since the start of the recession in December 2007 and throughout the recovery, the value of U. S. currency in circulation has risen dramatically. It is now fully 42% higher than it was five years ago
Pointer from Timothy Taylor’s column in the Journal of Economic Perspectives.
Williams argues that people are holding cash as a safe asset, in the form of $100 bills. Keep in mind, though, that another source of the demand for $100 bills is the underground economy.
No. The underground economy uses $20s except for large drug operations, but it is hard to see why that would be surging. Most of this would offshore which makes much sense as foreign banks represent a lot of risk, like Cyprus.
A relative of mine owns a business which normally insists on credit cards these days, but will still relent if a patron is a repeat customer, desires some discretion, is willing to pay in advance, with a slight premium, and puts forwards a security deposit. The bill was usually around $150-$200.
I worked there over a summer many years ago, and I was amazed how often these cash customers paid in $100’s. He says that it’s become more common lately. It’s hard for me to explain since I never pay for anything in hundred dollar bills. But apparently it’s a thing.