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The Fed's "Other" Taper: Printing Of New $100 Bills Tumbles By 85% In 2014
When we last looked at the amount of $100 bills printed by the Treasury's Bureau of Engraving and Printing, we were a little concerned because it appeared that the Fed's infatuation with growing bank reserves had finally spilled over into the physical money printing arena, after a record 4.4 billion $100 bills were printed just a year after the Treasury had, at the Fed's request, printed another 3 billion of the new banknotes. In retrospect this wasn't a case of the Fed wishing to unleash Weimar upon the US - at least not yet - but merely part of the ongoing process of replacing old $100 bills with the new "plastic" ones. This amounted to over $750 billion in new $100 bills alone being unleashed on the market, well over half of the entire amount of US paper currency in circulation.
Whatever the reason for the surge, it now appears that the Fed's wanton money printing hit a brick wall in 2014, and together with the transitory end of QE earlier today, the Treasury's literal printing of money also tumbled, with just 650 million of the brand new banknotes issued, an 85% plunge from the year before. In fact, the number of $100 bills printed in 2014 was the lowest amount of this higher denomination unleashed into broad circulation since 2004!
Curiously, it is also over 70% less than what the 2.4 billion $100 notes the Fed has originally ordered from the Treasury.
Alas, those seeing in this data a reason for the plunge in money velocity will have to look elsewhere (well, maybe). Here, according to the Fed, is the reason for the drop in the highest denomination US currency:
On July 22, 2014, the Board approved a revision to its FY 2014 order. The revised order reflects a reduction in the order for $2 and $100 notes and includes a total of 6.0 billion Federal Reserve notes valued at $121.7 billion. The reduction in the order for $2 notes allows the BEP to fix a minor production problem and the reduction in the order for $100 notes aligns BEP production with demand. Our issuance plan for the new-design $100 note was based on an aggressive replacement approach so that we ordered more $100 notes in FY 2014 than we anticipated we would need to ensure sufficient inventories following issuance. This reduction, therefore, does not indicate that demand for $100 notes has declined, but reflects the surplus of inventory that Reserve Banks are working through following issuance of the new-design $100 note on October 8, 2013.
Sounds like yet another velocity of money problem to us, and this one is quite literal. Oddly enough, the Fed has no problem accomodating "surplus inventory" when there is clearly too much supply of paper currency and yet when it comes to electronic currency, i.e., Fed reserves it will fill banks to the gill with reserves for which there is also no demand, and so banks have no choice but to buy stocks with the electronic money presented them by the Fed.
Philosophical issues aside, while the $100 bill may have hid a tranistory stumbling block in its clearance rollout, be it due to excess supply or insufficient demand, the fate of the paper that carries the face of the first American president is becoming clearer with every passing year: at this rate, the US may still have pennies in circulation but it sure won't have dollar bills for much longer.
2014 being a bad year for paper currency aside, here is the full recent history of money print orders by the Fed:
And while everyone is an expert these days on the Fed's creation of electronic money, here is the full history of US paper money over the past 20 years:
Currency in Circulation: Value
Currency in Circulation: Volume
Calendar-Year Print Order: Volume and Value
Federal Reserve Expenses for Cash Operations
Cost of New Currency
Payments of Currency to Circulation: Value
Payments of Currency to Circulation: Volume
Receipts of Currency from Circulation: Value
Source" Federal Reserve, US Bureau of Engraving and Printing
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They dont have enuff paper to print the monetary base.
We're in a much weaker real economic environment than that which existed in 2008.
Once equity markets start tanking as a catch-down to the reality that will be even further erosion in actual, real economic activity, the Fed is going to be loath to restart any programs that expand its already burgeoning balance sheet, especially since tanking equity markets and other risk-on asset values will actually ALLOW THE FED TO UNWIND ITS TREASURY HOLDINGS IN THE ONLY WAY POSSIBLE WITHOUT BLOWING UP.
In other words, the Fed, if a rational actor, now has the ability to help
to foster the very conditions that will help it to unwind its holdings w/out imploding, and will do just that.
Now that it's an open secret that QE, in any of its iterations, pretty much failed to lift the real economy in any sustained manner (just the opposite, actually - as we are now even more susceptible to economic shocks with a weakened foundation and even more of a hollowed out middle class), and pretty much only lifted the unrealized values of illusory assets such as so many suspect equity valuations, the Fed isn't fucked, but will bring about the fucking.
All that printed money (Billions and Billions) will ensure a 'soft landing' once we crash land on to those huge mounds of paper! There... fixed....
meanwhile....sales of silver Eagles, Maples, Buffaloes, bars, etc. worldwide continue to meet or break records from 2013 and we're not even done with 2014 yet.
Got phyzz, bitchez???
I'd say BTFD, but this pretty much is the dip...no reason to wait for anything less than this at this point. Even if the Cartel hammers it down to 10 there's really no reason now to wait for it.
Get it now while you still can. Miners can't mine as much and they're cutting back supply due to this criminally manipulated paper price bullshit. They're even now working to form a silver and gold "cartel" to fight this paper bullshit.
This shit it happening now...don't let the fake paper price get in your heads. Stack that phyzz strong from here on out until we hit 25 again.
I'm going to keep calling this until it happens and if I'm wrong or right I don't give a shit...if people follow it then they'll still have an awesome stack from here on out up to 25 whether this call is right or not:
I think the Cartel will "allow" silver to slowly get back up to 25 in small moves over a while into early/mid 2015. We need to keep buying on this way up until 25.
After 25 they'll run it to 30+ real fast because there's no "technical" resistance on the charts from 25 to 30. Then I think they'll monkey hammer the shit out of silver back down to 25 or lower. Buy up to 25 and then wait for it. See if it comes back down from 30 again and then load up on more phyzz.
It might go a little lower...mabe back down to 20, who knows? But we always have to keep in mind that fake paper prices at that point are one thing, but actual fundamentals of supply and demand are also going to become more prevalent and will eventually take control over the paper market.
Deliveries of phyzz will take many weeks longer...premiums will start to get much higher. And we all know we can't catch that falling knife perfectly and find the exact perfect bottom. Don't worry about saving a few dollar or whatever while stacking phyzz silver. Just get that shit as your budget allows.
I'm not saying sell the farm, but just keep buying in chunks slowly as your particular budget allows.
We're going to win this in the end...it'll just take time. Stay patient...stay prepared...always have some of that bullshit fiat dry powder set aside for other things and quick stacking, etc. Don't give in to their Jedi mind tricks ;-) Cuz they ain't Jedi's...they just think they are! LOL
Two reasons:
1. EFTPOS
2. The ATMs still don't spit out anything bigger than a fifty.
retailers do not realise the next QE is this 1) big balance sheet 2)balance sheet guidance. 3) interest rate guidance. the FED right now are NOT going COLD TURKEY......
obviouly when you look at the weekly charts something BIG IS COMING, and another big annoucnement is coming.
the nasdaq chart look nice. check it here => http://bit.ly/1fMcakI
There's an app for that...digital.
What is the velocity of money now, anyway? Going down? Going way down?
It is way down. If I wasn't so lazy I'd dig up a link to a chart.
To many going into mason jar federal
Printing Treasury Reserve Notes for the reset. They don't have super powers they can only print one type at a time.
Dude - Jamie Dimon isn't gonna light a cigar with a zippo.
Are they still printing on both sides of the paper?
Are they going to replace the dollar bill with the hundred?
Good thing they put all those security features in the new notes, so they can't be so easily counterfeited! Its absolutely critical that we have the security of knowing only the "approved folks" are doing the actual counterfeiting ;-)
Yeah, I always get a good laugh out of the "counterfeit fifties" stories. Where do phony fifties come from? The bank. Direct deposit. The ATM don't spit out hundreds. You never get fifty as change (unless you withdraw a $100 from a bank teller - which hardly anyone does so the opportunity to pass off a fake fifty drops to near zero).
Err, that's me anyway. Shop keepers might have a different story.
I once had a stack of 100s in my hand from a bank robbery in 1989. They were dye-spooged and coalesced like one of those fire-starting logs. You could've cut a man's jugular with the bills that jutted out in grotesque papier-mache. That was when the dollar was smelly and powerful.
These days bills look aspergery and cartoonish. Possessing a thick wad of them might actually make you seem retarded.
your show sucked balls, please retreat into the ethernet, thanks
One hundred dollar bills? Pfftttt.... We gots CrapplePay now.
USA! USA! USA!
With money velocity plumbing new depths, there is no need for new bills.
You need to add a graph showing exports of printed $100's. I am sure that did not drop. They get shipped from Jersey. Jersey...where we export all of Americas most toxic substances.
I suggest they start printing Fed members faces on the $100 dollar bills so when you begin wiping with it you will be reminded of who is ultimately responsible.
You mean Fed members will PAY to get off on the perversion aspect of it all?
I remember handing a 50$ bill to a gas station lady once.., after a fill up... and she Replied " I can't break that. " I said lady you only have to find 8 bucks...
We can't get rid of the 100's fast enough. So much so that apparently we've dropped pallets and pallets of them out the back of airplanes in both Trash-can-istan and Iraq. No, I'm not kidding either. We don't have a $100 bill problem, we have a distribution of $100 bills problem.
Ten years ago, I remember Russian business acquaintances scrambling for the "Benjamins"... now, they are happy to pay a TEN percent premium to get the banks-don't-have 500 Euro notes.
It's even become a side business. You know what the difference between $10000 in Franklins is against 10000 euros is??? Think 100 bills worth $10000, and 20 bills worth $12000.
What fits easier in your duffel bags? Rolled up and in your ass? In the frame of your kids' stroller?
can we assume OBama and his cronies have no where else to put all their takings?
Just in case some of you have been living in a cave or time warp....
The "End Game" for these central bankster assholes and their gov't lackeys, no matter how many BenFranklins they print, is a "Cashless Society"