The U.S. dollar was first designated as the world's currency in the 1944 Bretton Woods Agreement, and it is the most powerfulcurrency in the world. It's backed by the world's largest economy, the United States. The strength of the U.S. economy supports the dollar's use as aglobal currency.
The term "U.S. dollar" refers to a specific denomination and the U.S. currency in general. It was initially traded as a coin worth its weight in silver or gold and then exchanged as a paper note redeemable in gold. During the 1970s, thegold standardwas dropped, and thedollar's valuewas allowed to float. Today, although its value fluctuates, it's in strong demand.
Although the dollar is still represented by currency, its true value is represented by credit. Now more than ever, the U.S. dollar is the real symbol of faith in thepower of the U.S. economy.
U.S. Dollar Symbolism
The dollar symbol itself ($) is said to be derived from the previously used ps, which represented the Mexican peso, Spanish piaster, or "pieces of eight." People eventually began to write the 'P' over the 'S,' then a single line over the 'S,' creating the dollar symbol.
There has been a great deal of controversy surrounding the enigmatic symbols on the U.S. dollar bill. For instance, the arrows being held by the eagle on the dollar bill were originally held in the right talon. Arrows symbolize war, and the right side signifies dominance. Some took that to mean dominance by war. In fact, the Founding Fathers used these symbols to convey strong messages; however, they have become garbled over the years.
The dollar bill shows the Great Shield of the United States, which contains:
- The American eagle flying free, holding 13 arrows of war in its non-dominant left talon and an olive branch for peace in its dominant right talon.
- The banner in its beak reads "E Pluribus Unum," meaning “Out of Many, One.”
- The shield's horizontal blue band represents Congress uniting the original 13 colonies, represented by 13 red and white vertical stripes.
- The 13 stars above the eagle representa new nation or a constellation in the universe.
- Red stands for valor, white stands for purity, and blue stands for justice.
On the reverse of the Great Seal stands an unfinished pyramid of 13 rows, symbolizing strength and duration. The first row reads, "1776" in Roman numerals. The banner below reads "Novus Ordo Seclorum," which means "A New Order of the Ages." This statement refers to a new form of government or "the beginning of the new American Era." The all-seeing eye of the Divine is bordered by the phrase "Annuit Coeptis." This Latin phrase means "Providence Has Favored Our Undertakings."
There are six denominations of coins produced, with the costs to produce them as follows:
- Penny (worth 1 cent): In 2019,pennies cost taxpayers about $68 million.
- Nickel (worth 5 cents): Nickels add about $21 million to the U.S. debt.
- Dime (worth 10 cents): Dimes only cost 3.7 cents each to produce.
- Quarter (worth 25 cents): These costs 9 cents to make and distribute.
- Half Dollar (worth 50 cents): These cost about 6.6 cents to produce.
- Dollar (worth 100 cents): The United States is the only developed country that still uses $1 bills.
The United States no longer produces the half-cent coin, the two-cent coin, the three-cent coin, the half-dime coin (different from the nickel), or the twenty-cent coin.
U.S. Dollar Bills
There are seven denominations in bills still being printed: $1, $2, $5, $10, $20, $50, and $100. There are five larger denominations that are no longer being printed; however, some of these are held by collectors and are still considered legal tender: the $500, $1,000, $5,000, $10,000 bills. The $100,000 bill was never circulated and is not legally held by collectors or consumers.
The pie chart below shows how many bills of each denomination were circulating in 2018. This chart represents the first year that the number of $100 bills circulating was larger than the number of $1 bills.
The Federal Reserve, as the nation'scentral bank, is responsible for making sure that enough currency is in circulation. It commissions the U.S. Treasury Department's Bureau of Engraving and Printing to print the bills.It also authorizes its Mint Department to cast the coins. Once produced, the currency is shipped to the Federal Reserve banks, where members can exchange credit for currency as needed.
Very few older and current bills have pictures of people other than presidents. The three who were not are Alexander Hamilton, the first Secretary of the Treasury, on the $10 bill; Benjamin Franklin on the $100 bill; and Salmon P. Chase, Treasury Secretary during the Civil War, on the $10,000 bill, which is no longer printed.
Dollar Exchange Rate Conversion
When you travel overseas or conduct any international business, you want to know how much your dollar will buy. To find out, you must convert your currency to the local one by using anexchange rate.
Traders in theforeign exchangemarket determine the dollar's value as compared to other currencies every moment. The rates are determined by a wide variety of factors: the interest rate paid on the dollar, how rapidly the economy is growing, and how large the country'sdebt-to-GDP ratiois.
In addition toexchange rates, the dollar's value is measured byU.S. Treasury notes and the number of dollars held in reserves by foreign governments. Countries that export more to the U.S. than they import hold an excess of dollars, which increases the value of the dollar by absorbing theexcesssupply. This exchange also makes the value of their currency weaker, allowing their goods to seem cheaper. In addition to holding onto dollars, these countries buy Treasury notes, which helps make the dollar stronger.
Thevalue of the U.S. dollar is measured by exchange rates, Treasury notes, and foreign exchange reserves.
The World's Reserve Currency
Part of the reason for thedollar's strengthis its role as the world's reserve currency. Most people around the world will accept a $20 bill for payment in lieu of their own country's currency; most oil contracts are in dollars, and 86% of all foreign exchange trade is conducted in dollars.
The dollar's unique status as a world currency is due to the Bretton Woods Agreement, in which the victors of World War II agreed to peg their currency to the dollar and tie it to a fixed amount of gold. President Nixon ended the gold standard in 1973, which allowed the dollar to have a floating value rather than a fixed one.
Disconnecting the dollar from gold had the effect of tying it to the country's economy and the three factors mentioned earlier: exchange rates, Treasury notes, and foreign exchange reserves.
Frequently Asked Questions (FAQs)
How do you check a U.S. dollar to make sure it's real?
Watermarks and security threads are the best way to verify the authenticity of a dollar bill. To learn more about how to verify banknotes, visit the federal government's Currency Education Program website, or download the program's Teller Toolkit.
How do you short the U.S. dollar?
Shorting the dollar can be as easy as exchanging it for another currency. If you think the dollar's value will fall, then trade your U.S. dollars for another currency that you expect to remain relatively strong. You can also short the dollar index (DXY) or buy an ETF like UDN that is designed to replicate a short DXY position.
In the center, some people believe there is a carpenter's T-square, a tool used for an even cut. But that image is actually a chevron with 13 stars representing the 13 original colonies. Underneath is a key that is intended to represent a symbol of authority. If you turn the bill over, you will see two circles.What do the symbols on the back of a one dollar bill mean? ›
Symbol: Eagle's talons
The eagle on the back of the $1 bill holds an olive branch (representing peace) in its right talon and arrows (symbolizing war) in its left talon.
Portrait and Vignette. The $1 note features a portrait of George Washington on the front of the note and an image of the Great Seal of the United States on the back of the note.What are the two major images on the back of the $1 bill? ›
The symbols on the flip side of the dollar hold a lot of meaning. They include both sides of The Great Seal of the U.S., as well as the bill's plate serial number. Let's start there: The plate serial number (56) again simply identifies the actual engraving plate this side of the note was printed on.What does the pyramid on the back of a dollar bill mean? ›
The pyramid is part of the Great Seal of the United States. The Great Seal was first used on the reverse of the one-dollar Federal Reserve note in 1935. According to the State Department, which is the official keeper of the Seal, the pyramid symbolizes strength and durability.How can you tell if a bill is rare? ›
A radar serial number reads the same backwards and forwards, like a palindrome. For example, 06288260. A good condition, uncirculated $1 radar could sell for about $25. If only the end two digits are different (like 27777772), you've got a super radar, which is much more rare and valuable.What does God stand for on the dollar bill? ›
Adding “In God We Trust” to currency, Bennett believed, would “serve as a constant reminder” that the nation's political and economic fortunes were tied to its spiritual faith. The inscription had appeared on most U.S. coins since the Civil War, when Treasury Secretary Salmon P. Chase first urged its use.What is the rarest American dollar? ›
1. The 1794 Flowing Hair Silver Dollar. The 1794 Flowing Hair Silver Dollar may sit atop the rankings of the most expensive coin ever sold, at least for now. Some experts believe that it was the first silver dollar struck by the U.S.Where is the spider on the dollar bill? ›
In the upper-right corner of the bill, above the left of the number "1" there appears to be a tiny creature peeking out. Some say it's an owl, others see a spider because of the web design behind the "1." Some say it's part of a skull and crossbones when turned sideways.What does the little number on the back of a dollar mean? ›
Back Plate Number (2) – A small number found at the lower right of the Back of a bill; officially known as a Check Number. This number provides a cross-reference to the Plate Serial Number on the front of the bill. Bank Note – A piece of paper currency issued by a bank, rather than the federal government.
Noun. small, unmarked bills pl (plural only) (set phrase) Paper currency which consists of small-denomination banknotes that have not been inscribed with hidden markings which would help authorities identify and trace them.What is the red seal on a 2 dollar bill? ›
The back of the note features Thomas Jefferson's home, Monticello, engraved by Joachim C. Benzing. In 1963, the Treasury Department added the motto "IN GOD WE TRUST" to the back of the note and placed it over the engraving of Monticello. The treasury seal found on the note is bright red.Why don't we use the 2 dollar bill? ›
From 1929 to 1941, the country experienced the longest and deepest economic downturn to date, the Great Depression. During that time, most goods and services were less than a dollar, making paper currency impractical to use. As need and use declined over the years, the Federal Reserve stopped printing $2 bills in 1966.Why is the 2 dollar bill rare? ›
Someone holding a $2 bill was thought to have sold a vote to a crooked politician. The Treasury Department during the 1900s tried unsuccessfully several times to popularize the use of the $2 bill. In 1966, it gave up and discontinued printing the bills “because a lack of public demand.”Where is the owl on the $1 bill? ›
Grab a magnifying glass, and check out the top right corner of your dollar bill. Just to the left of the top of the “1,” there is what some believe appears to be either a tiny spider or owl in the “webbing” pattern.What bill has a pyramid? ›
The iconic Great Seal was added in 1935, representing the first time that the pyramid and eagle motif was found on the American dollar bill.What is the most valuable bill? ›
Today, a $500 or $1,000 bill may be worth more than its face value. The $10,000 bill was the largest denomination ever to be printed for public consumption. Collectors cannot legally hold a $100,000 bill.Which bills are hardest to counterfeit? ›
One estimate detailed that more than 75% of the nearly $600 billion in $100 bills circulates outside of the U.S. Due to its popularity, the American $100 bill is one of the most counterfeited currencies, but also one of the most difficult to fake.What is God's currency? ›
In God's Currency, Neil Kennedy teaches you how to unlock the doors of Heaven's economy for your life. You will learn how to deal in the currency of God. You will begin to flow freely in the different modes of exchange in His Kingdom and you will gain a position of dominance over money.What is a Jesus dollar? ›
This Special Edition Collectible Dollar Bill depicts the face of Jesus Christ on the front and Psalm 23 on the back. A very special bill that commemorates faith in the Lord.
On July 30, 1956, the 84th Congress passed a joint resolution "declaring 'IN GOD WE TRUST' the national motto of the United States." The resolution passed both the House and the Senate unanimously and without debate. It replaced E pluribus unum, which had existed before as a de facto official motto.
" These are 'Banana Note' dollars, the currency issued during the Japanese occupation. They were referred to as banana money because of the banana tree motif printed on the note. Overprinting of these notes led to hyperinflation and a severe depreciation in the value of the banana note.What is a lucky dollar? ›
The 'lucky dollar' as it is called in the United States - a dollar bill folded in eight - is a good luck charm.Is there a 3 dollar bill? ›
Though a gold three-dollar coin was produced in the 1800s, no three-dollar bill has ever been produced. Various fake US$3 bills have also been released over time.Can I get a $500 bill from the bank? ›
Can You Get a 500 Dollar Bill from the Bank? Since the bill stopped rolling off the BEP's presses in 1945 and got yanked from circulation 50 years ago, your bank's ATM won't be spitting out any $500 bills these days, nor will your neighborhood teller give you this rare paper currency.What is a ladder bill? ›
A ladder bill is paper currency that has serial numbers that increases or decreases by one per number. For example, 1, 2, 3, 4, 5, 6, & 6, 5, 4, 3, 2, 1, are ladder numbers. Because the number format must hold the pattern throughout the serial number, broken ladder bills do not exist.What animal is hidden on the $1 bill? ›
Still, most of Ovason's material appears to be historically grounded and much of it is fascinating. The dollar sign""$"", for example, likely originated from the symbol of a snake curving around a cross, much like the god Mercury's caduceus.Is there a snake on the dollar bill? ›
On the Great Seal of the United States, the eagle doesn't have a serpent but ribbon in its beak that reads, "E Pluribus Unum." Nevertheless, the eagle-serpent imagery isn't uniquely American. Also on the backside of the $1 bill is the reverse of the Great Seal which is rich with symbolism.Why are there dollar bills on the ceiling? ›
Looking for a safe place to stow their cash, miners hoping to strike it rich would “write their names on their 'Get Home' money and staple it to the ceiling of the local bar” as a back-up plan.What are bait bills? ›
Bait money or bait bills are bills with known serial numbers, used by banks to aid the tracing of bank robbers. The serial numbers are recorded by the bank either by making a copy or by listing in a log book. During a bank robbery, if a robber has taken the bait money, details of this can be passed on to the police.
Red Seal US Dollars (US Notes)
Which means they were direct obligations by the US government and that the individual who had them owned a piece of the national debt. These notes went out of circulation in the 1960s and were removed as legal tender in the mid '90s but are still spendable currency.
Blue Seal US Dollars (Silver Certificates)
Similar to their gold standard cousins, the blue seal US bank notes were in fact silver certificates. These notes first began circulating in 1878 and were backed by the US stockpile of silver bullion. These certificates could be redeemed for their value in silver.
Most large size two-dollar bills issued from 1862 through 1918, are highly collectible and are worth at least $100 in well-circulated condition. Uncirculated large size notes are worth at least $500 and can go up to $10,000 or more.What does Brown seal mean on a dollar bill? ›
During World War II, special versions of Federal Reserve Notes and Silver Certificates were printed with the word HAWAII on each end, and circulated only in Hawaii between 1942 and 1944. The seal and serial numbers were brown to further distinguish them from regular notes.Are red Seal notes worth anything? ›
Star notes have a serial number that has a red star by the serial number. In circulated conditions 1953 red seal are worth about $12. The Uncirculated 1953 five dollar red seal star notes are worth up to $100. The red seal appears on United States Notes issued from from 1862 to 1971.Can you get 2 dollar bills at the bank? ›
The Federal Reserve has been printing $2 regularly since 1976, after ending a decade-long hiatus. You can walk up to the teller at your bank, ask to withdraw a $2 bill, and they will give it to you.Are $2 bills illegal? ›
In August 1966, the $2 and $5 denominations of United States Notes were officially discontinued, though they both remain legal tender.Was there a 4 dollar bill? ›
In 1904, $4 bills ceased being issued, but they continued to circulate for several years after that; however, by 1947, according to a Globe and Mail article, they would rarely show up in circulation anymore. Today, the bills are a collector's item.Is there a $1000 bill in U.S. currency? ›
American paper currency come in seven denominations: $1, $2, $5, $10, $20, $50, and $100. The United States no longer issues bills in larger denominations, such as $500, $1,000, $5,000, and $10,000 bills. But they are still legal tender and may still be in circulation.Who is the black man on the $2 bill? ›
(UPDATED POST, JANUARY 14, 2016) I would like to clear up an urban myth that has been floating around via online for years now and misinformation regarding whether or not a Black man was on the U.S…
The watermark is a great way to determine the authenticity of banknotes, as it's very hard to forge, even for the most sophisticated criminals. A watermark, typically the image of the person portrayed on the bill, can be found on all $10, $20, $50, and $100 bills printed since 1996 and on $5 bills printed since 1999.Where is the spider on the $1 bill? ›
In the upper-right corner of the bill, above the left of the number "1" there appears to be a tiny creature peeking out. Some say it's an owl, others see a spider because of the web design behind the "1." Some say it's part of a skull and crossbones when turned sideways.What part of a dollar bill can be missing? ›
As long as three-quarters of a bill are intact, you can exchange it for a whole bill.What does the K mean on a dollar bill? ›
Louis, I = Minneapolis, J = Kansas City, K = Dallas, and L = San Francisco. The four numbers that are repeating signify the number of the letter of the alphabet that it corresponds to, for example- A-1, D-4, and so on.What bill has a hidden spider? ›
Grab a magnifying glass, and check out the top right corner of your dollar bill. Just to the left of the top of the “1,” there is what some believe appears to be either a tiny spider or owl in the “webbing” pattern.Is it an owl or a spider on the dollar bill? ›
The only difference is that "the owl" is hidden behind the the leaves and the frame around "1". Moreover, when you look towards the outer ends of the the bill, parts of two other "spiders" appear(the other parts of them are again hidden by the frames of the lower "1"'s).What is the most valuable $1 bill? ›
A little extra cash always comes in handy and some lucky people could be sitting on a small fortune without even realizing it. Coin and currency collectors in North America are willing to pay up to $150,000 for a rare $1 bill which features a printing error.What is the rarest type of dollar? ›
1. The 1794 Flowing Hair Silver Dollar. The 1794 Flowing Hair Silver Dollar may sit atop the rankings of the most expensive coin ever sold, at least for now. Some experts believe that it was the first silver dollar struck by the U.S.Is there a 1000000.00 bill? ›
The United States has never issued a million dollar bill. However, many businesses print million dollar bills for sale as novelties. Such bills do not assert that they are legal tender.Is there an owl hidden on the $1 bill? ›
It's a spider, not an owl. And it's not a mistake. The scaffolding design or web design is made by that spider they say.
Under regulations issued by the Department of the Treasury, mutilated United States currency may be exchanged at face value if: More than 50% of a note identifiable as United States currency is present.Is it illegal to tape a ripped dollar bill? ›
With that, you could conclude that yes it is, in fact, illegal to "mutilate, cut, deface, disfigure, or perforate, or unite or cement together" any bank bill, draft, note or evidence of debt by a national or federal entity.Is it illegal to tape a dollar bill? ›
Is it illegal to tape a ripped dollar bill? You can use your cash as is if a corner is missing. If it's ripped into two pieces, tape them back together and take the bill to a bank, where they will make sure the serial numbers on both sides of the note match and give you a new one.