New York CNN –
Unless you’re an avid currency collector, an employee of the Bureau of Engraving and Printing, or work at the Federal Reserve, you probably didn’t know that a record number of $50 bills were printed last year.
Last year, the government printed 756,096,000 of these banknotes, the highest total of banknotes printed in one year in more than 40 years. If you put all these 50 dollars together, you would have about $37.8 billion. Enough to afford Taco Bell’s parent Yum Brands, Inc. Market capitalization of $35.3 billion.
Typically, the $50 bill is an unusual, somewhat unpopular denomination. There are also many superstitions that it brings bad luck. (More on that later.) In 2019, just 3.5% of all US banknotes printed were $50 bills. In 2022, that percentage has risen to 8.5%, according to the BEP.
So why do you see more $50? Surprisingly, it has nothing to do with inflation, although sometimes these days it may seem that an item that used to cost $20 now costs $50. (Fortunately, the growth rate of inflation has dropped to 3, 2%. October from the peak of 9.1% last June.)
Instead it all started with the pandemic. The Fed found that people began hoarding cash. And it’s easier to throw away larger bills.
In July 2021, the Fed noted its “2022 print order is greatly impacted by the COVID-19 pandemic… the Federal Reserve continues to experience unprecedented demand for currency.”
A subsequent report from the San Francisco Fed confirmed that, after 2020, Americans began carrying more cash in wallets, cars, homes and elsewhere.
Then, the Fed ordered a sharp hike to $50. Until the pandemic, the $50 bill had been one of the rarest bills ordered in years, except for the $2 bill. But for 2021 and 2022, the Fed ordered a hikeand $50 compared to $10 and $5.
To understand why so many $50 bills were printed, it is important to know how the money printing system works. The Fed does not print physical money; estimates the expected demand for currency and the rate of decay of banknotes already in circulation. It then orders the money from the Bureau of Engraving and Printing, the government agency that prints paper money. The United States Mint produces coins.
Few people really like the $50. There is an old superstition that because President Ulysses S. Grant is one step away from $50, and has famously gone bankrupt, the math is unlucky. (The $50 bill dates to 1862, but Grant’s face wasn’t added until 1914.)
In 2010, North Carolina Republican Representative Patrick McHenry even attempted to introduce a measure in Congress to replace the 18th President Grant with the 40th President Ronald ReaganN. The effort gained some support but ultimately went nowhere.
Professional gamblers and casinos reportedly dislike carrying bills, considering it bad luck and partly because Las Vegas investor and casino gangster Bugsy Siegel was said to have died with only $50 in his pocket.
But more likely, and more realistically, people tend to avoid using $50 bills because they get confused with $5 or $20 bills, and many stores don’t accept bills over $20.
A surge in demand for physical money during a lockdown may not make sense at first glance. Especially considering that, with the arrival of Covid-19, companies in the United States have temporarily closed their customer-facing stores and the Centers for Disease Control and Prevention the use of cash is discouraged.
But the demand for physical cash and the actual payment in cash they are two separate things, according to analysts at the San Francisco Fed. Economic and geopolitical uncertainty naturally causes distress, prompting many people to hold onto money they may not immediately try to spend, they concluded.
Their data also shows that Americans are using less physical cash in everyday purchases, and the amount held by consumers still remains high compared to before the pandemic.
Printing of various cuts has returned to normal levels this year, as shown by the Fed’s printing orders for 2023 and 2024. The Fed, in its 2023 order, said that the main factor now in currency orders is the need to replace banknotes damaged ($50 bills last an average of 12.2 years, according to the Fed; dollar bills last about half as long.)
The Fed has placed its 2024 currency order in July, with expected $50 note volume of 99,200,000 to 211,200,000 notes, less than a third of the 2022 circulation.
But availability of liquidity for American families remain elevated compared to the pre-pandemic period, the San Francisco Fed report shows, underlining that consumers “continue to hold a significant amount of cash that is unlikely to be used for everyday purchases.”