Monday, September 17, 2007

Sunday dollars+sense: Where the hell are our $100 notes?

Where the hell are our $100 notes? After I wrote about them in the Canberra Times this week I did a radio interview in which I was embarrassed to say that I wasn’t sure what colour they are. I thought they were grey. In fact, $100 notes are green. That’s an indication of how often I see one.

Yet this week’s figures from the Reserve Bank show that there are an extraordinary 167 million $100 notes out there in circulation – eight for each Australian citizen.

Importantly, and unbelievably, there are more of them than there are $20 notes.

Yet there’s not an adult in the country that doesn’t know what colour a $20 note is.

We know where the $100 notes aren’t...A random survey in the US some time back found not a single shopper carrying a $100 note. We know that they are not widely used in automatic teller machines.

We know that shops and taxi drivers often carry them. Try asking for one.

And we know that only a proportion are stored in bank vaults. The old image of banks as storehouses for bundles of cash is outdated. Like all businesses, banks keep their cash balances to a minimum.

And yet, incredibly, $100 notes account for more than one third of the value of the $40 billion worth of notes out there somewhere.

Maybe there are lots of Kerry Packers. He once explained his decision to carry around $225,000 in cash by saying “I like cash. I have a squirrel-like mentality."

But in the year after Packer died the number of $100 notes in circulation actually jumped (by a further eight million). So it can’t have been just him.

Internet banking, eftpos and the GST were all going to dissuade us from using cash. In fact the number of $100 notes in circulation has climbed 50 per cent since the GST came in.

Perhaps its poker. One poker player told me during the week to say he had four in his wallet. Not long before, he had 40 in a bankroll. They are used at casinos and racecourses as well.

And to cover the tracks of a surprisingly large number of Australians who want to avoid the attention of the police or the Tax Office.

They are quiet about it. Which is why many of the rest of us don’t know who they are and don’t know the notes are green.