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Show the utah ENTERPRISE! n O surprisingly large number of high demomination currency is The Fed speculates individuals are hoarding . A in circulation today. Someone out theres hoarding big bucks Individuals in the United States now hold a whopping $85 billion in coin and paper currency, according to a study conducted for the Federal Reserve Bank. The study also said a large portion of the currency outstanding is in $50 More news... more sports... more business reports, more than any Salt Ldke radio station. , ( . i. oiyn'P18 ,'r'ii . and $100 notes, and the hoarding of large denominations is becoming more common. Bill Burke, director of public information for the San Francisco branch of the Federal Reserve said the total outstanding comes to about .. sGE $1,000 for each family in the He said the study country. pointed out that the average family in the United States holds nowhere near $1,000 in cash. "Most of the average familys cash is in the form of demand and time deposits at commercial banks. The fact that most families do not hold large amounts of cash leads some analysts to the conclusion that there is a lot of hoarding going on. Further, Burke said some believe the large quantity of cash outstanding "could mean its being used for illegal transactions. The exact reason for the increasing amounts of large notes isnt clear. Burke said, "There is some evidence suggesting denomination that illegal transactions usualBut ly require large notes. he said there arc other factors which could account for the rise of high denomination bills. With Sf hic HP,'" he' e?m.o ""f Sionta'ie ' eo,r8C call a"d 0ver us the jve 0( tion,il send sales"8' we , keys and 'UflC"Tall 'he O,jrT,PS6495S0. a savings rs BUS"1! Mach'f Inflation is one factor most economists believe affects the size of the note most commonly used, Burke said many economists, and especially Milton Freidcman, recent Nobel prize winner, have demonstrated that any nation experiencing high rates of price inflation will bring larger and larger denominations into common use. Burke did not know how the $1,000 per family statistic compares with past periods. He did say, however, he didnt think the change was all that dramatic if compared on a real basis. "If we are comparing the real values of currency outstanding, I don't think youll And the current flgure all that exciting. The study was conducted for the Fed to chart currency movements. Currency is of some concern to the Federal Reserve because the more currency outstanding, the less the intended effect monetary policy has on the level of the money supply. The study estimated that of the $85 billion in currency outstanding, approximately 40 percent was in $50 and $100 notes. Further,' the study suggests much of the currency outstanding is being hoarded by individuals. |