As opposed to the effort to detect counterfeit coins, new security features added to the currency paper makes it easier to detect counterfeits. First, examine the currency and compare the note you are questioning to one of the same denomination and series (date with possible letter added). Look at the quality of the paper and the sharpness of the printing. Look for how the note differs from the genuine note.
If the printing looks flat, darker, the colors do not look the same, and does not show the fine details that the original, you should check further. Look at the Federal Reserve and Treasury seals. On a genuine note, the saw-tooth points are clear, distinct, and share. Counterfeit notes may be uneven, rounded, or even broken. The boarder should be clear and sharp, even on a worn bill. The portrait should appear distinct from the background. If it looks like it is blending into the background, the note is likely counterfeit.
One of the tricks the counterfeiters use is to change the denomination in the corners hoping that they can pass the note to someone not paying attention. The most common alteration is changing a $1 note to look like a $10 bill by changing the numbers in the corners to be tens. You would be surprised how many times this works!
Counterfeit Currency Warning issued by the Baltimore Field office of the U.S. Secret Service in 2014.
Genuine currency paper has a distinct feel that is different from writing paper. Currency paper is primarily made from cotton with tiny red and blue silk fibers embedded in the paper. Counterfeiters will try to simulate this feature by printing red and blue lines on their paper. You can see the difference between embedded threads and printed lines using a magnifying glass.
One thing counterfeiters do is to try to print or copy genuine notes on paper that they bleached to remove the printing from a lower denomination. Bleaching will dull the security features but not eliminate them. Counterfeiters count on you not understanding the security features to pass the note.
First, look for the watermark. Every new note except to the $1 bill has a watermark of the portrait on the front of the bill. Hold the note up to the light and look for the watermark. You should be able to recognize the portrait as being the same portrait as printed on the note. If you are looking at a $20 bill, you should see the portrait of Andrew Jackson. If the watermark portrait is unclear, missing, or does not look like Jackson, you have a counterfeit note. If the watermark is the number “5” the paper is from a $5 bill and was reprinted by a counterfeiter.
Also look for the security thread that may be running up and down to the left or right of the portrait. The security thread should say “USA” and the denomination repeating on the thread. If you are looking at a $100 note and the denomination on the thread says “FIVE” then you are looking at a bleached counterfeit.
Counterfeit Detection Pens Do Not Always Work
Every time I visit a store and watch as the cashier use one of these currency pens to try to detect if I passed a counterfeit note, I laugh because it is not a dependable test.
How to tell a counterfeit note using a counterfeit detection pen.
The counterfeit detection pens use an iodine-based ink that writes in yellow or are colorless. If the ink darkens, the bill is allegedly a counterfeit note. The principle is that the iodine ink will react with the natural starches in regular paper. Since currency paper is made from cotton, it does not have these starches and will not react with the iodine-based ink.
If you are trying to pass a bleached note, the ink will not react since it is real currency paper. If you are trying to pass an altered note, the ink will not react since it is real currency paper.
You can also make a genuine note look like a counterfeit by spraying starch that you would use to iron shirts on the note. Spray the starch on the note and use a warm iron get it to stick to the note. When you try to use the note and the cashier uses a counterfeit detection pen, the ink will change colors and you will be accused of trying to pass a counterfeit note.
The only way to reliably detect counterfeit currency is using the embedded security features.
If you receive a counterfeit note, do not return it to the person who gave it to you. Gather as much information as you can such as the description of the person, the description of anyone with that person, license plate and make of the car they might be driving, and call the police or contact your local U.S. Secret Service field office. Try not to handle the note. Rather, put it in something to protect it, like an envelope and give it to the police when they arrive to investigate.
Remember, in the United States it is illegal to posses counterfeit notes that are not marked as counterfeit or defaced in a way that make is clear the note is note genuine.
Finally, in the last installment we discuss resources you can use if you do not trust your own judgement.
A week ago, the European Central Bank announced will stop printing the €500 banknote by the end of 2018 “when the €100 and €200 banknotes of the Europa series are planned to be introduced.”
The Europa series is the second designed series of banknotes that will include updated security features and updated designs. ECB has been working on a phase in of the Europa series since 2013 beginning with an education program followed by the issuance of the €5.00 in 2014, €10.00 in 2015, and €20.00 this year.
Although not mentioned in the press release issued by the ECB, it is likely the result of an article by former Treasury Secretary Lawrence Summers who quoted an academic research paper noting how the United States $100 Federal Reserve Note and the €500 banknote have become favorites of criminal enterprises in order to carry out cash-based transaction. In fact, the report noted that criminals have nicknamed the €500 banknote the “Bin Laden.”
Experts interviewed by The Wall Street Journal expressed their doubt that this will do anything to stop crime. While the experts think it is unlikely, there is
an aspect of the analysis that the academics are not thinking about. These academics appear to be also in favor of eliminating physical currency which does
not consider the nature of a legitimate cash economy.
The ECB will not demonetize their first series of banknotes that will allow the current supply of 500e notes to continue to freely circulate.
Obverse of the 2009-present Native American Dollar featuring the portrait of Sacagawea
Last month, Secretary of the Treasury Jack Lew announced a series of design changes that will occur on United States currency. These changes will be phased in over 10 years to coincide with the production schedules in place currency redesign.
I will go into the more details of the changes at a later date, but during my travels around the interwebs I came across a television news report from KIFI, the ABC affiliate in Fort Hall, Idaho. Although it is like every other news story it has one feature that no other news outlet was able to add to their story: an interview with Randy’L Teton.
Randy’L Teton is a member of the Shoshone-Cree tribe who was the model for Glenna Goodacre’s design for the Sacagawea dollar coin. Teton was a student at the University of New Mexico majoring in art history and was working for the Institute of American Indian Arts Museum in Santa Fe when Goodacre visited looking for Shoshone woman to be her model since no images of Sacagawea exist. Teton was chosen for as the model.
For anyone who has not seen or heard Ms. Teton, here is the video of KIFI’s report:
A reader with questions recently reminded me of a previous version of this article. After reading what I wrote, I noticed a few things that required editing along with some additional information I could add. Rather than keep this to myself, I am sharing so that it can also serve as a reminder to everyone about proper storage.
After putting in the time, effort, and resources to assemble your collection do not just throw it in a draw or closet. Coins, currency, tokens and medals can become damaged if not stored properly. It would be a shame if your collection is damaged when a little effort can keep your collection preserved.
Storing a collection is a matter of dealing with two factors: using archival safe storage materials and the environmental factors of where your collection is stored.
All coins, medals, tokens, and currency are made from materials that will react with the environment. Metals will oxidize and tone, some with patterns that intrigue collectors. Paper-based materials can be made from cotton rag or linen that may not break down the same way as paper but can be damaged in a way that will affect its value. The key to storing your collection is to use products made from archival safe materials. Archival safe materials are those made that are not acidic, materials that do not turn acidic over time, or materials that are not too alkaline.
Acid free means that the pH (potential Hydrogen) measure is 7.0 or less. A pH measure of 7.0 is neutral and greater than 7.0 is basic or alkaline. Although acidic materials will damage your collection, materials too alkaline will also cause damage. Those that produce acid free supplies with materials that is as close to being pH neutral as possible.
It is possible for some materials to be acid free without being archival safe. These are substances that can breakdown over time and become acidic. For example, commercially made paper contains lignin, a bonding elements that naturally occurs in the pulp that helps holds the wood fibers together. While lignin is not acidic it gives offs acids as it deteriorates. To prevent lignin from becoming acidic it must be treated. This treatment involves dipping the paper in a solution that neutralizes the natural lignin.
Another storage item to stay away from are plastic products made from polyvinyl chloride (PVC). PVC is a inexpensive plastic that is used as an additive to other plastics to make softer, more flexible products. One example of a numismatic product that can be made using PVC are the two-pouch coin holders called flips where each pouch is 2-inches square. PVC in itself is neutral but gives off an acidic gas in reaction to atmospheric conditions. The PVC gas will not only react with the coins but will deteriorate the plastic. The result will be a green or gray streaks or blob appearing on the coins.
The gas produced by deteriorating PVC will damage the surface of the coin. Once a coin is damage by PVC it cannot be reversed. There are ways to conserve coins that are damaged by PVC as long as the PVC contamination is discovered early and is only on the surface. Once it mars the surface, the coin is permanently damaged and its value diminished.
Archival Safe Flips and Cases
When purchasing plastic or clear storage items, hard plastics or those made of Mylar are the best choice. Capsule manufacturers use a neutral plastic that does not contain PVC while those that make archival safe 2×2 flips use Mylar. The makers of 2×2 cardboard holders also use Mylar over the cutouts while album manufacturers use Mylar to make the cover sliders found in albums.
Some people like to buy older albums because of they are unique and have a classic look. Those albums may not be made of archival material including paper with active acid from the deteriorating lignin that was not neutralized during manufacture because this was not a concern. Also, cover sliders could be made of PVC or other plastics that are not neutral. If you are not sure whether that used album is safe, it is best to buy a new archival safe album.
Although this discussion centered on coins, the same can be said for currency storage. The only difference will be the size and types of holders.
You can use the most archival safe materials but they will not protect your collection from environmental factors. The general rule of thumb is to stay away from the extremes. Do not store your collecting in a place that is too hot or too cold. Try not to store your collection in a place that is too humid or too dry since both could cause your storage materials to react. In other words, the average home with a temperature of 64-78 degrees with an average humidity of 30-percent should not be a problem.
Those living in colder areas where the home heater is being used longer than other areas of the country may have to compensate. Forced air heating systems tend to dry the air that could cause damage to your collection. If you use a humidifier, whether built in to your heating system or a standalone unit, you might consider investing in a hygrometer to keep the relative humidity between 30 and 40-percent.
Where you store your collection also has to be a concern. If you keep your coins in a cabinet, the gasses from the wood and even the paint or stain can cause damage. While wooden cabinets are attractive and practical, you do not want to store your collection some place that could add to the environmental concerns.
Metal cabinets are a better option. Safes and safety deposit boxes in temperature controlled vaults also makes great storage options aside from being able to keep your collection secure.
One of the factors that could cause wood rot in cabinets is excess humidity. If the humidity in your home or where you store your collection cannot be controlled, you should use a desiccant. A desiccant is a substance able to absorb moisture in the air. Two common desiccants are silica gel, the little packets that you see in some packaging, and montmorillonite clay.
Choosing which desiccant to use depends on your situation. If your storage area is not that humid, use silica gel. It well suited for lower moisture area over a longer period of time, about six months. For high humidity areas, use a clay desiccant. Although it will not last as long as silica gel (about three months), clay is more effective at removing moisture where the humidity is higher. Another option is to use a combination, especially during seasons of high humidity. You can purchase silica gel and clay desiccants at many hobby stores and stores that sell collecting supplies.
While there are other types of desiccants, they are not recommended for use around collectibles. Calcium sulfate and calcium chloride uses sulfur and chlorine, both will not react well with the metals of your coins. Activated charcoal can add carbon dust to the air, which can attach itself to your coins. Some have suggested using salt as a desiccant. Salt is made of sodium chloride that would also introduce metal damaging chlorine into the environment.
Not all safes are safe for coin storage. Click on the image to read the story about a safe found in the house of the writer’s late grandfather.
Choosing Storage Products
Be careful, old coin albums may not be archival safe!
If you buy products made by a reputable manufacturer that advertise them as archival safe then the only difference between products are the way your coins will be displayed.
Albums are popular for raw coins collected in the published series. You can find albums for many series from different manufactures to suit your tastes. Each manufacturer has its own distinct color and style. The difference is your personal preference.
Coins that have been encapsulated by third-party grading services may present different issues for storage and display. While there are a few manufacturers that make a special page to fit the grading service’s holders, collections made up of coins encapsulated by different grading services can be stored in boxes.
When storing grading service holders it is important to remember that the holders are not considered airtight. Third party grading services uses sound waves to melt the halves of the plastic holder to bond them without using chemical adhesives. While this type of sonic seal is strong, it can be subject to breaking if the encapsulated coin is mishandled. Additionally, whatever contaminants were in the air around the time the slab was sealed would be trapped with the coin.
Although most encapsulated coins could be stored in a standard plastic case, those who want extra protection should consider storing the slabs in special archival quality inserts or polyethylene bags.
When storing your collection you can use the same archival quality containers that are used by organizations like the United States Archives or Library of Congress. Although many of the containers may be coated with an alkaline buffer should not be a deterrent. Since your coins are in another holder, whether encapsulated or within an album, the buffer will maintain a barrier between your collection and the storage box that should not hurt your coins.
Although proper storage of your prized collection is important, do not make it more important than your collection. Be careful how you store these items but do so in a way you can still enjoy what you collected.
Image Credits (in order of appearance)
Collecting starter bundle image found at Amazon.com
In the Spring of 2010 during the recent recession, a group representing business interests in Baltimore formed the Baltimore Green Currency Association. As part of their efforts to support local business, the BCGA created BNotes, a local currency that can be used at participating businesses in and around Baltimore. Currently, there are over 230 businesses accepting the BNote for goods and services.
Legally, the BNote is coupon representing the amount of money on its face and are redeemable at participating merchants. Consumers can receive BNotes as change for a transaction or may visit one of the official cambios (money exchange) locations to exchange dollars for BNotes. For every $10 that is exchanged for BNotes, you will receive a 10-percent bonus, which means if you exchange $10 you will receive BN11. You can also exchange BNotes for dollars at a reverse rate (receive $10 for every BN11 in BNotes).
The first BNotes were issued in April 2011 featuring the designs of Fredrick Douglas on the BN1 note and Edgar Allan Poe on the BN5 note. The reverse of the notes features a Baltimore oriole (the bird, not a ball player) on the $1 BNote and a raven on the reverse of the $5 BNote.
One Dollar Baltimore B-Note featuring Frederick Douglas and a Baltimore oriole.
Five Dollar Baltimore B-Note featuring Edgar Allan Poe and a raven.
After five years, BCGA wants to create a new series of BNotes adding BN10 and BN20 notes to feature images of two notable Baltimore women. Douglas and Poe will remain on the current two notes. It is being advertised as the first time that women will appear on currency in the United States. Currency collectors know that Martha Washington on the front of the Series 1886 and 1891 $1 silver certificates. She also appeared on the back of the Series 1896 $1 silver certificate.
In order to raise the $15,000 needed to print a new series of BNotes, BGCA has started an Indiegogo campaign. To receive the new notes, you have to give $30 to receive a new BN1, BN5, and BN10 with the same serial numbers. For $50 you can get all four notes with the same serial number. There are other perks like a special tote, invitation to a cocktail party, framed notes, etc.
Although BGCA will announce the women to be featured on the notes later this month, it may be a good bet that Sen. Barbara Mikulski. Senator Barb, 79, is a Baltimore native who will retire after this session. Before serving five terms as senator, she served 5 terms representing Maryland’s Third District in the House of Representatives. Mikulski started her political career in 1971 as a member of the Baltimore City Council.
There have been previous attempts to create tokens using a crowd funding campaign, but this appears to be the first attempt to create a community currency in this manner. If this is a success, it could inspire other business communities to do something similar. For collectors, it is a unique, inexpensive collectible.
Images courtesy of the Baltimore Green Currency Association.
The latest attack on the money in your pocket is the talk about eliminating the highest denomination banknotes. This discussion was intensified in the political policy world with the article by Lawrence Summers that appeared in The Washington Post. Summers is a professor at Harvard and had once been the Secretary of the Treasury and Director of the White House’s National Economic Council.
Summers cites a paper by Peter Sands of Harvard and students that claims to make a compelling case to stop issuing high denomination notes and possibly withdraw them from circulation because of its use in crime and corruption.
Crime is mostly a cash-based enterprise. Criminals do not use gold, checks, or credit cards. As those of us who use cash over other payment types understand, cash is more anonymous. Cash transactions can be used to perform untraceable transaction that could be used to evade taxes. Criminals use cash to avoid law enforcement and terrorists use cash to fund their activities outside of the monitoring of financial transactions. In fact, Sands notes that these criminals have nicknamed the €500 note the “Bin Laden.”
In order to carry out cash-based transactions is the ability to carry the cash. Sands’ paper and Summers’ article both say that lower denomination currency will make it difficult to carry large volumes of currency in order to make these transactions. Considering the weight of United States currency, carrying $1 million worth of $100 Federal Reserve Notes would weigh about 10 kilograms (22.0462 pounds). Using a 15 liters (just under 4 gallons) as the “standard” briefcase capacity, you could carry $1 million in 0.7 cases.
As a comparison, $1 million worth of $50 Federal Reserve Notes would require 1.4 briefcases and 3.5 briefcases when using $20 notes. If the $1 million was being paid using €500 notes, it would weigh 2.2 kilograms or about 4.85 pounds that takes up a quarter of a briefcase.
Comparison of the weight of the equivalent of $1 million using U.S. Federal Reserve Notes
Comparison of the weight of the equivalent of $1 million using euro currency
By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption. Without being able to use high denomination notes, those engaged in illicit activities – the “bad guys” of our title – would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their “business models”.
Summers agrees with Sands and even suggests that the baseline currencies, specifically the dollar and the euro, should “stop issuing notes worth more than say $50 or $100.” Both consider demonetizing these high denomination notes a step in the right direction.
$207 Million in $100 notes seized as part of a drug raid in 2007
In the world of policy analysis there is the concept of the three-legged stool. The first leg is to identify the policy, which is what Sands’ paper does. Next would be to translate the policy idea into something that could be used as the basis for a law. The final step is something to drive the policy to be considered by the lawmakers in order to do something with the policy.
This is how the one cent coin went from being 95-percent copper to being copper-covered zinc. There was the idea to change the composition of the coin in order to save money. After the idea, there was the research and the law writing that went into changing the composition. As part of that second-leg exercise was the creation of the 1974 aluminum cent pattern. Finally, by 1982, the costs were so out of line that it became the driver that forced action.
Although the article and report has been well discussed as part of the financial press it is not likely to be acted on in the near future. It is only the first leg. It will take time before this stool gets its two other legs.
Images were copied from the report “Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes,” by Peter Sands, et. al.
The iBill currency reader is a product of Orbit Research. Retailing at $119.00, iBill is a pocket-sized reader that can identify all Federal Reserve Notes in circulation. Orbit Research claims that “most bills are identified in less than one second” and can announce “the denomination in a clear female voice; tone and vibration modes protect privacy.” It requires one AAA battery that is included.
The Meaningful Access Program came about as the result of a settlement between the government and the American Council of the Blind who brought suit claiming that U.S. currency violated Section 504 of the Rehabilitation Act. This was first confirmed by the courts in 2006 and subsequent appeals had judges requesting a settlement. Following the 2009 settlement, the BEP began to work on meaningful access programs.
IDEAL Currency Identifier
BEP developed EyeNote
One of their first attempts was EyeNote, an iPhone app the camera to scan the note and identify it in 2-4 seconds. Although slower than the iBill, it is a very capable app that will allow the visually impaired iPhone user to carry one less device.
A more impressive app is the LookTel Money Reader available for iOS and the Mac. For the visually impaired traveler, not only can Money Reader recognize U.S. currency, but the currency of 20 other countries including the Australian Dollar, British Pound, Canadian Dollar, Euro, Indian Rupee, Japanese Yen, and Saudi Arabian Riyal. Money Reader is faster at identifying currency than EyeNote and can identify fragments, as I found in my last review.
LookTel Money Reader
In order to qualify for the free iBill reader, a “competent authority” must certify that your vision is 20/200 or less in your better eye with corrective lenses or that the widest diameters of visual field angular distance not greater than 20 degrees or that the “competent authority” certifies that you cannot read any printed material regardless of correction. The competent authority is usually a doctor, registered nurse, licensed therapists, institutions and welfare agencies familiar with your case.
If you think you, a relative, or someone you care for qualifies, download and fill out the simple form and send it to the BEP address on the form&rsqou;s instructions. It will take up to eight weeks for you to receive your free iBill currency reader.
As an aside, this is not a taxpayer funded venture. BEP earns its funding from their business operations. Most of their money is earned from printing money for Federal Reserve. They also earn a smaller amount of profit from sales to collectors.
iBill image courtesy of Orbit Research.
IDEAL Currency Identifier screenshot courtesy of IDEAL Group Inc. on the Google Play Store.
Marriner S. Eccles Building where the Federal Reserve Board is located
After spending time digging out from the Blizzard of 2016, I was reading email and was reminded about a conversation I had earlier this week. Someone asked when they would see 2016 coins in their change. As someone who also hunts through pocket change, I thought it would be interesting to discuss what is involved with what business would call the movement of inventory in the supply chain.
Inventory management for the Federal Reserve requires them to know how much currency is in circulation, how much will be required based on world-wide economic factors, and what would be required to replace the current currency supply. Since the Federal Reserve ships U.S. currency world wide, especially the $100 Federal Reserve Notes, someone has to project what the world is going to demand based on economic factors that it has no participation in.
Not only does the Federal Reserve has to track the amount of money in circulation but they also have to account for the different denominations in order to replace torn and worn notes. For instance, it was once estimated that 90-percent of the order for $1 Federal Reserve Notes were delivered to replace worn notes in circulation.
Once the order is placed by the Federal Reserve, the U.S. Mint and the Bureau of Engraving and Printing work to fulfill that order. The U.S. Mint strikes the coins and has they placed in one-ton ballistic bags for delivery. The Bureau of Engraving and Printing bundles the currency in packs. Multiple packs make a brick. Bricks are then piled on pallets that are used for delivery.
From Philadelphia and Denver, the coin bags are loaded onto secured trucks and transferred to the Federal Reserve for distribution. A similar transfer happens at the Bureau of Engraving and Printing in Washington and Fort Worth where the pallets are shipped to the Federal Reserve.
Although there may be a few warehouses and other distribution processes involved, the coins and currency are shipped to one of 26 “cash rooms” around the country based on need. These cash rooms are special warehouses operated by the Federal Reserve branch that store the physical currency before being distributed to the member banks.
Federal Reserve Bank of New York
Since the New York Federal Reserve Bank processes currency orders for overseas shipping, they order the most currency of the 12 regional banks. San Francisco provides banking services for Alaska, Hawaii, and other transactions throughout the Pacific Rim, orders the second most amount of currency.
Before currency can enter circulation, a member bank places an order with the Federal Reserve. It is then delivered to them from the closest cash room with the appropriate inventory necessary to fulfill the order.
Your personal bank is like the corner store in the ordering system. When the shelves are bare or threatening to go bare, they order the inventory of currency they need. The corner bank just do not order money from the Federal Reserve. Banking companies work on behalf of their branches to manage inventory. The big bank may have their own cash management operations that help ensure that they not only have the appropriate amount of currency available but they do not have too much in storage. Like product inventories, idle money is not good for business.
Federal Reserve Bank of Richmond Baltimore Coin Storage
Federal Reserve Bank of Atlanta Cash Operations
Many banks hire logistics companies to help with the flow of their currency inventory. These companies are the ones driving the armored trucks you see around town that delivers currency on order. While these logistic companies are registered currency distribution services and have permits to pick up inventory from the Federal Reserve cash rooms on behalf of the member banks, they also provide storage and delivery services.
Although your corner bank has a vault, each banking company limits the amount of currency they keep on site because of security concerns. When they need additional currency or have an excess that needs to be stored, they call the logistics company to physically move the inventory.
Four of the largest cash logistics companies
These logistics company do not take the currency and put it on the shelf until the bank calls back and asks for it to be returned. If a bank deposits a bag of quarters with the logistics company but another bank asks for bags of quarters, that bag could be transferred to another bank. Banks may order currency from the Federal Reserve or smaller banks from other cooperating banks, the logistics companies fulfill the orders from existing stock before accessing new stock.
Depending on how fast the currency is needed to circulate by your corner bank, existing currency can circulate through the logistics processing center long before the new inventory is placed into circulation.
During the recent downturn in the economy, the banks’ inventories of coins increased as people emptied jars, jugs, and bottles of coins for necessities. As the coins were returned to the bank the inventories rose beyond what they needed for circulation reducing the requirement for the banks to order more coins from the Federal Reserve. This is why it was not surprising that many people did not see current year coins until as early as April.
It is more difficult to gauge when currency reaches circulation unless there is a change in the series designation. The Series of a note is the date followed by a letter indicating that there is a change, usually to the autograph of the Treasurer or the Secretary of the Treasury. Although there is no rule, the Series date changes with an administration and the letter is added and changes as the autographs changes. Sometimes, the series date changes with the design of the currency. These are recent conventions and not the rule. All printing and design decisions are made by the Federal Reserve, Bureau of Engraving and Printing, and the U.S. Secret Service as a team.
If you want to know when the 2016 coins will reach circulation, the answer is “I don’t know.” Considering the economy is in better shape than in years past, money continues to circulate, and the U.S. Mint has produced more coins in a single year than any other in its history, if you have not seen a 2016 coin in your pocket change soon, then my best guess will be in mid-February—if the weather holds up!
Could the DC Metro’s Smartrip Card be the future of a cashless society?
Sweden is an interesting example that may not apply to the United States. The country that introduced the first banknotes to Europe in 1661 has transformed itself into a larger digital economy. Many shops and most banks have stopped handling cash. In areas that were traditional cash-related transactions, there has been a ticket or electronic system in installed. Busses require pre-paid tickets. Other mass transit relies on credit cards or pre-paid debit cards like the Metrocard in New York or the SmartTrip Card in Washington. These cards are less expensive to produce than paper tickets or tokens.
But could a cashless society work in the United States?
A key measure of the power of an economy is the Gross Domestic Product, the total cost of goods and services produced by the economy. As of 2012, the most recent statistics available, Sweden’s GDP is $184.8 billion (converted to US dollar equivalent) versus $1.56 trillion for the United States—eight times the Swedish economy. Sweden’s economy ranks 28th and the U.S. 2nd only behind the combined European Union.
For the record, China’s 2012 GDP, third on the list, was $8.36 trillion, just over half of the U.S. GDP.
The United States makes more money, spends more money, trades more money, and has more economic impact than any other country in the world.
The first problem with trying to replicate what Sweden is doing is one of scale. The United States has the single largest economy in the world. While the European Union has a larger GDP, it is made up of cooperating countries with their own sovereign interests. While some might say that it is the same as the 50 states, the federal structure of a single republic versus several cooperating republics of Europe makes like the equivalent of swallowing the ocean in one gulp versus several gulps controlled by cooperating governments in Europe. Even when European governments do not cooperate, they can individually work better than what has been going on in the United States.
Another key indicator is the poverty rate. It is important to consider those in poverty because they usually do not have the resources to participate in the advanced structures of society. People living in poverty do not have access to credit regardless of where they live, even if they do have some access to the technologies that support cashless access. Although companies are giving away smartphones in many poverty stricken areas, those customers continue to have problems paying their bills. These are the people who rely on cash.
What may account for Sweden’s low use of cash is their low percentage of its citizens in poverty. With a poverty rate of 3.97-percent, this may account for the 3-percent average currency usage. Poverty in the United States is 5-times more than Sweden at 20.59-percent. While this in itself may not be a definitive indicator, it could explain why there is a vocal opposition of anti-poverty groups when discussion turn to eliminating the cent or a cashless society.
Those who preach a cashless society and point to Sweden also fails to consider one factor that only few countries have faces: the United States has probably one of the most diverse populations. Current politics notwithstanding, the United States has historically been more open to immigration than most other nations. Sweden, while a wonderful place, has a lesser and more homogenous population. Swedes are rightfully proud of themselves, their heritage, and history and has a culture more conducive to working together.
When was the last time that we saw the United States all together? Even after the attacks of September 11, 2001, there were segments of the population that has called it a hoax and said that the government bombed itself to press an agenda.
1853 Braided Hair Half Cent Obverse – The last lowest denomination coin eliminated by the congress.
Even those who want to end production of the one-cent coins and uses the end of the half-cent as an example of the U.S. ending production of a no longer needed low denomination coin gets the reasons wrong for the reasons why its production was ended. Those who know better reminds them of the reasons and many stammer in shame before puffing out their chests and saying they are right, anyway.
In 2015, the U.S. Mint and Bureau of Engraving and Printing produced more coins and currency than ever. Both government agencies produce their main products because it was ordered by the Federal Reserve, the central banking organization of the United States. Even though paper currency may be exported, most coins are circulated in the United States for domestic use.
If there is any indication that the United States is moving to a cashless society, then why is currency production at its highest in history?
Interestingly, 2015 was the 50th Anniversary of clad, non-silver coinage except for the half-dollar that was produced with 40-percent silver until 1969. To this day there are people to decry the use of fiat money.
Regardless of what pundits say, the United States economy is more broad, diverse, and not as easy to control as in Sweden. If the United States ever gets to the point where it can support a cashless society, it might not be during the lifetime of anyone reading this today. These pundits do not see beyond their caramel macchiatos to understand the Real World.
Keep collecting this coins. Your great grandchildren may enjoy them but their grandchildren may find them interesting curiosities.
Could this Looney Tunes Silver Kilo coin be on your list?
Before it became a thing, Black Friday is the day after Thanksgiving that is usually the biggest shopping day of the year and where retailers become profitable for the year, or being in the black. When online sales began to pick up and most people were connected to the Internet by slow connections, usually by a modem, people would go their offices on Monday and use the company’s faster Internet to place their online orders. In 2005, the National Retail Federation started calling it Cyber Monday.
The meaning of Black Friday and Cyber Monday has been dulled over the last few years except as an alleged barometer for the shopping season it is still something that becomes an event where the worst behaviors can be seen on the evening news. In 2013, the U.S. Mint did their part in the Black Friday hype by offering free standard shipping for the first week of the holiday shopping season.
All this means that it is the time for gift giving and gift receiving. While we are searching for the holiday deals, what is on your wish list this year? If you want to provide details, add it to the comments below!
What are your 2015 gift plans?
I have coins on my wish list. (86%, 37 Votes)
I plan to give someone a numismatic gift. (23%, 10 Votes)
I am not planning on giving a numismatic gift. (21%, 9 Votes)
I have currency on my wish list. (19%, 8 Votes)
I have exonumia or other numismatics on my wish list. (9%, 4 Votes)
Bah Humbug! (2%, 1 Votes)
I do not have any numismatics on my wish list. (0%, 0 Votes)