaay over their heads.

Sorry, but there is NO silver-bullet answer like “just print fewer bills” to fix a sick economy, any more than you can cure a sick person telling them to “just get healthy”.

By: Whistler

Whistler — Wed, 26 Aug 2015 21:15:46 +0000

It is not that complicated, print more money, devalue its value in the uSA, it may be strong overseas but inflation here is strong, eggs up 150% in a year, beef 100% in 6 months, gas $4 a gall (Cali!) tc., all these notes are used to payooff Iranian, Iraqis, & Illegal alien newcomers to the USA, making the $ less valuable in the long run. When it all come shome to roost, watch out……spending more, ha ha….Munzen they print it because they can out of thin air, what does that do?????/

By: Munzen

Munzen — Wed, 26 Aug 2015 19:04:43 +0000

Demand is tracked by the Federal Reserve through the 12 Fed districts and the banks they supply with cash. And because “money” is _far_ more than banknotes (e.g. credit, electronic payments, etc., etc.) just maintaining a constant value of circulating notes can’t in and of itself stabilize the money supply.

Among other things an increase in banknotes can indicate that more people are buying things, and/or that buying patterns have changed. Because bills tend to be used for smaller purchases it could indicate that consumers are more willing to make ad hoc or even spur of the moment decisions to buy something. All of that would mean they feel better about their economic situation which is a good thing. Also some people are using cash more frequently because of security concerns, be it data breaches, anonymity, or whatever.

Bottom line, it’s a pretty complicated question to answer.

By: ToppCatt

ToppCatt — Wed, 26 Aug 2015 16:13:43 +0000

This reports only 1/2 of a story. The other half should be whether the same amount of notes were removed from circulation. If not, the “replacement” is only adding to inflation and who needs that except politicians to spend on their pet projects that buy more votes.

I wonder who or what political entity authorizes the amount of notes in circulation.