Personal Finance

Who is using all this cash?

  • Last Updated:
  • Apr 21st, 2017 6:40 am
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[OP]
Sr. Member
Jan 9, 2011
562 posts
265 upvotes
Vancouver

Who is using all this cash?

With fewer and fewer people using cash these days, it would stand to reason that there is less demand, so banks would order less of it, and less would be in circulation. But the amount of cash in circulation keeps going up and up every year. Here's the change in the number of actual bills in circulation between 2004 and 2016:

$5: up 37%
$10: up 32%
$20: up 29%
$50: up 85%
$100: up 219%

Where is all of this cash if not in our wallets?

Source: Bank of Canada Banking and Financial Statistics report, February 2017, page 96

That table tells some other interesting stories; like how over the last 12 years there is an average of $5,542 worth of old $1 and $2 bills deposited into banks and removed from circulation every business day of the year.
60 replies
Deal Addict
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Nov 13, 2010
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Scarborough
Cash is king, its needed for everything.
do u pay bus fare with CC/debit? lol
Deal Addict
Dec 28, 2008
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Toronto
Cash in circulation tends to track nominal GDP growth.
Member
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Oct 19, 2016
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Toronto
one word .... INFLATION

Kiraly wrote:
Apr 15th, 2017 12:23 pm
With fewer and fewer people using cash these days, it would stand to reason that there is less demand, so banks would order less of it, and less would be in circulation. But the amount of cash in circulation keeps going up and up every year. Here's the change in the number of actual bills in circulation between 2004 and 2016:

$5: up 37%
$10: up 32%
$20: up 29%
$50: up 85%
$100: up 219%

Where is all of this cash if not in our wallets?

Source: Bank of Canada Banking and Financial Statistics report, February 2017, page 96

That table tells some other interesting stories; like how over the last 12 years there is an average of $5,542 worth of old $1 and $2 bills deposited into banks and removed from circulation every business day of the year.
[OP]
Sr. Member
Jan 9, 2011
562 posts
265 upvotes
Vancouver
BryceS wrote:
Apr 15th, 2017 1:51 pm
Cash in circulation tends to track nominal GDP growth.
mrtrump wrote:
Apr 15th, 2017 2:44 pm
one word .... INFLATION
Sure, but there's much more to the story than inflation and GDP growth. from 2004 to 2016, cumulative inflation was 25%, and GDP growth was under 10%. But the dollar value of cash in circulation is up by 74% over the same period. The Bank of Canada only issues cash to meet what financial institutions order to satisfy customer demand. Considering that people are using much less cash than they used to, where is all of this additional demand coming from? Note that the bulk of the increase is in $100 bills.
Deal Guru
Feb 29, 2008
14876 posts
1554 upvotes
Montreal
Kiraly wrote:
Apr 15th, 2017 12:23 pm
With fewer and fewer people using cash these days, it would stand to reason that there is less demand, so banks would order less of it, and less would be in circulation. But the amount of cash in circulation keeps going up and up every year. Here's the change in the number of actual bills in circulation between 2004 and 2016:

$5: up 37%
$10: up 32%
$20: up 29%
$50: up 85%
$100: up 219%

Where is all of this cash if not in our wallets?

Source: Bank of Canada Banking and Financial Statistics report, February 2017, page 96

That table tells some other interesting stories; like how over the last 12 years there is an average of $5,542 worth of old $1 and $2 bills deposited into banks and removed from circulation every business day of the year.
Coins disappear.

It's a well known phenomenon.


http://news.nationalpost.com/news/canad ... -bills/amp
Deal Expert
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Jul 30, 2007
17581 posts
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Toronto
Have you seen the prices when going grocery shopping (asides from those using credit cards for payment), $50 / $100 does not buy you much this day.
Deal Addict
May 31, 2007
3762 posts
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Underground economy would be my guess.
Deal Addict
Jan 2, 2015
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Toronto, ON
apnayloags wrote:
Apr 15th, 2017 1:42 pm
Cash is king, its needed for everything.
do u pay bus fare with CC/debit? lol
Yes. Direct debit for a Metropass, or use a credit card to pay for Presto.

The former is impractical for many people (if you live in Toronto and don't take transit much) but I'd rather get my 0.5-2% cashback when putting money on a Presto card.
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Aug 24, 2016
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apnayloags wrote:
Apr 15th, 2017 1:42 pm
do u pay bus fare with CC/debit? lol
Actually yes I do.
I buy bus passes at 7-11 with my Scotia Amex Gold.
The 7-11 shows up as a grocery retailer and gets me 4% return.
FYI, cash is NOT king, and hasn't been for years.
Deal Addict
Nov 2, 2013
4283 posts
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Edmonton, AB
Black market (especially for escorts and drugs) and Asian restaurants in Richmond, BC? lol

Also, for tips and strip clubs. Former is much more convenient when you just throw some bills.
Sr. Member
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Mar 9, 2012
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KITCHENER
Kiraly wrote:
Apr 15th, 2017 12:23 pm
That table tells some other interesting stories; like how over the last 12 years there is an average of $5,542 worth of old $1 and $2 bills deposited into banks and removed from circulation every business day of the year.
I was justing thinking the other day, now with the polymer notes, wouldn't it be nice to have $1 ad $2 bills again? I hate loose change. With a serious passion.

Oh well...
Deal Addict
Jan 2, 2015
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Toronto, ON
jeff1970 wrote:
Apr 15th, 2017 7:30 pm
I was justing thinking the other day, now with the polymer notes, wouldn't it be nice to have $1 ad $2 bills again? I hate loose change. With a serious passion.

Oh well...
I have not seen a vending machine that takes bills. But I have seen some that take cards. (I wish the one at work had that feature.)
[OP]
Sr. Member
Jan 9, 2011
562 posts
265 upvotes
Vancouver
You wouldn't hate loose change so much if the coin sizes actually matched the values they represent. The dime and quarter's sizes have been the same for 147 years. If you could buy a dollar's worth of stuff with a coin the size of a dime (which is actually how things were up until the 1960s) coins would actually be the useful things they were designed to be, and not the nuisances they have become.
Deal Addict
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Aug 9, 2013
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Toronto
apnayloags wrote:
Apr 15th, 2017 1:42 pm
do u pay bus fare with CC/debit? lol
I pay my metropass using debit and credit card for Presto. Dumb question lol

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