United States dollar

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The United States dollar, or the American dollar, is the official currency, or money, of the United States of America. When writing, the symbol for the American dollar is the dollar sign ($). Dollars can also be known as USD (U.S. Dollar).

Front of a US dollar bill

The American one dollar bill has a picture of George Washington. There are paper bills that are worth 1, 2, 5, 10, 20, 50, and 100 dollars.

One of the unique things about the U.S dollar system is that all of the notes are the same size. This is the only country in the world to have this type of system. In others the size of the note goes up as the value does.

There are also dollar coins. Some of them are silver and some of them are gold-colored. Vending machines often give dollar coins as change, since it is easier for the machines to give out coins than paper money. Some of the more advanced vending machines give out paper money as change. Paper dollars are much more common than dollar coins.

There are 100 cents in one American dollar. The cent or "penny" is the smallest or least worth coin used in the U.S. There are half-dollar coins, which are worth 50 cents. Quarters are worth 25 cents, dimes are worth ten cents, nickels are worth five cents, and pennies are worth one cent. All coins and paper bills have the faces of famous Americans on the front side.

The paper "dollar bill" is actually called a "Federal Reserve Note". They are issued by the Federal Reserve Bank, a private corporation chartered by Congress in 1913. It is not an agency or department of the government, but the government does control who sits on the bank's board of directors. The United States Constitution (the highest law in the country), declares that only Silver or Gold Coin can be declared legal tender by the States, but gave the power to coin such money to the Congress. The government of the United States has simply ignored this part of the Constitution and has instead used their power to "borrow money" as the mechanism to circulate Federal Reserve Notes (which the bank gives to the Treasury as evidence of the money they borrowed - no actual money ever exchanges hands).

The Federal Reserve is the federal government's bank. It lets other banks borrow money. The banks then let people and companies take the money from them. The banks then pay money at a rate called the Federal Funds Rate. This number is set by the Federal Reserve Board and is changed however money is in the country. The paid rate is called the "overnight lending rate" because money is borrowed for a small time.

By giving to banks(or creating liquidity), the Fed can bring more money into the world and focus interest on newly created money.

Many dollars never enter into the cycle which makes money. They are held in digital accounts and never live in paper form. After printing by the Bureau of Engraving and Printing, the real paper dollars are sold for no more than the cost of the ink and paper.

Bill gallery[change | change source]