Money to Burn?

First of all, Happy belated New Year to all 16 people who read this blog. Sorry for the lapse in posts; I’ve been busy basking in the relative success of my last article, looking for a new job, and freezing my ass off in the midst of this cruel phenomenon called New England winter.

Whilst taking shelter from the subfreezing temperatures–emerging only to go on job interviews and buy scotch–I’ve done my best to keep up with the world beyond the attic in which I reside. I know, for example, that the Federal Reserve raised rates for the first time in 2016, signalling that inflation may be returning and the US economy might finally be moving towards normalcy.


How you feel about inflation depends on where and when you live. In the developed world, hyperinflation, once a real problem, has largely been tamed by central banks, which use monetary policy to constrain the money supply when inflation starts to get out of hand. In fact, since the financial crisis inflation has been so weak that some central banks have pursued negative interest rates with the hope of staving off deflation.

In other parts of the world, hyperinflation persists. Venezuela is slated to experience 1,600% inflation in 2017, per the IMF.

The combination of cold weather and thoughts of inflation brought to mind some famous pictures of residents of the Weimar Republic using increasingly useless money for purposes other than exchange.


Anyway, that got me wondering: what kind of inflation would we need to see to make dollar bills an efficient heating source? To find out, I compared dollar bills to other sources of heat on a cost/megajoule basis. While the nominal cost of other heat sources would increase with inflation, it would remain constant with dollar bills because their heating value is independent from their monetary value.

Difficulties, Assumptions, and Deficiencies

In order to turn this into an answerable question I had to build some assumptions and omissions into my calculations.

First of all, all prices listed reflect only supply costs associated with different fuel types. Energy costs are typically broken down into charges for supply (rate times quantity) and delivery, which, depending on the energy source in question is either a fixed cost, a function of supply, or a function of “user profile.” For example, delivery charges for electricity are often higher during hours of “peak demand.”

Second, all calculations are based on prices from my area. I also didn’t go crazy trying to find the best deals on things like pine firewood, but instead relied on the most available source (in the case of pine wood, the Stop and Shop down the street). Different prices would obviously mean different equilibrium points.

The third assumption, assuming the price of these energy sources would not be influenced by anything other than inflation, is highly unrealistic. You can bet that if the price of natural gas doubles for 10 years in a row, people will start coming up with new heating sources or moving south for the winter. But again, for simplicity’s sake we’ll assume nothing will change in response to increasing prices.

One last assumption: that no one would be foolish enough to burn dollar bills in any denomination other than $1.



Far and away the most challenging part of this was doing the data conversions; as you can imagine, kerosene isn’t commonly purchased by the kilogram. I haven’t taken a math or science class in about 4 years. Add to that my stubborn insistence that I do my own calculations by hand and you’ve got a recipe for a very humbled author.

Nevertheless, I persisted. The second column in the table above shows lower heating values–the net amount of energy released by burning–for various fuel sources, measured in megajoules per kilogram (A friend explained this concept to me–thank you, Zane). The third lists the cost per kilogram, and the fourth displays the cost per megajoule of energy.

With the exception of dollar bills, finding heating values for these different substances was easy. I found a couple reliable websites (like this one and this one) that listed heating values. Wikipedia also lists heating values for common fuels. There were a few discrepancies when I looked to confirm values, but nothing too major.

Dollars are made of a blend of cotton and linen fibers (about 75% and 25%, respectively), so I wanted to take a weighted average of the two heating values. Unfortunately, even that information proved too difficult to find. I thought it would be easy to find similar pieces online, but I turned out to be wrong about that. I only found one article that was trying to get at the same thing and in the end, I just decided to go with the value they suggested: 4 btu per bill or 4.22 mj/kg.

If you want to cut to the moral of the story, here it is: Don’t burn dollars for heat. It’s a terrible, terrible idea.

How Terrible?

Barring some kind of extreme and sustained change to US monetary policy, it will probably never make sense to burn dollar bills for heat. Here’s a chart showing how long it would take for dollars to become an efficient fuel source over years at 100% annual inflation (prices doubling every year):


The price of natural gas would have to double every year for 16 years before you could produce more heat by burning singles than buying natural gas. However, as Venezuelans know, prices can increase faster than that. Here’s the same graph with the Venezuelan inflation rate of 1600%:

“That escalated quickly.”–Ron Burgendy

So maybe we’ll see some Venezuelans burning currency in the near future, but hopefully not–a lot of human misery comes along with that kind of inflation. A regime change and some monetary restraint would be a much better outcome.

If anyone out there has some other heating source they’d like to see added to the graphs, leave a comment below and I’ll gladly include it.

2 thoughts on “Money to Burn?

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