Editorial

Everything You Didn’t Know About the U.S. Dollar

The United States Dollar first came into circulation in 1794, when the Coinage Act was signed by then President George Washington. The same law also created the system where a single dollar was the equivalent of 100 cents.

With both the United States and the rest of the world going through so many changes in the subsequent decades, some may be surprised at the longevity and success of the Dollar.

Even though the design and faces on the various dollar bills may have changed over the years, the currency is still one of the strongest in the world. If you are interested in trading foreign exchange, the Dollar is one of the currencies you are likely to buy.

Below are some facts that you may not have known about the American Dollar.

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In God We Trust

If someone were to look at modern dollar bills, they would assume certain phrases and pictures have always been present. Not only have the Presidents and various national figures who appear on dollar bills changed over time, but so have the phrases on the bills.

For instance, “In God We Trust” is a phrase that only appeared on U.S. coins starting in the American Civil War. It was initially on a smaller circulation of coins, but since 1955, it was permanently added to all American coins, whether you look at a cent, nickel, dime, or quarter.

Cost of Production

The cost of production for U.S. Dollar bills is a lot less than people would imagine. The $1 bill is the cheapest to produce in present circulation, with a cost per bill of roughly 5.5 cents. The $50 bill is one of the most expensive to produce, with a production cost of roughly 20 cents per bill.

Coins also require significant resources to produce. While the nickel, dime, and quarter all have a greater value than their “per coin cost” that is not the case for the penny. The most recent data reveals that it costs the U.S. government more money to produce each penny than the value of the coin.

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Longevity of Bills

The lifespan of a bill depends on its denomination, at least in the United States. Researchers estimate that a $1 bill lasts for around 4.8 years, while a $5 bill has a lifespan of around 4 years.

$10 notes can last for around 3.5 years, while the $100 bill can be in circulation for as many as 18 or 19 years. If you are given an older $100 bill by a bank or grocery store, you may find that it has a very long and interesting history.

Bills Are Redesigned for a Reason

People may wonder why there are so many changes to bills in the United States. The reason is not always political or aesthetic. There may be instances where the government wants to add a particular historical figure to a bill, but that is rarely the reason new bills are added into circulation and older ones are removed.

Counterfeiting of dollars is a significant issue in the United States. As criminals are always crying to create fake currency that is virtually indistinguishable from the real deal, the government also has to remain proactive.

The $100 bill is the one that changes the most, as it is the bill that is most likely to be a target of counterfeiting. The same is true for the $50 bill, while the $20 is also changed every five or six years.

In contrast, the $1 bill has remained the same since 1963. It is the only bill that has not gone through any significant or even minor adjustments in subsequent decades, as the government finds that no one ever attempts to counterfeit $1 bills.

While counterfeiting the $1 bill may be very possible, given its design is so old, there is not much upside. The cost to set up such an operation and continue to get away with it would not even be covered by the number of $1 bills that a criminal organization would be able to print.

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What is the Future of the Dollar?

Despite the world and American markets going through a lot of turmoil in 2022, there is still stability where the country’s currency is concerned. The Dollar Index is not moving, and is still at one of its strongest rates in more than two decades.

One of the reasons why the Dollar is such a strong currency is because investors often see it as a safe way to store their money when there are turbulent economic times.

Even if the United States is among the nations likely to experience a recession in the near future, investors still believe they will likely recover first and strongest when all is said and done.

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