Monday, December 07, 2009

Mattress stuffers 

Demand for �50 notes has risen sharply during the recession because the public has lost faith in the banks, the Bank of England's chief cashier Andrew Bailey has suggested.

..."Two features of the current situation strike me as most relevant in explaining this development: first, lower levels of public confidence in the banking system and second, low interest rates," he said.
Source. That got me to wonder how much we are issuing in $100 bills here in the USA. Turns out the data is only annual, but we did issue $55 billion additional C-notes in 2008. As of November 23, there isn't much more in total currency issued -- no breakdown of the size of the notes there. Then again, when your economy contracts you would expect lower demand for currency, which makes the UK figures all the more surprising.

UPDATE: Paul Murphy suggests a third reason: worker remittances. But if anything remittances are down, not up in 2009. I have had several reports on lower remittances into Armenia this year, perhaps by more than a third from 2008.

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