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In 2016, the United States’ Federal Reserve dished out an approximate $666 million dollars on printing paper money and striking new coins.

A Little Time, A Lot of Money

According to a report by the Federal Reserve, “Expenditures made by the Reserve in 2016 for printing banknotes and manufacturing new coins is estimated at about $666.1 million dollars or $4.4 billion. A rather large number, but still coming in at 0.7% below the budget. And, this is not due to any changes in the amount of money being created, but rather a change in deliveries in between budget years.”

However, it is important to remember that this is only an estimate and not an exact report of the expenses.



When we consider a production cost of 10 cents per unit, and by deferring the surplus to the following year, it would have been necessary to add an additional $20 million to the budget for 2016, which would have brought the total to $686 million. Of course, it isn’t known whether this number was obtained intentionally, but it corresponds perfectly to the production of 7 billion bank notes. And, a single note costs about 10 cents to produce, which brings the total value of all bank notes produced in a single year to $233 billion.

Where Does All the Money Go?

According to the Fed, 75% of the $233 billion went towards replacing old and damaged bank notes. The other 25%, about $60 billion, went to “net payments”.

However, in an encrypted world, it’s impossible to trace exactly where the money went. Still, we know that some banks receive about 6% of the profits earned by the Federal Reserve, which, in this case, corresponds to about 4$ billion for printing alone.



Still, what is the point of all this production? This represents a question that economist have tried to answer for years, without coming up with any actual answer. The process of creating money does not seem to follow any predefined rules. For example, many believe that banks rely on deposits made by their clients to make new loans. However, recently, the Bank of England declared that it is the loans that are used to make new deposits. In other words, banks lend out money that they don’t have; money that doesn’t even exist.

Some might even be tempted to believe that the creation of money is left entirely to the discretion of those in charge and that the authorities alone are the ones who decide on how much money to print.

Lately, the market has seen steady inflation and the value of a dollar is down to 5 cents. This is possibly one of the reasons why the Federal Reserve’s billboard seems to keep changing at a frenzied pace.

The US dollars is based on an indebted system. A system that pays debt with more debt. Banks lend out money that doesn’t even exist and the cost of its production seems completely unreasonable.

We can only speculate that cryptocurrencies such as Ethereum, with its widespread support, decentralized network and impartial binary protocol is a much more objective alternative to that of the Trump Administration.

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