BEP: July 2009

BEP data for July 2009:
(http://www.bep.treas.gov/section.cfm/2/431/651)

$1 = 236.8 M
$2 = none
$5 = none
$10 = none
$20 = 51.2 M
$50 = none
$100 = 150.4 M
Total notes = 438.4 M
Average value per note = $37.18

Fewest $1 notes since March 2009.

Third consecutive month without $5 notes, the longest period in my records back to 2002.

Fourth consecutive month without $10 notes.

Fewest $20 and $100 notes since January 2009.

Fewest total notes since December 2007.

The BEP has been on a $100 note printing bender this fiscal year, the likes of which have not been seen in this decade. $100 note production for 2009 is already 70% higher than the average annual production from FY2003-FY2008, with two more months of FY09 to go. Why the surge? Here are my theories:
- Foreign demand for the physical greenback is up as citizens of developing nations flee to the security of the USD. Remember, Panama, Ecuador, and El Salvador officially use the dollar, and hyperinflated Zimbabwe is de facto on the USD too. This could also be the work of increased demand from currency market speculators.
- The BEP has quietly updated the note's design, and is ramping up a print run of the new notes. A $100 note redesign was announced in late 2007, comparable to the colorization of the $5, $10, $20, and $50 notes in recent years. Yet no formal proclamation has yet been made, no curtain pulled back on a colorized $100.
- In a steep recession, with credit markets locked up, many Americans have given up on their credit cards, and are resorting to cash transactions. (On second thought, this theory doesn't work. If more transactions were in cash, we'd see a corresponding increase in smaller bills and coins, which isn't happening.)
- People are nervous about the future economy, and are hoarding $100 bills.
- Plain old-fashioned inflation. People simply need larger bills than they used to, and some critical point has been passed where banks are giving out $100 notes in place of several $20s.