08

May 2018

08

May 2018

Another Day. Another Dollar

By StoneX Bullion

“Money makes the world go round” or “to make money, you got to spend money.”
These are common phrases associated with the physical manifestation of money. The Federal Reserve System is familiar with those two phrases more than most as it controls the amount of money that circulates in The United States. Not so long-ago, most paper currency in the world was backed by gold and directly exchangeable for it but that has since changed dramatically and the production of paper money has increased astronomically. In 2014, the bureau of engraving and printing created 6.9 billion paper notes with a total value of $130.1 billion and that is just a fraction of the total amount of money that is currently in circulation. When looking at the cost of this large-scale production, the immediate train of thought leads us to the cost of the raw materials involved, an example of this is between the facilities in Fort Worth and Washington D.C about 8.9 tons of ink was used each day in the last fiscal year. To get a better idea of the cost of production another example is a $1 bill costs on average 4.9 cents per note to make while a $10 costs 10.3 cents to make to sum up the more its worth, the more it costs to produce. After all that is said and done, we need money to live and to maintain a lifestyle of our choice, the government does its best to make the bills last with introducing legislation against defacing currency. With the rise of crypto currencies and more people, looking at holding traditional stores of value such as gold this will be an interesting and dynamic space to watch in the immediate future.
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