The new $100 bills were released last October, about half a year ago. According to Wikipedia, the average life of a $100 bill is about 90 months (7.5 years). So you’d expect it to take three years or more before the new bills out-number the older ones in circulation. Yet almost all of them I’ve seen recently (in the past month or two) have been the new bills. And when I say “almost” I’m not exaggerating; I see only one old bill for every 10 or so new ones.
This rapid replacement did not happen with new issues of other denominations. I seem to remember it took about a year or more for this to happen with the smaller bills (fives, tens, and twenties) and much longer with the less used fifty. So why such a short replacement time?
Well it could be that I’m seeing an abnormal sample. Admittedly, I only see maybe a dozen or so hundreds in a week. Not a very large number, so this is plausible, although I don’t think all that likely.
Or it could be that the Federal Reserve is actively removing the old ones from circulation, even if they’re not worn out. They normally don’t do that, but maybe they’re making an exception for this bill. perhaps to foil counterfeiters or something.
So anyone know which of these two is the case? Or perhaps there’s another explanation.
I don’t know Fed policy on the $100 bill. However, it is the case that counterfeiting is a big issue with such large denomination notes and that many foreigners prefer newer $100 bills to older $100 bills. I would assume that banks here and abroad are the same way.
I was looking into a vacation in Africa, and one of the websites mentioned that the guides apprciated tips in US dollars - but only bills printed after a certain date - around 2006, I think.
The first Jack Reacher novel, incidentally, as part of the plot mentioned the amount of money flowing around overseas. It suggested that 2/3 of the paper cash was being hoarded overseas. (and that was essentially a free loan to the US government).
I’m not sure I understand the point you’re trying to make here. If foreigners are only demanding new bills, as others indicate, the old ones still should be circulating in the US. And I expect there are a lot more of the old ones than new.
I work in a small retail establishment. About 2 or 3 times a week, I’m tasked to take the previous day’s cash deposit to the bank. That’s where I see most of them. AFAICT, most of them are brought in to the store by people who use the lottery machines. They either get change at the front counter or put them directly into the machines. Either way, they usually end up in the deposit, although sometimes they’re payed out to lottery winners.
Yes, the Fed actively takes the older ones out of circulation. I had a roommate who had a job refilling ATMs, so here’s some jargon. A “bill” is a unit of currency. A “band” is fifty bills with a paper band wrapped around them. A “brick” is a shoebox sized double stack of bands shrinkwapped together. Maybe 30 bands of bills. So, at the banks, they separate incoming $100s into old and new ones. When they get a brick’s worth of old ones, they notify the Fed and the Fed sends a brick of new ones that they exchange for the brick of old ones, which they shred, and probably bleach and recycle into the paper for new bills.
The Fed has machines that sort the bills by condition and whether they are counterfeit. Bills that are suitable are reissued. It wouldn’t surprise me if they are retaining old series $100 bills.
Look at it this way: Americans are getting their bills from ATMs; non-Americans are getting their bills from Americans. It makes sense, therefore, that Americans will have newer bills, because they’re at least one step closer to the source. In addition, Americans don’t hold on to their $100 bills - they either deposit them in the bank, or spend it in a store that immediately deposits them in the bank. A bill in the U.S. has a much shorter bank-to-bank life span, so to speak, than one abroad, where a bill may pass between hands before reaching a bank. With fewer bills coming in, and fewer bills going out, older bills will stick around much longer.
I discovered this weekend that the bill changing machines in Vegas won’t accept the really old hundreds (the ones with the small portrait of Ben). I’m sure that gets them turned in at the cage, where they are bundled differently for the bank to return to the Feds.
Correction: the Fed takes worn out or damaged bills out of circulation. As long as bills are in good shape, they recirculate them. Unless you know for a fact that they’re making an exception in this case, which I what I asked in the OP.
All ATMs I know of just give out 20s. Maybe in some places with lots of rich people (say, Beverly Hills or Abu Dhabi[sup]1[/sup]) they give out 100s. Most people needing 100s go to their bank.
Consider two such bank customers: Customer A is going on vacation to Poughkeepsie and doesn’t worry about what kind of 100s he gets. He knows that both will be accepted equally well. So he takes whatever they give him, which may be mostly old ones.
Customer B, on the other hand, is travelling overseas. So she goes to the bank and gets $1000 in hundreds. But she knows that in Ruritanistan, they only accept the new bills. So she rejects the old 100s and makes the cashier hunt around for all new ones, even though a large percentage of them at the bank are the old ones.
The net result of these two transactions (multiplied by many more of the same) is a depletion of new bills in the US.
Which I’m not seeing in my neighborhood. Now perhaps it’s due to drug dealers demanding only new ones, so most of our gambling customers only have new ones. (This assumes that gamblers are also predominately druggies, which is not necessarily the case.) Or maybe there’s some other local factor I haven’t considered.
[sup]1[/sup] It would not surprise me in the least if there are ATMs dispensing US $100 bills in the Persian Gulf region. If there aren’t, some entrepreneur should get on the ball and provide some.
A few months ago, I got $200 at an ATM in a 7-Eleven in a small town in California. The town has some average suburban homes and a couple of trailer parks. Much to my surprise (and annoyance) the ATM gave me five $20 bills and one $100 bill. The ATM did not offer me a choice of what kind of bills I wanted. That was the only time I’ve ever gotten a $100 bill from an ATM.
I’ve never heard of bills and bands like that, here’s the bank jargon we use. “Clips” are small numbers of notes stuck together with paperclips. ($100 of fives and $500 of twenties, for example) “Straps” are a few clips worth put together ($2000 of twenties, for one example) and we don’t deal in quantities of bricks.
Anyway, at our bank and probably most, they don’t separate this generation of 100s from the last as a matter of policy. The old hundreds, with the small portraits, we do “mutt” and remove from circulation. I prefer to keep and give out new hundreds. Just because they’re better and impossible to lose in a stack of any other denomination. I bet others are the same way. Tellers prefer to give new hundreds, and customers prefer to get them–that may skew things a bit.
The mix of bills is governed by traffic and average withdrawal size at the ATM. If you’ve got an ATM where the average withdrawal is near the machine’s max or always hundreds of dollars, you’ll run out of twenties quickly and inconvenience your customers. So you throw in some larger bills and program it to split things up so someone getting $500 gets 4 hundreds and 5 twenties. We did this with machines located in shopping malls, for example, or near the train stations. The ones outside/inside the branches, just twenties.
Except that American banks, which get their cash directly from the Federal Reserve, have already replaced all their $100 bills, so everything they give you will be new by default. The old bills have been removed from circulation.
Except that most of the $100 bills used in Ruritanistan haven’t been brought there by travelers over the past month - they’ve been circulating inside the country and between it and neighboring countries for years, if not decades. So sure, all of bills that come into the country now will be new, but the old bills are still there, and they’re not leaving that fast.
true, but sooner or later a person in Ruritania may need to convert from dollars to zlotnys. If the bill is too tattered, only a bank will take it. Those banks then, I assume, exchange crappy $100’s for new ones via a US bank.
the other problem is that $100 is a year’s wages in Ruritanstan. So to live a normal life, the person will need to "break’ the bill. The only people with wads of $100s are drug dealers and people hoarding life savings in a jar under the dirt floor. The $1 bills probably get a better circulation and deteriorate much faster.
The old bills have NOT been removed from circulation. We return pre-96 hundreds to the fed for destruction, but all the newer ones are still 100% in circulation.