Well, I’d have gone for Everett Dirksen.
(a trillion here, a trillion there, …)
No. But I’m gonna!
The story was adapted as a movie, released in 1954 and starring Gregory Peck. It also influenced the more recent film Trading Places.
I think you may have hit on the solution here. If you have a trillion dollar bill, you can now buy Apple and get some change back.
Can I get change in Euros and agree to a really lousy exchange rate?
Probably not the best buy. The world seems to have hit Peak Smartphone, so Apple’s future isn’t as bright as it once was. I suggest buying Google or Amazon.
Yeah, I can make this work. Remember you can get big financial companies involved by paying them a mere $5-$10 billion in electronic money.
The value of the stocks in the S&P 500 is about $21 trillion. So you could contract with Vanguard to buy $950 billion of stock and only pay an ~5% penalty or less in terms of anticipated stock appreciation. Could they (and their friends) come up with $40 billion of currency?
There is $1.25 trillion dollars of $100 bill currency in circulation. Total vault cash is something like $77 billion. So maybe $40 billion is pushing it. No matter, try for $5 billion. Or $2 billion. Or hell $1: the action is in the purchase of the stock index.
(Detail: actually you would buy a broader based index of stocks, but whatever.)
That would be hard. In 2006 (last date available), total large time deposits in the system (and ~$1 trillion would be a large deposit) amounted to $1.4 trillion. So the banking system would have a lot of difficulty creating that large time deposit, even with a big fee. Which is why they would refer you to their investment advisory services department (NOT FDIC insured! :)). Large Time Deposits - Total (DISCONTINUED) (LTDNS) | FRED | St. Louis Fed
In 2008, the Fed began paying interest on excess reserve deposits.
While maybe a small bank would not be able to handle such a deposit, I’m sure a large bank would be delighted to take your money, pay you 0.10% interest and then deposit the money with the Fed where they would earn 2.4% interest (as of Jan 11, 2019).
I would use it to buy some large-scale infrastructure program (like, for example, a nationwide high’speed rail system, or a nationwide energy-efficiency and resilience retrofit) which would conveniently total to $999 billion… leaving me with a billion in change. Ten million one-hundred-dollar bills? I’m fine if we have to call the bank for a special shipment of bills…
I would leave it all as a tip for Elvis, who would agree to let me take his space ship.
Agreed, good point. Note that there are 5500 banks with an account at the Fed, so our hero could shop around a lot, presumably for a floating rate CD. Arguably, the Fed might balk at such an arrangement, but I figure anyone with the pull to obtain a one trillion dollar bill could probably smooth things over.
All the presidents. They’re having a party. Jimmy Carter’s passed out on the couch.
There’s something interesting about the ideal of a trillion dollar bill, which reminds me of the short story (Steinbeck I think?) The Pearl, in which a pearl fisher finds the biggest pearl anyone has ever seen, and normally a bigger pearl is valuable, but this pearl is so big that the rich people decide to just kill him and take it because it’s so much more valuable than a pearl normally is.
A single object worth a trillion dollars is kind of like that. All the normal calculuses of why you can trust trustworthy institutions kind of go out the window when the value of what’s being discussed gets high enough. Why can you trust banks to keep things safe that are in their safe deposit boxes? Because the value of their reputation for trustworthiness is greater than the value of stealing one person’s box. Same for bodyguards, and anyone involved in financial transactions.
On the other hand, that might not apply to something utterly unique. Presumably in this hypothetical there is only one trillion dollar bill, and it’s more-or-less-publicly-known that you have it, so if it gets stolen there won’t be any way for anyone else to fence it?
The only suggestion that really makes sense is buying 999.99 billion dollars worth of stocks from a brokerage, and pay with cash. But would that really work? I don’t know how the internal financials of a big brokerage work, but presumably there’s some limit to how much stock they could purchase all at once…
Permanent residence at the 888 square meter Presidential Suite at the Banyan Tree Macau and lifetime membership in the GEG Privilege Club(Diamond Level), and just keep my tab open, if you please.
I can imagine 100 billion dollar bills being minted, followed by a bloodbath. In the OP though, everyone knows who owned and who inherited the one trillion dollar bill. So it would be a really difficult item to fence, probably impossible.
The value of the shares traded on the NY stock exchange on an average day is about $30 billion according to Quora. There are other exchanges to consider, but that gives a rough lowball figure.
Someone would have to persuade stockholders to part with a little less than 5% of their shares. Seems hard, but methinks a 20% premium would do the job (quite possibly less), with another 1% paid in commission for the ad campaign, bodyguards, etc. It would take a while to negotiate, but happily it’s all for a good cause (where are we going with this again?).
The $0.99999 trillion CD would also work: even if the Fed decides to stop paying interest on excess reserves, there’s no reason why a bank couldn’t charge a negative interest rate.
But presumably when I buy stock via a brokerage, the brokerage pays for the stock via some money they have sitting around for that purpose. Which is all well and good when I’m buying 30 shares of AT&T. But it’s hard to imagine any brokerage has $1T in liquid assets sitting around ready to spend. Or does it not work that way?
From a logistics view point: Does it have to be a bill? Because there is semi-serious discussion of a $1 trillion coin.
Still not sure what you’d do for change, though.
Customer assets are (by law) strictly segregated at a broker. A broker can lend money to a customer to buy securities (buying “on margin”) but again this is strictly regulated, and limited to 50% of the value of the securities.
(I have no idea how any of this relates to this ridiculous hypothetical.)
An excerpt from the Simpsons trillion-dollar-bill episode alluded to upthread: https://www.youtube.com/watch?v=XmjCLPp8LyU
I think the verb you’re looking for is “was”: Trillion-dollar coin - Wikipedia