How Many U.S. Dollar Bills Are There in Circulation?
When you think about it, the journey of each individual currency note is pretty incredible.
After being printed or minted, each bill is then passed between people and businesses to facilitate transactions. If it’s a $1 or $5 bill, it changes hands on average about 110 times per year – and if it’s a $20 bill, it’s more like 75. The interesting part is that almost every transaction is linked to the one before it, and the series of subsequent transactions for each bill creates a unique, broad story.
By the time a bill is retired, it would have facilitated many hundreds of transactions that enabled everything from the purchase of used cars to the shadier deals in underground markets. It’s a pretty interesting tale for such a little piece of paper.
Dollar Bills, in Aggregate
Today’s infographic from TitleMax gives a sense of what happens when all of those individual stories are combined together into one large one: the U.S. supply of currency notes, the shelf life of each type of bill, and how the whole system works as a whole.
In total, there is a total of about $1.5 trillion in U.S. physical currency in circulation, and roughly 80% of this value comes from the 11.5 billion $100 notes that are in circulation.
|Note||Number of bills in circulation|
|$1 bill||11.7 billion|
|$2 bill||1.2 billion|
|$5 bill||2.8 billion|
|$10 bill||1.9 billion|
|$20 bill||8.9 billion|
|$50 bill||1.7 billion|
|$100 bill||11.5 billion|
Of course, as we showed in All the World’s Money and Markets, this is just a fraction of the total money that exists as a whole, which includes digital deposits and liquidity added by central banks. That’s why, in the U.S. today, there’s about $14 trillion in total money supply (M2), of which physical currency makes up only about 11% of the total value.
Turnover Per Bill
Every year, the U.S. Bureau of Engraving and Printing is responsible for printing new dollars – and interestingly, 70% of these new bills are used to replace older notes going out of circulation.
That raises the question: how long does each bill last on average?
|Note||Average Life Span|
|$1 bill||5.8 years|
|$5 bill||5.5 years|
|$10 bill||4.5 years|
|$20 bill||7.9 years|
|$50 bill||8.5 years|
|$100 bill||15.0 years|
This means that printers are mostly turning out new batches of $1 and $20 bills, since there are more of those in circulation than most other bills.
At the same time, many new $100 notes are also being printed as well since they are the second most common bill. However, these last 2-3x as long as smaller denominations.
The 7 Major Flaws of the Global Financial System
Since the invention of banking, the global financial system has increasingly become more centralized. Here are the big flaws it has, as a result.
The 7 Major Flaws of the Global Financial System
Since the invention of banking, the global financial system has become increasingly centralized.
In the modern system, central banks now control everything from interest rates to the issuance of currency, while government regulators, corporations, and intergovernmental organizations wield unparalleled influence at the top of this crucial food chain.
There is no doubt that this centralization has led to the creation of massive amounts of wealth, especially to those properly connected to the financial system. However, the same centralization has also arguably contributed to many global challenges and risks we face today.
Flaws of the Global Financial System
Today’s infographic comes to us from investment app Abra, and it highlights the seven major flaws of the global financial system, ranging from the lack of basic access to financial services to growing inequality.
1. Billions of people globally remain unbanked
To participate in the global financial sector, whether it is to make a digital payment or manage one’s wealth, one must have access to a bank account. However, 1.7 billion adults worldwide remain unbanked, having zero access to an account with a financial institution or a mobile money provider.
2. Global financial literacy remains low
For people to successfully use financial services and markets, they must have some degree of financial literacy. According to a recent global survey, just 1-in-3 people show an understanding of basic financial concepts, with most of these people living in high income economies.
Without an understanding of key concepts in finance, it makes it difficult for the majority of the population to make the right decisions – and to build wealth.
3. High intermediary costs and slow transactions
Once a person has access to financial services, sending and storing money should be inexpensive and fast.
However, just the opposite is true. Around the globe, the average cost of a remittance is 7.01% in fees per transaction – and when using banks, that rises to 10.53%. Even worse, these transactions can take days at a time, which seems quite unnecessary in today’s digital era.
4. Low trust in financial institutions and governments
The financial sector is the least trusted business sector globally, with only a 57% level of trust according to Edelman. Meanwhile, trust in governments is even lower, with only 40% trusting the U.S. government, and the global country average sitting at 47%.
5. Rising global inequality
In a centralized system, financial markets tend to be dominated by those who are best connected to them.
These are people who have:
- Access to many financial opportunities and asset classes
- Capital to deploy
- Informational advantages
- Access to financial expertise
In fact, according to recent data on global wealth concentration, the top 1% own 47% of all household wealth, while the top 10% hold roughly 85%.
On the other end of the spectrum, the vast majority of people have little to no financial assets to even start building wealth. Not only are many people living paycheck to paycheck – but they also don’t have access to assets that can create wealth, like stocks, bonds, mutual funds, or ETFs.
6. Currency manipulation and censorship
In a centralized system, countries have the power to manipulate and devalue fiat currencies, and this can have a devastating effect on markets and the lives of citizens.
In Venezuela, for example, the government has continually devalued its currency, creating runaway hyperinflation as a result. The last major currency manipulation in 2018 increased the price of a cup of coffee by over 772,400% in six months.
Further, centralized power also gives governments and financial institutions the ability to financially censor citizens, by taking actions such as freezing accounts, denying access to payment systems, removing funds from accounts, and denying the retrieval of funds during bank runs.
7. The build-up of systemic risk
Finally, centralization creates one final and important drawback.
With financial power concentrated with just a select few institutions, such as central banks and “too big too fail” companies, it means that one abject failure can decimate an entire system.
This happened in 2008 as U.S. subprime mortgages turned out to be an Achilles Heel for bank balance sheets, creating a ripple effect throughout the globe. Centralization means all eggs in one basket – and if that basket breaks it can possibly lead to the destruction of wealth on a large scale.
The Future of the Global Financial System?
The risks and drawbacks of centralization to the global financial system are well known, however there has never been much of a real alternative – until now.
With the proliferation of mobile phones and internet access, as well as the development of decentralization technologies like the blockchain, it may be possible to build an entirely new financial system.
But is the world ready?
How Every Asset Class, Currency, and Sector Performed in 2018
Investors saw a sea of red in 2018 – here’s a visual recap of how markets performed, including the big winners and losers from a volatile year.
We’re only a few days into 2019, but it appears markets have picked up exactly where they left off.
There is growing uncertainty and volatility almost everywhere, and individual events are starting to become catalysts for sell-offs or rallies. Whether it’s Apple’s recent profit warning or Fed chair Jerome Powell saying that he is “listening closely” to the markets, investors are taking cues from current events to figure out where the herd is grazing.
It’s hard to say where markets will head in 2019 – but before we get into the nitty-gritty of a new year, it’s worth taking one final look back at 2018 to see how it impacted investors.
How Markets Did in 2018
We’ll start with broad asset classes, including stocks, bonds, commodities, and cash:
Note: Figures for equity markets are not including dividends
As you can see, it’s mostly a sea of red.
Cash turned out to be best option for the year, and several asset classes were crushed over the course of 2018, including crude oil and nearly all stocks. Despite this, large cap U.S. stocks (S&P 500) had no issues in outperforming equity alternatives, like smallcap stocks, foreign stocks, or emerging markets.
Breaking down the S&P 500 further into its sectors, it’s clear that nearly every industry struggled simultaneously.
Energy (-20.5%) and Materials (-16.4%) sectors were the hardest hit, and even the Technology sector eventually capitulated by the end of the year. Amazingly, Apple was considered a $1 trillion company in August, but today the tech giant’s market capitalization has already dropped down to a measly $700 billion.
The one exception to the general trend in S&P 500 stocks was Healthcare, which posted 4.7% returns over the course of 2018. Companies like Merck, Eli Lilly, and Pfizer all saw their stocks grow by double-digits, and it’s possible the sector could stay strong in 2019 as the world continues to age.
Lastly, here’s how major currency markets fared.
The U.S. dollar was the strongest major currency, and the Japanese yen had an impressive year as well. The Aussie dollar was routed, and now sits at 10-year lows.
Winners and Losers
Lastly, here’s an ad hoc list of some of the biggest winners and losers in 2018 – it includes some of the stocks and assets that saw notable gains or declines over the course of the year:
Interestingly, it was the finer things in life that outperformed most major asset classes. Both fine wine and fine art gained close to 10%, leaving most other indices behind in the dust.
AMD had a roller coaster year, finishing up nearly 80% as the biggest winner on the S&P 500. That said, owners of AMD stock may see things differently: the stock had actually tripled by September, and has fallen precipitously ever since.
Given the above recap, what are you investing in for 2019?
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