Privilege Equity Management

Financial Markets. Capital. Notes.


This and That


Here are some unrelated (but interesting) things about US Currency.

Since 1969, the US Federal Reserve has been removing large-denomination bills from
circulation. As of May 30, 2009, there were a total of only 165,372 $1000 bills that had not been destroyed.

This specific $1000 bill (Federal Reserve Bank of Atlanta series 1934A Julian/Morgenthau, serial number
F00048388A) is graded PCGS VF20 and is in the possession of Privilege Equity Management and remains
legal tender. When this was printed, two of them could have bought a pretty ritzy, post-depression
new car, say a 1934 Frazer Nash. This note remains legal tender, but is worth considerably more
than $1000 to a collector.


Now this is a seriously nifty car, but that many dollars back then would have also bouhg either
a nice home or even a farm.


Here is a 1928 $100 C-note with Benjamin Franklin from 1928.

This specific $100 bill (Federal Reserve Bank of Cleveland series 1928 Woods/Mellon, serial number D00311548A)
is also in the possession of Privilege Equity Management. It is interesting because series 1928 was the first year of
"small-size" currency vs. the "horseblanket" large-size notes before this time.


A very important thing to notice is that even though it's the first "small-size" note, it is also the last one that says...

The notion of "Redeemable in Gold" ended in 1933 when Franklin Delano Roosevelt made it ILLEGAL to own
gold and the Federal Reserve took over the currency, and why the 1934 $1000 bill above says "legal tender
for all debts..."


Of course, what's important is the perception of the value of "money". To the general public though, the representation of that mone is paper money. Ultimately, a one dollar bill has the same intrinsic value as a one hundred dollar bill. That number is about five cents. including quality control, security, and such related peripheral issues. So ultimately there is the perception of the value of money, but the perception of the value of physical paper money. For our managed currency, let's assume value as assigned by the Federal Reserve Bank.

US one-hundred dollar bills are widely conterfeited, included massive state-sponsored counterfeiting by the Peoples' Republic of North Korea. Counterfeiting has a negative effect on the perception of the value of our currence and hence a slight impact upon the overall fiat money supply M0, MB, M1, M2, M3, and MZM.

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