Isn't a dollar worth a dollar?

No.

Well, not exactly.

Dollars make good wallpaper.

If you visit Charleston, South Carolina, don't miss the Griffon English Style Pub. You'll find the interior papered with dollar bills. 

There are dollar bills on the walls. There are dollar bills on the ceiling. There are dollar bills taped to the columns. No matter where you are in the establishment, you'll find easy money at your fingertips.

And yet, no one takes it.

Why would you do that? What are you going to do with a dollar?

Little.

In order to buy a drink you would have to take about 10 bills from the wall.

Why not use US currency as your wallpaper - it even has a nice shade of green!

Now, if the Griffon were papered with $100 bills, the owners might have a security problem. And imagine if the bar were covered in gold coins.

But dollar bills?

No problem.

It's simply not worth bothering to steal.

This was not always the case. A dollar in 1970 was worth about $8.44, according to the Bureau of Labor Statistics' CPI-based inflation calculator. Back then, one could have picked a bill off the wall and bought a drink.

Note that the CPI does not reflect full inflation. The government revised the CPI formula in the 1990s so that it underestimated the real increase in prices. Based on the formula used in the 1970s, the CPI is close to double the official figures. 

The sad reality is that our money has devalued so much that a dollar bill is not much different from a penny. It's not worth bending over to pick it up.

Speaking of pennies, have you heard about the penny problem? President Trump recently ordered the U.S. Mint to stop producing them. It's too expensive. It costs about 3.69 cents to mint and distribute a penny.

And, by the way, we also have a nickel problem. According to the latest annual report from the U.S. Mint, it costs 13.8 cents to produce and distribute a nickel coin.

The gradual disappearance of the penny and people's willingness to use dollar bills as wallpaper underscore the devaluation of money and the erosion of purchasing power. It is a slow but inexorable process.

And it doesn't look good.

As Venezuela went through one of its bouts of hyperinflation in 2015, a photo of a man using a 2 bolivar bill as a napkin went viral. The image encapsulated the economic crisis suffered by the Venezuelan people.

Business Insider reported that, at the official exchange rate, the makeshift napkin was worth about 32 cents. But, in reality, the man didn't waste nearly that much.

On the black market, the reality is completely different. You can get 676.88 bolivars to the dollar, according to dolartoday.com. That means that buying food with a 2 bolivar bill costs less than a third of a cent on the U.S. dollar.dolartoday.com. That means that storing food with a 2 bolivar bill costs the holder less than a third of a U.S. cent.

Here is something that should give Americans pause for thought.

Is using currency as a napkin different from using it as wallpaper?

Is the United States Venezuela?

Its monetary policy is certainly not much different: printing money so that the government can borrow and spend.

The difference is that the United States enjoys the advantage of issuing the world's reserve currency. This means that the world needs a lot of dollars. It does not need bolivars. This demand for dollars sustains U.S. government borrowing, spending and money creation. If the dollar were not the reserve currency, we would probably be facing hyperinflation like the Venezuelans suffered. (Or perhaps we would have a smaller, less intrusive government).

This raises a question: what happens if the dollar loses its reserve status?

We may find out because it is happening, slowly but surely. With de-dollarization, the dollar is losing ground as a reserve currency against gold and other currencies. 

At the rate we're going, it won't be long before people are papering bars with $100 bills and using dollars and napkins.

Mike Maharrey, Money Metals