The resurgence of the $2 bill

In 2005, depository institutions ordered $122 million in $2 notes,
according to Federal Reserve statistics.  That is more than double the
average amount ordered from 1991 to 2000.

…with banking and currency experts not certain what is fueling the
surge. A few possibilities are inflation, the introduction of the
Sacagawea $1 coin in 2000, and even, according to some, immigration.

Regardless
of the reason, anecdotal evidence shows that at the local level,
vendors and customers are getting more comfortable with $2 bills.

One
group that has embraced the note is the exotic-dancing industry.  Strip
clubs hand out $2 bills when they give customers their change, and the
bills end up in dancers’ garters and bartenders’ tip jars.

"The
entertainers love it because it doubles their tip money," said Angelina
Spencer, a former stripper and the current executive director of the
Association of Club Executives, an adult nightclub trade group.

In
addition to the inflation factor, Robert Hoge of the American
Numismatics Society thinks $2 bill demand may be getting help from
immigration flows, particularly from Canada and Europe, where currency
denominated in twos is common.

Peter Morici, professor at the Robert H. Smith School of Business at
the University of Maryland, thinks that with the introduction of the
Sacagawea, named for a famous Native American woman, people are
beginning to realize an inconvenience of $1 bills.  "In order to have a
successful $2 bill, you have to have a successful $1 coin," he said.

Here is the full story.  It is odd, is it not, that people would change their denominational holdings as the most efficient way around wage and price stickiness?

Comments

I think the strip clubs are probably the big driver. Hard to make $1.50 stay in the waist band.

Inflation has been rapid enough that it is not too long ago that $1 is equivalent to today's $2.

That makes $1 bills worth about 50 cents, which probably ought to be handled with a coin anyway.

Maybe I shouldn't mention the sticky wages pun? Nah, better not. Oops, too late.

i havent see a 1 dollar coin in god knows how long, id say it was like 3 years ago, i actually still own a 2 dollar bill from a long time ago because its rare to see one.

Two dollar bills are a sub-culture signal at strip clubs.

A woman tipping a female dancer with two dollar bills is saying "Hey, I REALLY like you."

It's like those damn 5-pointed star tattoos.

Two dollar bills are a sub-culture signal at strip clubs.
A woman tipping a female dancer with two dollar bills is saying "Hey, I REALLY like you."

Not that he's going to get anything in return for his generosity.

I have to agree with the article with the exotic dancers wonting the 2$ bill it makes since for them so they make more money. I think though also the reason the 1$ coin failed is it was not marketed to the public vending machines didn’t readily take the coin and other places that you usually use a dollar bill. Also like the 50cent piece I think was heavy and cumbersome but if they can some how get the 2$ bill so you can use it in more than just strip clubs I think it will make a good comeback considering inflation and the fact that a dollar isn’t worth as much now.

The dollar coin still weighs more than the dollar bill. However, the Sacagawea dollar is a nice coin (unlike its predecessor). A few vending machines now give Sacagawea’s as change. Very useful. The UK has a 2 Pound coin worth almost four dollars.

As an American male living in Canada, let me state that I loath $1 and $2 coins. The added weight in my wallet (unevenly distributed to one pocket) and the constant digging through all the change is annoying.

Jacqueline,

I believe Canadian strip clubs don't have tipping at the stage. I believe they work on the "Girl Drinks" system. The dancer comes over and talks to you after her set, then you buy her a drink. Except any drinks for the girls are $20 or $30 dollars.

Peter,

It's not a he and she exchange, it's a she and she exchange.

Overall, I think it would be a smart move to go to $2 bills and $1 coins. The Treasury could produce half as many to return the same amount of money into circulation, a savings on materials and tax money. Some critics would state that a $1 coin is too bulky (based on the size and weight of the Sacagawea coin), but it wouldn’t have to be. All we as consumers would need is something that tells us the coin is worth $1. Make it a different shape maybe (octagonal seems to work in other countries) or make it only slightly larger than a quarter. Make it from the same copper and nickel used to make the quarters, nickels, and dimes and make it lighter that the Sacagawea dollar. The article states that for the $2 bill to successful in circulation, there would have to be a successful $1 coin. That’s easy to accomplish. Quit making the $1 bill and go strictly coins. Force the circulation of the coin. Recycle the current $1 bills through the US Treasury to take them out of circulation and you have created a successful $1 coin.

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