How Long Would It Take to Actually Print the Money?

In Money Supply on March 25, 2011 by CQCA

There’s a misconception that the Federal Reserve is actually printing money.  As Chairman Bernanke stated: “One myth that’s out there is we’re printing money. We’re not printing money. The amount of currency in circulation is not changing.”

This is technically true, considering the vast amount of currency is digital.  Most money supply increases are the result of adding numbers into a computer, not actually rolling money out of a printing press.  So, how long would it take for the U.S. Bureau of Engraving and Printing to actually print the money?

In February, 2006, the last time data is available from the Federal Reserve, the total money supply (M3) stood at $10.2761 trillion.  Currency (M0) at the same time stood at $733.6 billion.

If M0 were subtracted from M3, we would have $10,275.6 billion.  According to the Bureau of Engraving and Printing’s website, they printed $130.3 billion worth of bills in 2006.  However, they also state, “95% of the notes printed each year are used to replace notes already in, or taken out of circulation.”

This means only 5% is completely new currency, or $6.515 billion.  If the money supply were kept constant at $10,275.6 billion, and $6.515 billion was printed every year, it would take over 1,577 years to catch up.


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