What is it about all the Benjamins ($100 Bills)?

With the advent of e-commerce and increased usage of credit cards, intuition might suggest that $100 bills in circulation would not keep up with inflation. However, from 1990 through 2012, the number of $100 bills in circulation has increased by an average of 8.6% per year, far outpacing the average inflation rate of 2.5% for the same period (shown in the chart below).

inflation

$100 bills are not just outrunning inflation, they’re also growing faster than all other US notes, rising from roughly 10% of total paper currency in 1990 to over 26% in 2012. The chart below shows the composition of US paper currency since 1990.

volume

The picture of $100 bill growth is even more dramatic when value of each denomination outstanding is plotted over time.

value

The increased usability of $100 bills is certainly a contributing factor.  And perhaps the increased options to pay with a credit card for even small ticket items has made it so that carrying just a few larger denomination bills for emergencies along with your plastic is a more sensible option.  There is also the possibility that this trend indicates increases in transactions outside the grid, where it might be preferable to pay with cash and avoid a formal transaction record (ie those attempting to avoid taxation or engage in other criminal activity). Whatever the cause, the trend is unmistakable.

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