Making Money Costs More, Literally

The slogan says, “The touch, the feel of Cotton….the fabric of our lives” and I can’t help but agree. From my sheets and socks to my jeans and tees I’m a cotton girl. And while it’s a textile of choice when it comes to undergarments the fact that U.S. dollars are made from the soft fluffy tufts is what really gets me going. $10s, $20s, $50s, and if I’m lucky $100s in my wallet, that is where I like the feel of cotton the most. Most paper is made from wood pulp but in order for money to withstand the wear and tear people put it through U.S. currency is fabricated with 75% cotton and 25% linen which is a flax derivative. So now as financial experts are watching raw cotton’s worth rise in the worldwide market, it’s not just my clothes and bed sheets that are feeling the effects of inflation. Cash actually costs more to make that it did before. The manufacturing cost correlates to the increasing expense of material. Cotton is at a 140 year high and expected to continue climbing. According to the U.S. Government Accountability Office (GAO), paper costs "are a significant portion of the cost of producing $1 notes, but less than half the total cost." The price to produce just one note jumped 50% from 2008 when it was only 6.4 cents apiece to 9.6 each in 2010. Last year alone the government produced 6.4 billion new currency notes. It boils down to an additional balance of $20,480,000,000 for the same product made with the same procedure in the same place. In an effort to reduce replacement costs the GAO recommended swapping paper singles for $1 coins. Metal money stands up to use better than the fiber alternative allowing it to be used for a longer period of time before it need to be changed out. The GAO thinks it’s a plausible idea suggesting that the cotton to coin switch could save the government about $5.5 billion in the next 30 years. If it means more change in my pocket, I could get use to the clinking clanking sound of metal money but it will take more than a price hike to convince me to trade in my cotton for a brass brassiere. Are you looking for a job in Finance? Be sure to visit FinancialJobBank.com By Heather Fairchild - Heather is a multimedia developer with experience in web, film, photography and animation as well as traditional fine arts like painting and sculpting. In addition to writing for FinancialJobBankBlog.com, she is co-founder of design and promotion company, Creative Kazoo with fellow Nexxt blogger, Staci Dennis. Heather’s spare time consists of making puppets, teaching Sunday School, building Legos and doing science experiments with her children.