Do USA banknotes go out of date ?

[broadgage]

I am thinking of aquiring a small stash of dollars, probably in US$20 bills, as these are readily obtainable from UK banks.

Do these notes remain valid for ever ? or they periodicly superseded by new designs ?

Here in the UK our Bank of England notes are from time to time replaced with new designs, and after a year or so the old ones are no longer accepted in shops etc. (they can still be exchanged at the Bank of England for new notes)

I feel it sensible to have a supply of USA $ just in case the UK £ goes the way of the Icelandic currency.
Not much point though if the notes are liable to become obsolete.

 

[Alex K.]

Not that I'm aware of. We did, however, get a new design on some denominations, like the $5, $20, and I believe $50, but it is just more colorful, and both old and new are still accepted and given at banks and stores.

 

[DonShock]

US currency is not superceded when they do new designs. Both the old and new bills remain in circulation at the same time. The old ones get removed in the normal processing by financial institutions as they wear out over time.

As far as I know, even very old notes could theoretically be used as cash although they would probably be worth more as collectables. Of course, your local store probably isn't going to recognize them. That happens sometimes today with the $2 bill that was issued back in the 70's. They are so rarely circulated that some younger clerks think they are fakes. There is even a special office that will take your burnt, moldy, or otherwise mutilated currency and reconstruct the bills enough to determine the value and issue you that amount in new cash.

 

[Databyter]

I am thinking of aquiring a small stash of dollars, probably in US$20 bills, as these are readily obtainable from UK banks.

Do these notes remain valid for ever ? or they periodicly superseded by new designs ?

Here in the UK our Bank of England notes are from time to time replaced with new designs, and after a year or so the old ones are no longer accepted in shops etc. (they can still be exchanged at the Bank of England for new notes)

I feel it sensible to have a supply of USA $ just in case the UK £ goes the way of the Icelandic currency.
Not much point though if the notes are liable to become obsolete.

You're better off buying an easily sold commodity such as gold or silver.

The dollar is slated to take a big plunge this summer, and may not recover.

 

[Diesel_Bomber]

I don't know about this summer, but I agree with Databyter. I would not consider our USA $$$ to be reliable.

 

[Chauncey Gardner]

Echo the advice to stay out of the dollar, particulary holding it & eating the inflation & opportunity cost.

 

[Ken_McE]

Do these notes remain valid for ever ? or they periodicly superseded by new designs ?

The paper currency evolves slowly over time. Attempts to make it harder to counterfeit seem to be what drives this. Recently they have moved the pictures over to one side and added a little color. The old notes still work fine. I suppose they could change this, but I don't believe they have invaladated currency since the end of the American Civil War, when Confederate currency went out of circulation.

I feel it sensible to have a supply of USA $ just in case the UK £ goes the way of the Icelandic currency.

There are odd things going on with the US economy and therefore its currency. My personal opinion, not based on any studies, is that inflation is likely in the near future. If this should happen your dollars would lose some value in storage.

To have some dollars around is reasonable. They are accepted essentially everywhere. You might try a mixed basket with different currencies. Your assumption here would be that not all of them would go down at once. Perhaps leftover Francs or Deutsche Marks would be usefull? If the króna has bottomed out, and if you can use them in Britain, now would be the time to get some. The problem here of course is to get something that you can readily use.

There is something to be said for the jewels and precious metals idea. It is unlikely that the value of these things will go down. The metals have value in their own right because of what they are. Jewelry is popular just because we like it, we have always liked it, and I expect we will always like it. The trick here is to not pay too much of a surcharge when you first get the items.

 

[Apollo Cree]

In theory, US banknotes remain "valid" forever.

At one time, it was illegal to own US gold certificates, but it's now legal. http://en.wikipedia.org/wiki/Gold_certificate

Gold and silver certificates are no longer redeemable for gold or silver, but can be converted into equivalent "paper" notes. (They usually have a higher value as a collectible note.)

The US government doesn't like physical currency and would like to require everything to be done with checks and electronic transactions so they can be sure they can collect taxes and otherwise control the people's money.

The US government has stopped printing all denominations of more than $100, but will still exchange them for current denominations, and destroys them if they pass through a US bank.

I would not be surprised if the US government doesn't decide at some time to "repudiate" some old notes, but allow you to convert them to the current notes. They would claim it's to fight terrorism, drug smuggling, and counterfeiting. I'd expect them to require you to fill out some paperwork to exchange large amounts of old currency for new.

One could speculate that the real reason is not to fight terrorism and drugs, but to collect taxes, and to keep control of the money supply to help keep the peasants in line.

There's been a lot of talk about the US government wanting to get rid of the $100 bill to cut down on the "underground economy," but this has been resisted by a lot of people.

It's been said that US $100 bills are the backbone of the underground economy world wide. In once sense, the US government would like to get rid of all the $100 (and maybe $50) bills to make sure they have better control of the money worldwide. One problem with this is that there are a lot of $100 bills circulating in foreign countries for their underground/cash economies. If people overseas switched from, for instance, US$ to Euros, this could have a bad economic effect. The US government would have to buy a lot of Euros to replace the US bills being used in the worldwide underground economy.

The EU produces a 500 Euro note. There has been some debate that this is so large in order to allow the EU to transition the underground economy to Euros and get some of the "free loan" benefit of having your currency being used out of the country.

I believe EU notes DO expire and become worthless some time after they are replaced by a new issue unless you exchange them before the expiration date.

 

[HarryN]

I can understand your concern about the local currency, as we all have concerns about our government debts, high unemployment, merchandise trade deficit, etc.

From a historical perspective, we probably should consider what happened in the mid 1980s - stagflation. No real growth, but lots of inflation. This would be consistent with previously economic cycles like we have gone through over the past 50 years.

The currency systems are pretty gamed, but possibly the Euro would be a better hedge and more locally useful.

Its useful to consider what the Chinese are buying up when looking for inflation hedges:
- copper, copper ore, copper scrap, copper mines
- iron, iron ore, iron scrap, iron mines
- Aluminum, etc.
- Lithium reserves
- Rare earth metals and related
- Companies, esp. in the US and Germany. Most of this is done using a third party hedge fun, but basically, its all under China investment control
- Real estate in some markets

What are they buying it with:
- US dollars (especially)
- Euros (some)
- UK Pound (yes)

Obviously they have an advantage in that they buy both to dump the currencies, and they need the mineral anyway, but their thinking is clear. Trade in currency for minerals, esp. ore types.

Information correction to original comment below:
___________________
You might notice that gold is not that high on their list. They use it, but not in qty like the others. The other reason might be that gold prices are historically high, while other commodities are reasonably low.
_____________________________________________

Edit: - It was correctly pointed out that the Chinese are also stocking up other minerals, including gold. Some purchases have been more obvious than others.

 

[ElectronGuru]

If an investor has a reasonable expectation of positive inflation, then better than investing in US currency would be to invest in US Treasury Inflation Protected Securities (TIPS).

+1

If a house burns to the ground and it turns out a guy in 1925 used US bills (bank notes) for insulation, provided 51% of any bill can pass examination, each can be exchanged for real currency.

However, each dollar will have lost so much value, it might as well have burned away.

Gold is a store of value outside the inflationary deflationary loop of political fiat currency. The OP was looking for some insight on diversification into another fiat currency. I feel that this is not the way to protect yourself from a loss of value.

+1

Gold is not an investment, it is a security blanket. The 'value' of gold is not realized unless and until a society deteriorates far enough that it can be used for barter to buy diminishing supplies. At that point, it 'returns' to being the defacto currency. And at that point, you would no longer have to worry about things like how to get to work and what to do with your investments.

Assuming society holds together, a second factor to inflation is opportunity cost. This is what the money could have been doing (earning) while it was tied up in non earning assets.

All of this discussion comes down to a single thing, confidence. Historically, the best time to time to invest is when things are undervalued. And things tend to be the most undervalued when confidence is low.

 

[BigMHoff]

Buy ammo.

 

[Squidboy]

As someone else living in the UK I see absolutely no point in holding any foreign currency.

If the UK economy or banks get to the point where you need US dollars, then you are going to have a lot more to worry about than how many greenbacks you have.

If your looking for a guaranteed way to have something of worth, do what the SAS and RAF do when they get dropped in the arse end of nowhere. During the first gulf war they carried twenty gold sovereigns each as part of their survival kit. It would buy them travel out of the country or let them barter for vehicles with the locals.

Trouble is gold prices are already high. I really dont think you need dollars or gold to be honest.

 

[Badbeams3]

I believe China is the #1 producer of gold...surpassed south Africa in 2007. But me thinks the Chinese Gov would just assume let the majority rest underground in their mines...why flood the world with gold? Just drive the value down. Better a controlled release. Same as oil.

Don`t know what a good safe investment would be. Maybe iron. Maybe cement? A lot of old bridges. Maybe a coffin company...a lot of my friends are getting old...propane :devil:

 

[GLOCK18]

I would recommend bearer bonds in 10k increments.

 

[Ken_McE]

"[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.

Mr. Buffet is off about that. gold is a high quality electrical conductor. The only reason we use copper is because we don't have enough gold to wire everything.

Jewelry is an old and well established use for gold. It works easily, holds fine details, looks good against human skin, is hypoallergenic, and does not corrode. There are no superior substitutes.

The price of gold may be moved up by manipulators, but it is hard to see it losing all value so long as people decorate themselves or use electricity.

PS, guys, what's this "fiat money" business?

BigMHoff:
Buy ammo.

He can't, he's a Brit. They need to file an application if they want to buy so much as a firecracker.

Flashaholic:
The dollar is slated to take a big plunge this summer, and may not recover.

How do you know?

 

[LuxLuthor]

While $500 & $1,000 bills are relatively common. Count your blessings if you still have a $5,000 or $10,000 bill. Details and photos here.

 

[Illum]

If they do go out of date, such as a complete redesign, etc which does happen every couple hundred years Banks will still exchange them without additional cost.

Looking at old bills with hysterical numbers always reminds me of the Deutsche Marks printed in the 1920s...10 million, 20 million

 

[broadgage]

I don't know about this summer, but I agree with Databyter. I would not consider our USA $$$ to be reliable.

Neither would I ! But I still feel that a SMALL stash of $ is prudent to avoid putting "all my eggs in one basket"
Gold is arguably a better bet, but is not readily spent on small purchases.

I have a small supply of gold and also some Euros, but was thinking of some $ for spreading the risk, I would consider this to be more of a disaster prep than an investment.

 

[Archie Cruz]

Both UK Pounds AND USD are 'toast'.
Collect Chinese Yuan, Euro, FR Swiss instead.
USD are mostly useful to those of us that use it as legal tender and that's all.:welcome:

I am thinking of aquiring a small stash of dollars, probably in US$20 bills, as these are readily obtainable from UK banks.

Do these notes remain valid for ever ? or they periodicly superseded by new designs ?

Here in the UK our Bank of England notes are from time to time replaced with new designs, and after a year or so the old ones are no longer accepted in shops etc. (they can still be exchanged at the Bank of England for new notes)

I feel it sensible to have a supply of USA $ just in case the UK £ goes the way of the Icelandic currency.
Not much point though if the notes are liable to become obsolete.

 

[Ken_McE]

Broadgage:
But I still feel that a SMALL stash of $ is prudent to avoid putting "all my eggs in one basket"
Gold is arguably a better bet, but is not readily spent on small purchases.

Nicely put.

Both UK Pounds AND USD are 'toast'.

For those of us who don't follow these things, how can you tell?

Collect Chinese Yuan, Euro, FR Swiss instead.

Yuan or Yen would be good in that they come from a whole 'nother region/economy, but I'm thinking they would be a little hard to spend on the street. I think the O.P. wants something simple and low-fuss.