WEBVTT - How a Fed Bank Distributes Its Billions of Dollars in Cash 0:00:00.120 --> 0:00:03.280 Hey, there are aud Loots listeners. It's Tracy Alloway and Joe. 0:00:03.279 --> 0:00:03.840 Why isn't thal. 0:00:04.200 --> 0:00:07.600 We are very excited to announce that Oddlots is going 0:00:07.680 --> 0:00:09.479 to Washington That's right. 0:00:09.600 --> 0:00:11.360 For the first time, we are going to do a 0:00:11.440 --> 0:00:16.239 live public Odd Lots recording in our nation's capital. That's 0:00:16.280 --> 0:00:19.520 going to be March twelfth in Washington, DC at the 0:00:19.600 --> 0:00:23.400 Miracle Theater and guests will be announced in the coming days. 0:00:23.400 --> 0:00:25.759 But in the meantime you can find a ticket link 0:00:25.800 --> 0:00:27.800 at Bloomberg dot com slash odd. 0:00:27.600 --> 0:00:41.520 Lots, Bloomberg Audio Studios, podcasts, radio news. 0:00:40.040 --> 0:00:41.640 Go flow it until the other door. 0:00:41.520 --> 0:00:49.159 Shows and there's gonna be one more we got to 0:00:49.200 --> 0:00:50.440 go through, so come on and. 0:00:50.640 --> 0:00:54.720 Oh wow, you can definitely get trapped in here. 0:00:54.960 --> 0:00:59.440 This is the trap and everyone must come in and 0:00:59.480 --> 0:01:02.560 the door now we can go to the next. 0:01:02.400 --> 0:01:10.399 Door, deep underground, coming through elevator. The sort of monochrome quietness, 0:01:10.440 --> 0:01:13.000 the uniforms. This kind of reminds me of severance a 0:01:13.000 --> 0:01:15.680 little bit. Has anyone made that observation before? 0:01:25.240 --> 0:01:28.360 Hello, and welcome to another episode of the All Thoughts Podcast. 0:01:28.440 --> 0:01:29.440 I'm Tracy Alloway. 0:01:29.720 --> 0:01:32.560 Is this the one where we get severed? Tracy my 0:01:32.720 --> 0:01:36.440 name is Jill Wisenthal, and I freely consent to being severed. Joe. 0:01:36.480 --> 0:01:39.640 We are not getting the severance procedure, but we are 0:01:39.800 --> 0:01:42.240 about to go to a place that not many people 0:01:42.280 --> 0:01:45.160 get to see. We are going deep into the vaults 0:01:45.200 --> 0:01:48.560 of the Federal Reserve Bank of Chicago to tour its 0:01:48.680 --> 0:01:52.320 cash operations and get an inside look at how money 0:01:52.440 --> 0:01:53.680 is actually distributed. 0:01:53.920 --> 0:01:58.120 Oh right, yes, okay, welcome to cash. In this episode, 0:01:58.120 --> 0:02:00.000 we take a walk through the basement of the Chicago 0:02:00.240 --> 0:02:02.640 FED and we learn all about how the central bank 0:02:02.720 --> 0:02:07.520 processes and delivers cash. Cash operations will not quote highly 0:02:07.600 --> 0:02:10.520 classified like in the inner workings of the office and 0:02:10.560 --> 0:02:13.280 the show Severance. They're well beyond the public eye for 0:02:13.360 --> 0:02:16.480 obvious reasons. So this is a rare look or listen, 0:02:16.720 --> 0:02:18.440 I guess at the inside. 0:02:18.680 --> 0:02:21.160 Yeah, and you're not actually allowed to take any pictures 0:02:21.240 --> 0:02:25.720 or videos inside the vaults, So an audio format actually 0:02:25.800 --> 0:02:28.840 does pretty well here. And this is all really interesting 0:02:28.880 --> 0:02:31.919 because we're used to thinking about the FED in terms 0:02:31.919 --> 0:02:35.480 of monetary policy, raising or cutting interest rates to try 0:02:35.480 --> 0:02:38.919 to keep inflation in check and unemployment low, and there's 0:02:38.919 --> 0:02:41.639 stuff like bank regulation. Of course, we talk a lot 0:02:41.639 --> 0:02:44.200 about that on the show. All of that can feel 0:02:44.440 --> 0:02:48.640 very theoretical, but there's this very physical side to the 0:02:48.680 --> 0:02:49.360 FED as well. 0:02:49.639 --> 0:02:52.160 That's totally right. The cash in your wallet has got 0:02:52.200 --> 0:02:54.079 to come from somewhere, right, and a lot of it 0:02:54.120 --> 0:02:56.600 comes from the FED, or at least it moves through 0:02:56.639 --> 0:02:59.360 one of the twelve Federal Reserve Banks, the Bureau of 0:02:59.360 --> 0:03:02.600 Engraving and actually makes the money, and then it gets 0:03:02.680 --> 0:03:05.960 delivered and processed through the FED banks and the Chicago 0:03:06.000 --> 0:03:07.079 FED building itself. 0:03:07.160 --> 0:03:09.760 I mean it kind of looks exactly like how you 0:03:09.840 --> 0:03:13.240 might picture an old fashioned bank. It has these giant, 0:03:13.440 --> 0:03:18.880 beautiful neo classical columns on the outside and inside inside 0:03:19.000 --> 0:03:21.880 is where the magic happens. 0:03:26.160 --> 0:03:29.160 We set up a system in the United States with 0:03:29.639 --> 0:03:33.359 twelve reserve banks around the country because in nineteen thirteen, 0:03:34.440 --> 0:03:39.840 as today, people were deeply uncomfortable with the financial system 0:03:39.920 --> 0:03:43.840 being run exclusively by New York City and Washington, DC. 0:03:45.320 --> 0:03:50.600 So they wanted input from all around the country. And 0:03:50.760 --> 0:03:54.840 one component of the job is monetary policy, like we 0:03:55.000 --> 0:03:56.040 talk about all the time. 0:03:56.360 --> 0:03:59.960 That's Austin Gouldsby, President of the Chicago Federal Reserve Bank, 0:04:00.360 --> 0:04:03.000 and you've probably heard him on the podcast. A couple 0:04:03.080 --> 0:04:07.320 of times before, very recognizable voice, and he's usually you know, 0:04:07.440 --> 0:04:11.120 talking about the macro environment, monetary policy, things like that. 0:04:11.480 --> 0:04:13.840 But now you're going to hear him talk about something 0:04:13.960 --> 0:04:18.360 very different, being the bank behind the banks, the one 0:04:18.440 --> 0:04:21.720 that actually provides them with cold, hard cash. 0:04:22.040 --> 0:04:27.120 We're also a real, live, working bank, and we got 0:04:27.200 --> 0:04:31.400 seventeen eighteen hundred employees. We are a bank two banks, 0:04:32.120 --> 0:04:35.520 and they have a master account. We pay interest on 0:04:35.600 --> 0:04:41.080 their deposits into that account, which our bank reserves, and 0:04:41.839 --> 0:04:46.400 we provide FED wire. We do ach direct deposit, we 0:04:46.440 --> 0:04:48.600 do FED now and one of the things we do 0:04:48.920 --> 0:04:52.600 is cash. It's one of the FED financial services. And 0:04:52.720 --> 0:04:56.960 so if one of our member banks wants cash for 0:04:57.000 --> 0:05:00.920 their ATMs, they'll send in and say, just like you 0:05:01.320 --> 0:05:03.320 in your account, you go down the ATM, you take 0:05:03.360 --> 0:05:05.800 some cash out. They say, we want cash to put 0:05:05.839 --> 0:05:08.520 in our ATM, so take that out of our master account. 0:05:08.560 --> 0:05:13.680 They send a brainstruck over here and they place an order. 0:05:14.000 --> 0:05:16.240 We count it out, we give it to them. If 0:05:16.240 --> 0:05:19.840 they have too much currency, they send it to us 0:05:20.360 --> 0:05:24.280 in the same brainstruck. We take it in, we run 0:05:24.320 --> 0:05:27.279 it through machines, we count it, we pull out anything 0:05:27.320 --> 0:05:31.200 that's been signed, or somebody spit on it, or you 0:05:31.240 --> 0:05:36.039 know it's dirty and shred it. We process it, put 0:05:36.080 --> 0:05:38.920 it in our vaults, send it out the next day, 0:05:39.320 --> 0:05:42.400 and we get a bunch of shipments of brand new 0:05:42.440 --> 0:05:45.680 money from the Bureau engraving and printing. So it's a 0:05:45.800 --> 0:05:49.120 very live operation and you're going to see it. There 0:05:49.160 --> 0:05:51.240 are a lot of people work there, there's a lot 0:05:51.279 --> 0:05:55.120 of machinery, and it's pretty neat. 0:05:56.240 --> 0:05:59.560 Pretty neat is putting it mildly, because it turns out 0:05:59.600 --> 0:06:02.600 that Austin and Lusts giving the tours of the cash shop, 0:06:02.720 --> 0:06:05.919 something that was totally evident while we did it. I 0:06:05.960 --> 0:06:09.000 think most people on finance and economics love money, but 0:06:09.120 --> 0:06:10.880 Austin really loves money. 0:06:11.080 --> 0:06:14.800 Yeah, So join me and Joe and Austin on this 0:06:14.960 --> 0:06:18.000 special edition of odd Blots as we follow how money 0:06:18.120 --> 0:06:28.240 actually moves through the Federal Reserve system. We are standing 0:06:28.240 --> 0:06:30.800 in the lobby of the Chicago Fed building. There's a 0:06:30.839 --> 0:06:33.840 beautiful staircase and a balcony that looks down on this 0:06:33.960 --> 0:06:37.839 gorgeous atrium. Apparently there used to be machine guns mounted 0:06:38.000 --> 0:06:41.520 up there, and now there's security guards at the entrance, 0:06:41.600 --> 0:06:43.360 the Fed's own police force. 0:06:43.800 --> 0:06:47.880 And as Austin mentioned earlier, the Chicago FED was established 0:06:47.880 --> 0:06:51.440 in nineteen fourteen, and back then investors didn't have much 0:06:51.480 --> 0:06:55.080 reassurance that their bank deposits were, you know, actually safe. 0:06:55.480 --> 0:06:58.039 And after months of back and forth, Congress passed the 0:06:58.040 --> 0:07:01.320 Federal Reserve Act, establishing the FED Reserve System and the 0:07:01.360 --> 0:07:03.400 twelve reserve banks that cover the entire. 0:07:03.200 --> 0:07:08.760 Country, and the Chicago FED covers parts of Illinois, Indiana, Wisconsin, Michigan, 0:07:08.800 --> 0:07:11.400 and the state of Iowa. And as we've said before, 0:07:11.640 --> 0:07:13.960 we are used to talking about whether the FED is 0:07:13.960 --> 0:07:17.040 doing a good job on things like inflation and unemployment, 0:07:17.360 --> 0:07:20.120 but we don't actually talk that much about its other 0:07:20.200 --> 0:07:22.360 big job, which is managing the money. 0:07:24.320 --> 0:07:26.720 We know when we're doing a good job when you 0:07:26.760 --> 0:07:28.600 can go to an ATM and there's money in it. 0:07:28.760 --> 0:07:30.720 You can go to a grocery store and you can 0:07:30.760 --> 0:07:32.920 pay in cash and they have changed to give you 0:07:33.360 --> 0:07:34.040 in currency. 0:07:34.520 --> 0:07:37.800 Mike Kepler is an executive vice president of the district's 0:07:37.800 --> 0:07:41.239 Cash Operation and the Chicago FED Central Bank Service Area. 0:07:41.880 --> 0:07:46.440 So essentially I oversee the full currency operation between our 0:07:46.480 --> 0:07:50.960 Chicago and Detroit offices that includes everything from processing the 0:07:51.000 --> 0:07:54.200 currency on the high speed machines to paying our orders 0:07:54.200 --> 0:07:57.240 to financial institutions in our district and taking money in. 0:07:57.960 --> 0:08:00.320 Even though we live in a world that's full of 0:08:00.400 --> 0:08:04.920 digital payment systems, cash still plays a role in everyday transactions. 0:08:05.280 --> 0:08:07.360 Cash is Lindy, that's right, Jo. 0:08:07.920 --> 0:08:11.120 It's extremely important. So you know, think about things like 0:08:11.240 --> 0:08:15.800 hurricanes or weather related events or power outages where electronic 0:08:15.840 --> 0:08:17.800 payments don't work. In fact, I was in the store 0:08:17.840 --> 0:08:20.360 the other day and their credit card system was down, 0:08:20.840 --> 0:08:23.040 and fortunately I had cash in my pocket, so I 0:08:23.080 --> 0:08:25.600 was able to jump the line and get my stuff 0:08:25.600 --> 0:08:27.200 and get out the door while theres were kind of 0:08:27.200 --> 0:08:29.280 waiting for the credit card machine to pop back up. 0:08:29.640 --> 0:08:33.120 So it is very important, and not all consumers use 0:08:33.200 --> 0:08:35.880 just one payment type. So in fact, you can imagine 0:08:35.920 --> 0:08:39.400 in today's times, electronic payments, debit cards credit cards are 0:08:39.520 --> 0:08:43.439 the primary two vehicles that folks use for transactions, but 0:08:43.559 --> 0:08:46.160 cash is a third, very close third for payments. 0:08:46.440 --> 0:08:50.160 And look, the thing is as the share of payments 0:08:50.200 --> 0:08:55.480 that are made electronically mobile banking using cards rises, people 0:08:55.559 --> 0:08:58.440 have this tendency to say, oh, well there is no cash. 0:08:59.200 --> 0:09:03.880 I don't even see cash. If you go look, you 0:09:03.960 --> 0:09:06.800 and you can look off fred. It's on there. Currency 0:09:06.840 --> 0:09:12.560 and circulation as a share of GDP is over ten percent, 0:09:13.080 --> 0:09:17.720 and that's among the highest percent on record, or at 0:09:17.800 --> 0:09:21.160 least since the nineteen eighties that you can find on FRED. 0:09:21.960 --> 0:09:25.680 That's double what it was in two thousand and eight. 0:09:26.760 --> 0:09:30.320 That's like four times higher as a percent than it 0:09:30.520 --> 0:09:37.520 was forty years ago. And it's shockingly large per person. 0:09:37.920 --> 0:09:42.559 It's like forty eight hundred dollars per person on average 0:09:43.040 --> 0:09:43.600 in money. 0:09:44.800 --> 0:09:46.680 Joe, I don't know about you, but I always keep 0:09:46.760 --> 0:09:49.560 four eight hundred dollars in cash just in case I 0:09:49.600 --> 0:09:52.640 have to spontaneously buy, like I don't know, a MacBook 0:09:52.640 --> 0:09:53.800 Pro or something. 0:09:53.720 --> 0:09:57.360 Emergency lumber purchases, maybe a thousand chickens for you. 0:09:57.720 --> 0:09:58.120 That's sure. 0:10:01.960 --> 0:10:07.240 Hi, Hi, teat to. 0:10:09.000 --> 0:10:10.880 The amazing Ami Colorado. 0:10:11.120 --> 0:10:12.320 Welcome to cash. 0:10:13.160 --> 0:10:16.000 Getting into the basement where the Chicago Fed's cash ops 0:10:16.040 --> 0:10:18.480 actually are is a process. 0:10:19.440 --> 0:10:21.920 There's a lot of cameras, there's a lot of security, 0:10:21.960 --> 0:10:24.400 and there's a lot of rules. So don't don't go 0:10:24.559 --> 0:10:27.319 fishing in your pockets, don't pull out your wallet while. 0:10:27.120 --> 0:10:29.960 We're right So there's no putting your hands in your pockets, 0:10:30.000 --> 0:10:33.079 and you're not allowed to carry anything with you after 0:10:33.200 --> 0:10:35.320 going down in the elevator. I'm not even sure what 0:10:35.480 --> 0:10:38.040 floor we're actually on, and we have to pass through 0:10:38.120 --> 0:10:40.480 multiple security doors before we get here. 0:10:40.760 --> 0:10:43.199 But when we do get there, it's pretty cool. We're 0:10:43.360 --> 0:10:47.360 in the transfer area where money comes in and processing begins. 0:10:47.840 --> 0:10:51.119 And let me tell you, there's money everywhere. 0:10:51.520 --> 0:10:55.480 So we're standing next to a big box filled with cash. 0:10:55.520 --> 0:10:57.480 How much would be in something like that? 0:11:00.000 --> 0:11:02.040 Twenty is roughly eight and a half million. 0:11:02.360 --> 0:11:04.840 Wow, Joe, grab it quickly. 0:11:04.960 --> 0:11:06.760 Now you'll see a lot of money. 0:11:06.440 --> 0:11:07.800 As we walk around today. 0:11:08.040 --> 0:11:12.440 That's Amy Elvarado, the bank's vice president of district Cash Operations. 0:11:12.720 --> 0:11:14.480 She oversees the entire process. 0:11:14.720 --> 0:11:17.199 Our team will go in the room and check all 0:11:17.240 --> 0:11:19.920 of the bags as the armored carriers drop them off. 0:11:20.000 --> 0:11:22.199 We'll make sure all the bags are intact and sealed 0:11:22.240 --> 0:11:25.480 and everything. We'll count them. We're doing this bag count 0:11:25.760 --> 0:11:27.920 and then we're signing off on it. That's when we 0:11:27.960 --> 0:11:31.760 would release the carriers, and that's the transfer process coming in. 0:11:36.440 --> 0:11:38.880 There's a long hallway stretching out in front of us. 0:11:39.000 --> 0:11:41.920 The walls are white and there's rooms on either side 0:11:41.960 --> 0:11:45.240 that have large windows and glass doors. In fact, one 0:11:45.280 --> 0:11:47.760 of the most striking things about this place is just 0:11:47.840 --> 0:11:49.040 how much you can see. 0:11:49.520 --> 0:11:52.880 Everything is seen through, even the doors. Amy and Austin 0:11:52.960 --> 0:11:55.839 tell us that transparency is paramount to the security of 0:11:55.880 --> 0:11:59.959 the whole operation, giving that they're dealing with, you know, cash. 0:12:00.200 --> 0:12:03.240 A reason why these doors are clear is because we 0:12:03.280 --> 0:12:05.240 are never in the room with these carriers. At the 0:12:05.240 --> 0:12:08.880 same time. The carriers will come in onto the concourse, 0:12:09.160 --> 0:12:15.800 they will unload their currency bags onto rolling screens, as 0:12:15.800 --> 0:12:17.800 we call them, They will put them in the room, 0:12:17.840 --> 0:12:19.720 they will go back out the other side of the room. 0:12:20.200 --> 0:12:22.800 When our team comes in the room, they're supposed to 0:12:22.840 --> 0:12:24.960 watch us flip all those bags because it's still theirs 0:12:24.960 --> 0:12:28.400 at this point. And once we do that, we'll bring 0:12:28.440 --> 0:12:31.440 the work in. But when we transfer work back out 0:12:31.440 --> 0:12:34.439 to them, same process happens. We go in the room, 0:12:34.640 --> 0:12:37.040 we drop off the currency, we come out. They come in, 0:12:37.280 --> 0:12:38.679 so we all need to be able to see through 0:12:38.720 --> 0:12:41.040 the glass of the transfer process happening. 0:12:41.320 --> 0:12:43.920 All of these security rules apply to employees too. 0:12:44.480 --> 0:12:48.120 People wear smocks, there are no pockets when they go in. 0:12:48.400 --> 0:12:53.040 The colors indicate who's doing what role. And we have 0:12:53.320 --> 0:12:56.199 very very good hygiene in an accounting. 0:12:55.760 --> 0:12:59.440 Sense, and it's a tough job. Cash, as it turns out, 0:12:59.559 --> 0:13:02.079 is pretty we have you when you're piling up millions 0:13:02.080 --> 0:13:06.400 of bills, millions of physical bills. The Chicago FED process 0:13:06.440 --> 0:13:09.680 is something like five point five million pieces a day, 0:13:09.960 --> 0:13:12.959 and the actual currency value of that can be higher 0:13:13.120 --> 0:13:15.120 depending on the denomination of the notes. 0:13:15.640 --> 0:13:18.240 Once the money comes into the FED, the cash is 0:13:18.280 --> 0:13:21.280 brought into a receiving room, which is down another floor 0:13:21.320 --> 0:13:23.920 of the basement. This room looks very similar to the 0:13:23.920 --> 0:13:25.160 transfer room. 0:13:24.960 --> 0:13:27.840 And getting cash into the FED is just the first 0:13:27.880 --> 0:13:28.920 part of this process. 0:13:29.400 --> 0:13:31.720 We would now open the bags and make sure we 0:13:31.800 --> 0:13:34.920 have the correct amount of bundles in each bag. And 0:13:34.960 --> 0:13:37.360 a bundle, as I'll point out, is what you see 0:13:37.360 --> 0:13:39.280 in these containers. They look like little bricks. 0:13:39.360 --> 0:13:41.240 It like a brick of cash, like a brick of. 0:13:41.240 --> 0:13:44.200 Cash, and it is ten straps of one hundred notes, 0:13:44.240 --> 0:13:48.240 so one thousand notes per bundle or brick as it 0:13:48.280 --> 0:13:51.560 looks like. And so we open those deposits up, we 0:13:51.600 --> 0:13:55.520 make sure we have the correct number of bundles, and 0:13:55.559 --> 0:13:58.160 this is where we're entering in the deposit ticket, and 0:13:58.200 --> 0:14:00.800 we're making sure that all of the account is correct 0:14:00.840 --> 0:14:03.480 at the bundle level and then all of the work 0:14:03.600 --> 0:14:07.400 out of these rooms gets stored by denomination into containers 0:14:07.640 --> 0:14:09.760 where they will be stored in vaults until it's time 0:14:09.800 --> 0:14:11.400 for their piece count verification. 0:14:13.440 --> 0:14:16.560 We make our way through more long, stretching hallways until 0:14:16.559 --> 0:14:18.080 we get to a room where there are a couple 0:14:18.080 --> 0:14:21.200 of workers sorting through a bunch of cash, and most strikingly, 0:14:21.640 --> 0:14:23.840 a big machine that takes up most of the room 0:14:23.880 --> 0:14:26.680 with a computer on the left side and stacks of 0:14:26.760 --> 0:14:29.760 money neatly sitting on top of the tables. They call 0:14:29.880 --> 0:14:33.040 this a high speed room. 0:14:33.160 --> 0:14:34.560 And what's specifically and. 0:14:34.640 --> 0:14:38.880 That's the sound of cash being that is hard measured. 0:14:39.560 --> 0:14:43.560 That is the sound of the currency going into the machine, 0:14:43.760 --> 0:14:47.600 and it's singling those notes. So there's stacks of hundreds, right, 0:14:47.640 --> 0:14:49.920 they're going into that machine and they're kind of getting 0:14:49.920 --> 0:14:52.080 stacked on a rake, and it is really pulling those 0:14:52.200 --> 0:14:56.720 notes at rapid pace and then sending them singly one 0:14:56.760 --> 0:14:58.040 by one through the machines. 0:14:58.160 --> 0:15:01.400 So it's not quite fed money intergo burr, but it 0:15:01.480 --> 0:15:03.520 is a high speed money processor go burr. 0:15:03.760 --> 0:15:05.920 Some people are going to be disappointed that the FED 0:15:06.000 --> 0:15:08.960 is not literally printing the cash. 0:15:09.120 --> 0:15:12.680 Certainly, we're imaging every strap that comes in here on 0:15:12.920 --> 0:15:16.400 the currency, so that information relates back to the banks 0:15:16.400 --> 0:15:18.880 that's sent it in, so we have that information. If 0:15:18.920 --> 0:15:21.840 there's any disputes, we certainly send that out to our 0:15:22.320 --> 0:15:26.200 financial institutions. The machine will cut the straps off and 0:15:26.240 --> 0:15:30.640 then take each individual note, run it through our sensors, 0:15:31.000 --> 0:15:34.160 and it will make rapid decisions on whether it is 0:15:34.400 --> 0:15:37.240 fit for circulation or it would be shred or if 0:15:37.280 --> 0:15:38.600 it needs to have another look. 0:15:38.920 --> 0:15:41.520 So the sensors would be looking for things like if 0:15:41.560 --> 0:15:43.800 there's a mark on it, or a terror or that 0:15:43.960 --> 0:15:44.440 sort of thing. 0:15:44.520 --> 0:15:47.880 Correct, it's checking the fitness level, so is it clean, 0:15:48.120 --> 0:15:51.360 is it soiled. It's checking the authenticity of it. It 0:15:51.440 --> 0:15:54.320 is checking that it's the correct denomination. So it's looking 0:15:54.360 --> 0:15:56.040 at all of those things very rapidly. 0:15:56.400 --> 0:15:58.560 Does human judgment ever come into this or can it 0:15:58.640 --> 0:16:00.720 just be one hundred percent determined? 0:16:01.040 --> 0:16:04.240 So any items that are rejected on the machine will 0:16:04.240 --> 0:16:07.720 go to a secondary process where the operators will handle 0:16:07.800 --> 0:16:10.760 notes by hand. They will feed them again through another 0:16:10.840 --> 0:16:14.280 set of sensors and it'll take that read. But the 0:16:14.400 --> 0:16:18.800 end determination on things like counterfeits are our staff are 0:16:18.800 --> 0:16:21.520 trained on counterfeits, they're tested on counterfeits, and they do 0:16:21.600 --> 0:16:24.600 make those decisions as they're looking at those notes. So 0:16:24.920 --> 0:16:27.280 as you can see the large machine we talked about 0:16:27.280 --> 0:16:29.760 here at the end of the machine, and this tube 0:16:29.760 --> 0:16:31.520 that's going up into the ceiling, you can see the 0:16:31.560 --> 0:16:36.280 fluttering in that clear window looks like a bank drive 0:16:36.360 --> 0:16:40.080 up tu more pharmacy tube. That's where the shreds are 0:16:40.120 --> 0:16:47.040 exiting our floor to go to our bricketder. That's what 0:16:47.120 --> 0:16:48.600 it sounds like when they don't roll straight. 0:16:49.680 --> 0:16:51.680 Notice the wall guards. 0:16:52.160 --> 0:16:53.760 We have our bumpers for a reason. 0:16:55.080 --> 0:16:57.080 What happens to all the shredded money? I know you 0:16:57.160 --> 0:16:59.160 sell some in like the gift shops. 0:16:58.840 --> 0:17:01.359 Well we give it a well give it away, Well. 0:17:01.320 --> 0:17:03.440 We definitely want some. But like what happens to the 0:17:03.480 --> 0:17:05.000 majority of it Here. 0:17:04.880 --> 0:17:08.439 It's sent out for recycling. Most FED offices send it 0:17:08.480 --> 0:17:10.080 out to be recycled. 0:17:09.720 --> 0:17:11.800 Recycled back into future bills. 0:17:12.280 --> 0:17:15.879 No, here it's turned into some sort of fuel. We 0:17:15.960 --> 0:17:19.080 send it out and at other feds it's different to 0:17:19.240 --> 0:17:20.520 know one of the fed's condos. 0:17:35.680 --> 0:17:38.480 Once the cash is all processed and sorted, it gets 0:17:38.480 --> 0:17:39.639 stored in the bank's vaults. 0:17:39.920 --> 0:17:42.760 And these vaults are huge. They look straight out of 0:17:42.800 --> 0:17:45.760 a movie, think Ocean's Eleven, but bigger. 0:17:45.880 --> 0:17:49.200 So as we locked it in, you got to lower 0:17:49.240 --> 0:17:51.000 the floor or the door cannot shut. 0:17:51.560 --> 0:17:55.320 Each door weighs like eighty thousand pounds and you have 0:17:55.359 --> 0:17:58.520 to drop the floor to actually be able to open 0:17:58.560 --> 0:18:00.760 and shut them. So you just sort of have envision that. 0:18:01.359 --> 0:18:03.480 If they tell you to keep your hands and arms 0:18:03.480 --> 0:18:05.679 inside the car at all times, you do it. 0:18:05.720 --> 0:18:10.200 In this one, the vaults are over one hundred years 0:18:10.240 --> 0:18:13.520 old now, and it took over two hundred and twenty 0:18:13.560 --> 0:18:19.080 trips to transfer the Chicago Fed's entire cash holdings from 0:18:19.119 --> 0:18:22.600 their previous location to this new site. 0:18:23.080 --> 0:18:25.200 You know, the wheel gets turning, relaxing in place. 0:18:25.720 --> 0:18:29.560 Yeah, it's got kind of a master and commander's ship 0:18:29.800 --> 0:18:32.160 wheel field to it. 0:18:34.520 --> 0:18:43.800 And what's the combination to a man, there's multiple. Now 0:18:43.840 --> 0:18:45.960 we turn the dials on the combination so that way 0:18:45.960 --> 0:18:48.119 it sets it back for the next business day, so 0:18:48.240 --> 0:18:49.119 no one could just come. 0:18:49.000 --> 0:18:49.600 In and open it. 0:18:54.000 --> 0:18:56.920 As we walk around these halls. Down deep in the basement, 0:18:56.960 --> 0:18:59.760 they're screens showing live streams of outside of the FED. 0:18:59.760 --> 0:19:03.240 Bill You could see the streets and sidewalks outside the bank. 0:19:03.960 --> 0:19:06.959 Why is that showing a video of the outside. 0:19:07.680 --> 0:19:11.320 So that is what we call the windows to the world, because, 0:19:11.440 --> 0:19:14.359 as Austin mentioned, we are in the basement and we 0:19:14.400 --> 0:19:16.600 want to know if it's raining, and instead of calling 0:19:16.640 --> 0:19:19.199 Austin to ask him if it's raining, we have our 0:19:19.240 --> 0:19:20.040 own windows. 0:19:20.200 --> 0:19:22.879 We don't have windows. We got a second basement, a 0:19:23.000 --> 0:19:26.600 third basement, and you want to know is it's sunny. 0:19:26.359 --> 0:19:33.080 Or Okay, So we're gonna come around the corner here 0:19:33.400 --> 0:19:36.719 and then we're gonna step inside. This is considered a 0:19:36.760 --> 0:19:38.520 working vault, so you follow me in. 0:19:40.480 --> 0:19:43.439 It's the vaults, oh my gosh. 0:19:43.480 --> 0:19:45.520 And so what we have in here are two more 0:19:45.560 --> 0:19:49.320 paying rooms, just like we talked about outside, and then 0:19:49.560 --> 0:19:52.840 this vault it has these working rooms and then we 0:19:52.920 --> 0:19:56.359 have inventory storage. You can see some of our leadership 0:19:56.480 --> 0:19:59.560 is in here doing some work right now. But this 0:19:59.680 --> 0:20:02.960 is where we have the new inventory stored, as well 0:20:03.000 --> 0:20:07.119 as some fit inventory and some of the orders that 0:20:07.160 --> 0:20:09.679 will go out tomorrow. Where the smell is. 0:20:09.640 --> 0:20:12.679 The strongest, right, Yeah, you just smell that smell. 0:20:13.000 --> 0:20:14.480 This is a fresh money. 0:20:14.560 --> 0:20:15.920 That's fresh money. 0:20:16.720 --> 0:20:18.639 The smell fresh money in the morning. 0:20:19.240 --> 0:20:22.200 This is probably what I remember most about the experience, 0:20:22.440 --> 0:20:25.040 the smell of new money. This is where the FED 0:20:25.160 --> 0:20:27.399 keeps bills ready for distribution to banks. 0:20:27.800 --> 0:20:30.239 Yeah, in a room with millions of dollars in it, 0:20:30.359 --> 0:20:33.639 that smell is strong. This is the room where you 0:20:33.680 --> 0:20:37.600 really get to appreciate the physical aspects of money, because, 0:20:37.840 --> 0:20:40.800 as it turns out, dollars aren't just green. When they're 0:20:40.840 --> 0:20:43.439 all stacked up, you start to see there's a whole 0:20:43.560 --> 0:20:47.320 range of colors in there. And of course there's that smell. 0:20:47.359 --> 0:20:48.200 It's a good smell. 0:20:49.000 --> 0:20:51.720 Yeah, And it's funny for the longer you work here, 0:20:51.800 --> 0:20:54.680 there is a thing really about nose blind because oh, 0:20:54.720 --> 0:20:56.719 I've heard you. You don't really pick it up as 0:20:56.800 --> 0:20:59.200 much anymore as our visitors are always like, what is 0:20:59.280 --> 0:20:59.680 that smell? 0:21:00.880 --> 0:21:01.080 Yeah. 0:21:01.800 --> 0:21:05.280 I went to the bureau engraving and printing. One of 0:21:05.400 --> 0:21:08.879 my quests was where does this smell? Command is it? 0:21:08.960 --> 0:21:12.359 The paper is in the wood and there are big 0:21:12.520 --> 0:21:14.000 buckets of the green ink, and. 0:21:14.000 --> 0:21:14.680 I to go. 0:21:14.840 --> 0:21:15.760 I was like, that's it. 0:21:15.960 --> 0:21:16.720 That's the smell. 0:21:17.600 --> 0:21:20.080 And this room is where the fit money, All the 0:21:20.119 --> 0:21:23.040 stuff that's been processed by the high speed machine gets 0:21:23.040 --> 0:21:23.840 paid out chines. 0:21:23.920 --> 0:21:27.600 That machine creates fit inventory, and that's on the right 0:21:27.640 --> 0:21:28.920 side of the room. Here on the left side of 0:21:28.960 --> 0:21:31.800 the room. Are there orders that they're going to be 0:21:31.880 --> 0:21:36.679 paying out tomorrow, So our allocator will pull the orders 0:21:36.960 --> 0:21:40.240 like a grocery list. Those orders get downloaded. We have 0:21:40.320 --> 0:21:43.000 a list of how many bundles they want of each denomination. 0:21:43.359 --> 0:21:45.119 We'll fill it like a grocery list. They'll put the 0:21:45.119 --> 0:21:48.720 inventory on the table and then the verifier will confirm 0:21:49.200 --> 0:21:53.199