Money & Banking

Functions of money Medium of exchange- use money in exchange for goods and services Unit of accounting- yardstick that allows us to compare values of goods and services Store of value-store it for use later

Characteristics of Money Durable- withstand wear and tear Portable- easy to carry Divisible-easy to divide into parts Stable in value-value doesn’t change rapidly Scarce-whatever is used as money must be scarce Accepted-everyone will take it

History of American Banking Congress passed the Coinage Act- established the dollar as the basic unit of currency Federal Reserve System created- regulated reserves and money supply and made loans to member banks- Nations first true central bank. FDIC (Federal Deposit Insurance Corporation) was created in 1933 after the stock market crash. It insures our money in banks up to $250,000. This was raised in 2008.

Banking services Savings Accounts Checking accounts with Debit Cards Overdraft checking- write a check for more money than you have in your account- interest rate is high Direct Deposit Electronic funds transfer (EFT)- transfer funds from one bank to another without money changing hands Electronic Funds Transfer Act of responsible for only $50 if money is stolen from ATM- must report card stolen in 2 days. Transaction errors must be reported within 60 days. Users are also protected against computer mistakes

Currency Bureau of Mint- make all U.S. coin 5% of currency in the U.S. is coins Bureau of Engraving and Printing prints all bills Issued in $1, $2, $5, $10, $20, $50, $100 Higher amounts aren’t printed anymore so criminals can’t hide large amounts of cash

This specific $500 dollar bill was printed in 1928 and features a portrait of the twenty- fifth President William McKinley. Today, there are very few of these $500 bills left

This specific $1,000 dollar bill was printed in 1928 and has the portrait of the twenty-fourth president Grover Cleveland printed on. The 1,000 dollar bill and all bills over $100 were printed until 1946 before they were discontinued.

The United States government also printed a $5,000 dollar bill which circulated in the American general public until 1969 when it was recalled. This specific $5,000 dollar bill was printed in 1934 and contains the portrait of the fourth president of the United States James Madison printed on it. There are only about 500 left.$5,000 dollar bill

The $10,000 dollar bill was the largest of all dollar bills that was printed and circulated in the American general public. This specific dollar bill was printed in 1934 and contains the portrait of U.S. Treasury Secretary Chase printed on it. These bills were also recalled in 1969 and very few are still around today$10,000 dollar bill

$100,000 The $100,000 dollar bill is actually not a dollar bill at all, it’s a gold certificate. What’s a gold certificate? Well a gold certificate is money that the government prints that only they can own and use. It is intended for only the use in Fiscal Channels. They were never issued or used for general circulation. This specific gold certificate was printed in 1934 and has the 28th president, Woodrow Wilson’s portrait on it. There were only 42,000 $100,000 dollar certificates printed and the only ones around today are not for sale. for educational purposes only

Methods to make counterfeiting difficult Print multicolored bills Using embedded devices such as strips Microprinting Color changing ink

New $100 dollar bill Look for a blue ribbon on the front of the note. Tilt the note back and forth while focusing on the blue ribbon. You will see the bells change to 100s as they move. When you tilt the note back and forth, the bells and 100s move side to side. If you tilt it side to side, they move up and down. The ribbon is woven into the paper, not printed on it.

Look for an image of a color-shifting bell, inside a copper-colored inkwell, on the front of the new $100 note. Tilt it to see the bell change from copper to green, an effect which makes the bell seem to appear and disappear within the inkwell.

Hold the note to light and look for a faint image of Benjamin Franklin in the blank space to the right of the portrait. The image is visible from either side of the note.

Money Supply How much do we have? M1- currency(bills and coins), checkable deposits and traveler’s checks M2- everything in M1 plus savings deposits, small time deposits, money market deposits, retail money market mutual fund balances

Identify Theft Identify thieves can steal funds from bank accounts, obtain credit cards, apply for loans, establish utility accounts rent apartments, obtain jobs using your identity Need your address, social security number and name In Tennessee you can “freeze” credit reports if you have been a victim of Identify theft Class D Felony with years in prison for identify theft.

Do’s and Don’ts Do Shred documents Sign credit cards Keep up with accounts Open bills promptly Report questionable charges promptly Check your credit report twice a year Don’t Lend your credit card to anyone Open suspicious s Sign blank receipts Write account numbers on postcards or outside of envelopes Provide private info over the internet unless it is a secure site