[Michael Lambert] So how does cash get into
circulation? Well, we all know what we do when we go to an ATM or we go to a bank branch
to get our cash, but how does it actually get there? We at the Federal Reserve Board
are the issuing authority for U.S. currency, and what that means is that we ask the Bureau
of Engraving and Printing each year to print the notes that we order, and as they print
them and they go through their quality inspection system and they make it into the Federal Reserve’s
vault at the Bureau of Engraving and Printing, then we are prepared to issue these notes
to the public ultimately through the Federal Reserve banks. So literally they go from the
BEP’s vault into the Federal Reserve’s vault. From the Federal Reserve Board’s vault, we
move the currency to our 12 Federal Reserve banks across the country, and as banks order
cash, our Reserve banks are able to meet that demand, and that’s the point at which that
currency makes its way into circulation. The currency that’s printed at the Bureau of Engraving
and Printing, that’s literally just pieces of paper until the Federal Reserve Board issues
it to a Federal Reserve bank, then it becomes lawful money.