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The amount of $100 bills in circulation is surging. And it's leaving some economists scratching their heads.
The number of outstanding U.S. $100 bills has doubled since the financial crisis, with more than 12 billion of them across the world, according to the latest data from the Federal Reserve. C-notes have passed $1 bills in circulation, Deutsche Bank chief international economist Torsten Slok said in a note to clients this week.
[...] "By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption," [former Standard Chartered bank chief executive Peter] Sands wrote.
The global illicit money flows were "staggering" and fuel crimes from drug trafficking and human smuggling to theft and fraud, Sands said. He estimated that depending on the country, tax evasion robs the public sector of anywhere between 6 percent and 70 percent of what authorities estimate they should be collecting. And despite "huge investments in transaction surveillance systems, and intelligence, less than 1 percent of illicit financial flows are seized.
[...] "The Federal Reserve and Treasury make 99 dollars for every $100 dollar bill they print and sell offshore," Colas said. "There's a natural desire to keep printing these things — the U.S. government makes a lot of money selling them."
Superbills?
https://en.m.wikipedia.org/wiki/Superdollar
(Score: 2, Interesting) by khallow on Friday March 01 2019, @10:51PM
It's amazing that the US strongly capped its currency back in 1946 and yet, 70 years later (and incidentally the Peter Sands paper was written in 2016) with all that inflation that has happened, this isn't good enough for some whiners. I have a different proposal. Let's increase the size of the largest bills to keep up with inflation over that period of time.
A dollar in 1946 would be worth over $12 [in2013dollars.com] in 2018 (using the US CPI index). That's a bit over a factor of ten. So let's introduce $500 and $1000 bills to keep the US dollar relevant and useful to all this global trade and money hoarding that Summers and Sands are concerned about.
I find it remarkable how one can propose crippling an important public good because it occasionally gets used for unpopular and sometimes illegal activities. It's probably just a convenient coincidence that eliminating the value of most of US paper money will generate a lot of business (including the above unpopular and sometimes illegal business) for banks and such who would naturally fill that niche after the paper currency option goes away. My view is that is a terrible idea and instead expanding the role and utility of US paper currency is a far better approach with huge potential to help the global economy.