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The Mystery of the Missing Money

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The Federal Reserve tells us that more than $1.4 trillion worth of U.S. currency is in circulation. But we only know where roughly 15 percent of that money is—in banks or in regular, everyday circulation in the United States. The other 85 percent of the United States currency supply is simply missing. No one knows for sure where it is or what it's doing. "We call this the currency enigma," said Edgar Feige, an economics professor emeritus, in an interview with American Public Media’s Marketplace. "It’s hard to figure out where this currency is and why so much of it is out there."

There are some good guesses, but no certainties. And those possibilities tell us something about how our economy—and the world's—really works.

The shadow economy

A chunk of the money is probably used in illegal transactions. This shadow economy is enabled by cash, which is generally the most anonymous method of payment. Economists like Feige put the size of the shadow economy—which includes drugs, prostitution and various other misdeeds—at hundreds of billions of dollars. At certain points, that has accounted for more than 20 percent of the country’s adjusted gross income.

But this doesn’t mean that all of the missing money goes into the shadow economy—after all, currency can be used again and again as it passes from person to person. That leads some economists to theorize that a relatively small percentage of the missing currency (less than 10 percent) is part of the black market.

The overseas equation

So where’s the rest of it? Much—if not most—of the money is probably overseas. U.S. bills are still seen around the world as some of the most stable and reliable currency available. So vast quantities of cash are hidden away for a rainy day (some $80 billion in Russia alone).

That’s not necessarily a bad thing. Think of it this way: If someone holds onto U.S. currency, they’re essentially giving the Federal Reserve free money. This concept is called seigniorage, and it’s a bit complicated to explain. Here’s the basic idea: The Fed creates money by buying government bonds from banks. As people demand more dollars—and hold onto them—the Fed buys more bonds to increase the supply. But those bonds earn interest, which means our central bank pockets billions of dollars in pure profit each year.

The Fed scrambles

All of this means that the Federal Reserve has a balancing act on its hands. It has to bring new money into circulation (since that earns it sweet, sweet moolah), but the bank also wants to to keep U.S. currency from being mainly used by gamblers and drug smugglers. In the 1960s, we stopped printing $500 and $1000 bills, as they were almost exclusively used illegally. These days, there's been criticism of the $100 bill for just the same reason. Believe it or not, there are more $100 bills in circulation than $20 bills!

The Fed also wants to make sure that the bills are as secure as possible—the demand makes the $100 an attractive target for counterfeiters. That’s why the $100 was redesigned in 2013.

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What Would It Cost to Operate a Real Jurassic Park?
Universal Studios and Amblin Entertainment, Inc. and Legendary Pictures Productions, LLC.
Universal Studios and Amblin Entertainment, Inc. and Legendary Pictures Productions, LLC.

As the Jurassic Park franchise has demonstrated, trapping prehistoric monsters on an island with bite-sized tourists may not be the smartest idea (record-breaking box office numbers aside). On top of the safety concerns, the cost of running a Jurassic Park would raise its own set of pretty pricey issues. Energy supplier E.ON recently collaborated with physicists from Imperial College London to calculate how much energy the fictional attraction would eat up in the real world.

The infographic below borrows elements that appear in both the Jurassic Park and Jurassic World films. One of the most costly features in the park would be the aquarium for holding the massive marine reptiles. To keep the water heated and hospitable year-round, the park would need to pay an energy bill of close to $3 million a year.

Maintaining a pterosaur aviary would be an even more expensive endeavor. To come up with this cost, the researchers looked at the yearly amount of energy consumed by the Eden Project, a massive biome complex in the UK. Using that data, they concluded that a structure built to hold winged creatures bigger than any bird alive today would add up to $6.6 million a year in energy costs.

Other facilities they envisioned for the island include an egg incubator, embryo fridge, hotel, and emergency bunker. And of course, there would be electric fences running 24/7 to keep the genetic attractions separated from park guests. In total, the physicists estimated that the park would use 455 million kilowatt hours a year, or the equivalent of 30,000 average homes. That annual energy bill comes out to roughly $63 million.

Keep in mind that energy would still only make up one part of Jurassic Park's hypothetical budget—factoring in money for lawsuits would be a whole different story.

Map of dinosaur park.
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Expedia Just Made Its Vacation Bundle Deal a Lot More Convenient
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Saving money by booking your hotel and flight together sounds like a no-brainer—until it actually comes time to do it. Picking the right accommodations for a trip requires a lot of research, and if you're in a rush to do it at the same time that you're comparing airfares, you may end up stuck with a choice you regret. Now, Expedia is taking the stress out of its vacation bundle offer by letting customers book flights and accommodations separately. As Travel + Leisure reports, customers can take advantage of the deal as long as they choose a hotel sometime between booking a flight (or rental car) and their first day of vacation.

Previously, Expedia customers looking to save hundreds by bundling had to purchase their plane tickets and reserve hotel rooms at the same time. Not only does that require a lot of planning in a short timeframe, but it also requires you to pay a significant chunk of your vacation budget up front. And while international flights are cheapest when booked months in advance, the same can't always be said for hotels, which sometimes show their best prices at the last minute.

Expedia's update relieves a lot of the pressure from the decision-making process. When users book their flight, they will now see an option labeled “Expedia Add-On Advantage.” If they also plan to find their hotel through Expedia, they can select the offer and reap the savings, even if they don't book it immediately. According to the company, customers can save up to 43 percent on hotel prices as long as they book a room before their flight leaves.

Gearing up for your next vacation? If you want to travel on a budget this summer—or any time of year—we suggest following these tips.

[h/t Travel + Leisure]

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