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Supernotes: A New Generation of Counterfeit Money
Las Vegas Now ^ | Nov 3, 2006 | George Knapp

Posted on 11/03/2006 10:31:30 AM PST by KeyLargo

George Knapp, Investigative Reporter Supernotes: A New Generation of Counterfeit Money

Nov 3, 2006 09:31 AM

Las Vegas casinos have always been a target for counterfeiters who think they can slip a few homemade bills into the mix and no one will notice. Most of the bills are detected. But not anymore.

A new generation of so-called "supernotes" has been slipping past the most advanced detection systems. That's because the alleged counterfeiter is a foreign government.

It can be argued that any government that counterfeits the currency of another nation has committed an act of war. In the case of the supernotes, the prime suspect is North Korea, which is also believed to be engaged in other criminal acts, including large-scale methamphetamine production, not to mention its brazen nuclear weapons program.

The fact that not even Las Vegas casinos can spot the phony money is proof enough that these counterfeits are as good as the real deal.

Satellite photos can't tell us what goes on inside a non-descript building in the North Korean capital of Pyongyang, but it's believed that the so-called "Office 39" is the hub of a counterfeiting operation that produces an estimated $100 million a year in bogus American currency. In particular, $100 bills that are so perfect they've been dubbed "supernotes."

The bills have been circulating internationally for more than a decade and have helped to prop up North Korea's rogue government, including its nuclear weapons program. The U.S. Secret Service has nabbed close to $50 million worth of supernotes, which are distributed through compliant banks in Macau by North Korean diplomats, Asian crime lords, even Islamic terrorists. It was probably inevitable the supernotes would end up on the streets of Las Vegas.

Paul Masto, acting director of the Las Vegas office of the Secret Service, said, "There's so much money in play, it stands to reason the counterfeiters come to town and figure they're going to blend in."

The United States Secret Service's History of Counterfeiting

Masto can't talk about supernotes. He can't even use the term. The situation with North Korea is so volatile that officials in Washington have told the Secret Service to refrain from further comment. Masto can only speak about it in generalities.

"We believe it is state-sponsored. We have an ongoing investigation for several years now. It poses extra problems for us because the grade and quality is so good and it goes through the initial steps of detection," he continued.

Masto can't say how many of the supernotes have been found here, but it's more than anywhere else in the U.S. Las Vegas always ranks at or near the top of cities where counterfeiters pass their phony bills. The Secret Service here receives up to $70,000 per week in funny money.

Each of the phony bills gets catalogued and packed in an evidence vault. All of the bills that arrive here were passed somewhere -- through a casino or business -- even though a lot of the counterfeits are very low quality. The Secret Service holds regular seminars to teach locals how to spot funny money, which makes Las Vegas one of the toughest places anywhere to pass a counterfeit.

But supernotes are different. Casinos the I-Team contacted don't want to talk about it on the record, but industry sources say the bill validators used in most gaming machines do not catch the supernotes. Masto acknowledges that most aren't spotted until they get to the Federal Reserve, which has advanced equipment.

For anyone but the government, it's pretty much impossible to tell the difference, even under magnification. The security strips and watermarks are the same and the paper is the same. The counterfeiter even used the same high-tech press that our government uses.

Megan Ross, U.S. Secret Service employee, said, "If I was at a bank and put it under a UV light and looked rather quickly at it, I would assume that's genuine."

In some ways, the supernotes are even better than the real thing. For instance, on the back of the bill the hands on the clock of Independence Hall are sharper than on a genuine one hundred dollar bill.

More than 170 people have been arrested worldwide for distributing the supernotes, including one suspect busted in Las Vegas last year. Defectors from North Korea have described the counterfeiting operation in general terms, but no one knows for sure how many of these sublime fakes are out there in circulation. If you turn one in and it turns out to be phony, you eat it unless it can be traced to the source.

Paul Masto said, "The high quality notes, it's more difficult to go back and find out who passed it."

Next year, the Bureau of Engraving and Printing will issue a brand new version of the $100 bill. It will mean the counterfeiters will have to spend hundreds of millions of dollars for new high-tech presses.

One other note, about 10-percent of the bills sent to the Secret Service in Las Vegas as possible counterfeits turn out to be genuine. They are returned to the person who sent them in.

The Secret Service field offices hold many seminars for locals on how to spot phony money.

Visit the Secret Service's "How to Detect Counterfeit Money" Web page to learn about some telltale signs.

Send your comments to Investigative Reporter George Knapp at gknapp@klastv.com


TOPICS: Crime/Corruption; Foreign Affairs; Government; News/Current Events
KEYWORDS: counterfeiting; currency; northkorea; superdollars; supernotes
"The bills have been circulating internationally for more than a decade and have helped to prop up North Korea's rogue government, including its nuclear weapons program."

Gee, in circulation for more than a decade. Who could have been U.S. president back then?

1 posted on 11/03/2006 10:31:31 AM PST by KeyLargo
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To: KeyLargo

Paper money should have a barcode of the serial number in place so it can be scanned just like lottery tickets. The computer could verify that S/N and whether it has been used outside a certain radius within a too short period of time. Also it could tell if the note has been used more than what would be expected in a normal day...........


2 posted on 11/03/2006 10:35:36 AM PST by Red Badger (ECCLESIASTES 10 The heart of the wise inclines to the RIGHT, but the heart of the fool to the LEFT.)
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To: KeyLargo

This means these aren't the new anti-counterfeiting bills.

Unfortunately, we have a ways to go before we can retire the old bills....


3 posted on 11/03/2006 10:44:59 AM PST by CharlesWayneCT
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To: KeyLargo

And he didn't care.


4 posted on 11/03/2006 10:45:40 AM PST by Eric in the Ozarks (BTUs are my Beat.)
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To: Red Badger
It also could be used to track who spent the money. The #1 reason to use cash instead of check or credit card is for anonymity. Tracking bills as you describe would effectively kill the need for any paper money at all.

There's your cheaper solution. Make the highest denomination bill the Twenty.
5 posted on 11/03/2006 10:47:08 AM PST by Yo-Yo (USAF, TAC, 12th AF, 366 TFW, 366 MG, 366 CRS, Mtn Home AFB, 1978-81)
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To: KeyLargo

It is remarkable that North Korea, a relatively unsophisticated country, and generally not that advanced technologically, should have developed counterfeit currency that almost always evades detection. In most areas outside the US, probably more counterfeit US currency is circulating, in larger denominations, than genuine currency within the US. This may be enough to affect our rate of exchange negatively on a worldwide basis.

Nazi Germany used a similar tactic during the Second World War, but they made an error when they distributed the notes by air drop over England.

The Germans copied the 10-pound note quite precisely, with engravings that so closely duplicated the originals so exactly they could not be detected under a microscope. They even duplicated the exact same paper, using the linen content, and the porosity, and the feel of the paper.

But the notes never really looked right. Because the rag content of the paper, used by the English, was simply the old dirty cloth, and the notes looked a little darker and less crisp. Germans being Germans, they laundered the rag content FIRST, resulting in a brighter, and somewhat more crisp, printed bill. Compared to a genuine note, the counterfeits were obvious.

The Germans never caught on.


6 posted on 11/03/2006 10:54:26 AM PST by alloysteel (Facts do not cease to exist, just because they are ignored. - Aldous Huxley)
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To: Red Badger

Great! Then the government can keep track of every dollar we spend, along with our web surfing, driving, telelphone calls, email and medical records.

I feel so much safer already!


7 posted on 11/03/2006 10:54:45 AM PST by Jack Black
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To: Jack Black

No personal info is encoded in the bill's s/n. It has no idea what it's being spent on, or by who. The same procedures are used by your creditcard company every minute of everyday and THEY DO HAVE THAT INFO!..........


8 posted on 11/03/2006 10:57:21 AM PST by Red Badger (ECCLESIASTES 10 The heart of the wise inclines to the RIGHT, but the heart of the fool to the LEFT.)
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To: Yo-Yo
There's your cheaper solution. Make the highest denomination bill the Twenty.

Another great idea! Make cash so bulky and inconvenient that no one uses it. Lets see, in my grandfathers day $500 adn $1000 dollar bills circulated freely.

Given the rate of inflation that $1000 bill from 1920 would need to be a $10,000 bill today to have equivelent purchasing power.

Or to reverse the calculation, if we had implemented your plan in 1920 the $2 bill would have been the biggest denomination at the time.

I think this is a good analogy for the downward trend of our culture. If anyone had suggested that the government print $2 bills, or even $10 bills (the equivelent of todays $100 bill) they would have been laughed at.

Oh well time to go stand in line and present my government issued ID for a formerly anonymous service.

Home of the FREE. My ass.

9 posted on 11/03/2006 11:02:24 AM PST by Jack Black
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To: alloysteel

Interesting about the Germans - learn something new every day. Actually I learned two things - that when it SAYS "rag" content it MEANS rag content!


10 posted on 11/03/2006 11:02:31 AM PST by geopyg (If the carrot doesn't work, use the stick. Don't wish for peace, pray for Victory.)
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To: Red Badger

True, but you take money out of an ATM and it is certainly possible that the records are retainied. If all cash registers used the scanners it would be trivial to track individual bills.


11 posted on 11/03/2006 11:04:51 AM PST by Jack Black
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To: KeyLargo
Satellite photos can't tell us what goes on inside a non-descript building in the North Korean capital of Pyongyang, but it's believed that the so-called "Office 39" is the hub of a counterfeiting operation that produces an estimated $100 million a year in bogus American currency.

If I were the President, I'd pull out all the stops to find out for sure if this was the use, and if so I'd make sure that the entire building was destroyed completely and suddenly, and I'd order it done when it was as full as possible so as to eliminate the counterfeitting expertise along with the plates and machines. Any complaints would be answered with "it was a defensive action, and we'll do it again to either North Korea or ANY other nation which counterfeits our currency."

12 posted on 11/03/2006 11:07:33 AM PST by Ancesthntr
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To: Jack Black

I haven't used an ATM in nearly 10 years...........


13 posted on 11/03/2006 11:08:21 AM PST by Red Badger (ECCLESIASTES 10 The heart of the wise inclines to the RIGHT, but the heart of the fool to the LEFT.)
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To: Jack Black

Plus, only the larger bills need to be verified, $20,$50,$100. They are the ones most counterfeiters cherish. And also, the transactions themselves need not be kept track of only the bill being used at place date and time. If the same s/n is used 2 minutes later 10 miles away, then BINGO! you have a winner!............


14 posted on 11/03/2006 11:12:25 AM PST by Red Badger (ECCLESIASTES 10 The heart of the wise inclines to the RIGHT, but the heart of the fool to the LEFT.)
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To: KeyLargo

If we had stuck to the Constitution's requirement that only gold & silver could be money, counterfeiting would not be a big problem.


15 posted on 11/03/2006 11:16:16 AM PST by John Semmens
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To: Jack Black
Back off, Jack. I was arguing against barcoding our money.

Sheesh.

16 posted on 11/03/2006 11:22:06 AM PST by Yo-Yo (USAF, TAC, 12th AF, 366 TFW, 366 MG, 366 CRS, Mtn Home AFB, 1978-81)
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To: alloysteel

The United States gave the Shah of Iran the same printing press used to print $100 bills.

Ecconomic warfare is the same as armed warfare. This is just another front.


17 posted on 11/03/2006 11:28:20 AM PST by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: Red Badger
"Paper money should have a barcode of the serial number in place so it can be scanned just like lottery tickets."

Bite your tongue! You want the Gov't to track every little purchase you make with cash?!?!?!

Just use your credit card if your that worried. I like using cash whenever possible and don't need some Gov't thug storing that data for some future confiscation or persecution.
18 posted on 11/03/2006 11:30:28 AM PST by MaDeuce (Do it to them, before they do it to you! (MaDuce = M2HB .50 BMG))
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To: MaDuce

Read on for subsequent posts and explanations..........


19 posted on 11/03/2006 11:32:47 AM PST by Red Badger (ECCLESIASTES 10 The heart of the wise inclines to the RIGHT, but the heart of the fool to the LEFT.)
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To: Yo-Yo
It also could be used to track who spent the money. The #1 reason to use cash instead of check or credit card is for anonymity. Tracking bills as you describe would effectively kill the need for any paper money at all.

With this type thinking you will be happier at DU. Conservatives don't think your every move should be tracked by big brother.

20 posted on 11/03/2006 11:35:18 AM PST by TWfromTEXAS (We are at war - Man up or Shut up.)
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To: Yo-Yo

Don't tell me, let me guess, you're heavily invested in bags and cargo pants, right?


21 posted on 11/03/2006 11:35:31 AM PST by Old Professer (The critic writes with rapier pen, dips it twice, and writes again.)
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To: John Semmens
If we had stuck to the Constitution's requirement that only gold & silver could be money, counterfeiting would not be a big problem.

That was only a limitation on the states, not the federal government.

22 posted on 11/03/2006 11:39:13 AM PST by Dog Gone
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To: John Semmens
All of the gold ever mined is valued at $3 Trillon as of April 2006.

There isn't enough gold and silver in the world to go back to the gold standard. That was true in the 1920's when we were taken off the gold standard.

23 posted on 11/03/2006 11:45:50 AM PST by Yo-Yo (USAF, TAC, 12th AF, 366 TFW, 366 MG, 366 CRS, Mtn Home AFB, 1978-81)
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To: Old Professer
Bags and cargo pants?

No, I normally cash my paycheck each month and pay cash for my mortgage, car payment, insurance payments, utility bills, etc.

I wish they'd bring back these babies:


24 posted on 11/03/2006 11:51:01 AM PST by Yo-Yo (USAF, TAC, 12th AF, 366 TFW, 366 MG, 366 CRS, Mtn Home AFB, 1978-81)
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To: MaDuce
[ don't need some Gov't thug storing that data for some future confiscation or persecution. ]

Rinos and Democrats don't believe the federal government HAS THUGS,,,

25 posted on 11/03/2006 11:57:23 AM PST by hosepipe (CAUTION: This propaganda is laced with hyperbole.)
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To: TWfromTEXAS

Please read my post again. I was pointing out the drawbacks to tracking money.


26 posted on 11/03/2006 12:00:36 PM PST by Yo-Yo (USAF, TAC, 12th AF, 366 TFW, 366 MG, 366 CRS, Mtn Home AFB, 1978-81)
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To: Jack Black
 I think this is a good analogy for the downward trend of our culture. If anyone had suggested that the government print $2 bills, or even $10 bills (the equivelent of todays $100 bill) they would have been laughed at.

Nicely said and more importantly, true.

27 posted on 11/03/2006 1:25:59 PM PST by zeugma (I reject your reality and substitute my own in its place. (http://www.zprc.org/))
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To: Yo-Yo
You wrote: "All of the gold ever mined is valued at $3 Trillon as of April 2006. There isn't enough gold and silver in the world to go back to the gold standard. That was true in the 1920's when we were taken off the gold standard." I don't see the connection. We could establish the standard as whatever we want. We clearly can't do $20 an oz. Any I assume your $3 Trillion is based on the $600 average price lately. To set the new price for gold we could take what ever amount of new money we felt we needed (and it would be a good time to retire a lot of debt by not making it convertable).

According to this chart M1 is about $1 Trillion. M0, which is what we really need is even less. Call it $500 Billion. (total SWAG). There are 147 million ozs of gold in Ft. Knox (according to the first site on the google seach - again this is back of the envelope stuff) 500,000,000,000 dollars divied by 147,000,000 = a gold price of $3,400 an oz. So one dollar in the NewGold exchange rate would equal 1/3000 th of an oz. That's too little to coin, but so what.

28 posted on 11/03/2006 10:08:34 PM PST by Jack Black
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To: Yo-Yo

Sorry. I got carried away and didn't read clearly. My apologies. The election has me extra tense. Hope it's over soon.


29 posted on 11/03/2006 10:10:32 PM PST by Jack Black
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To: Red Badger

Cool.


30 posted on 11/03/2006 10:11:01 PM PST by Jack Black
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To: Yo-Yo
I wish they'd bring back these babies:

Minga, that thing doesn't even have an overlay over the green seal! That's the only way to see that 95% of the paper money is actually fake.

31 posted on 11/03/2006 10:23:56 PM PST by Dosa26
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To: KeyLargo
One of the ways to find counterfeit money is the serial number. It is cheaper to print the same serial number on the note than to change each note. High end color copiers can detect and will not copy several nations bank notes. The fastest high end detection equipment that I worked with has been made in Germany and Japan.
32 posted on 11/03/2006 10:30:59 PM PST by ThomasThomas (Red is good)
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To: Yo-Yo

Note the disclaimer or whatever on the bill.

"This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States treasury or any Federal Reserve bank"

I have a fifty from the early 1950's that says the same. And actually, that law is still on the books, I think it's USC Title 12 somewhere.

But the only "lawful" money anymore is Federal Reserve notes, so it's a nullity.


33 posted on 11/03/2006 10:36:39 PM PST by djf (I'm not ISLAMOPHOBIC, just BOMBOPHOBIC!! Whether that's the same is up to Islam!!!)
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To: ThomasThomas
One of the ways to find counterfeit money is the serial number

OK...How bout this...On the face on the righthand side the green "star seal" is overlaid by the black denomanation printed. Color copiers pixilate the overlay where the green meets the black and you end up with pixels either black, green, or background when they should be black/green or some combo. In my area 95% of all paper is some grade of counterfiet...ABCDE.

34 posted on 11/03/2006 10:54:00 PM PST by Dosa26
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To: ThomasThomas

You sound like you are some-what knowledgable in this feild. 95% of the paper money in WNY is fake. Is there anything I should do about it? It all passes but it's all made on color copiers of varying quality. I think the treasury MUST know about it by now...it's been going on for at least 6 years since I noticed it and I'm just an idiot. I don't even bother telling people about it since no one cares.


35 posted on 11/03/2006 11:19:14 PM PST by Dosa26
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To: Dosa26

Oh this is the first time I've mentioned this in open forum...I hope I don't dissapear, but if I do so be it. I stand by my statements. 95% of the WNY money is printed on color copiers.


36 posted on 11/03/2006 11:34:15 PM PST by Dosa26
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To: Dosa26
I worked on counterfeit detection equipment a few years back. The best counterfeits even banks don't have the equipment to detect, only the feds. So the best thing an individual can do not to get stuck with them is to know the real stuff. what money feels like and what it looks like. When I was working around cash much of the counterfeits were found this way. They might even not know whats wrong at first just it wasn't right. I don't use cash very much and never have any bill larger that a twenty. This party because being around cash I knew how disgustingly dirty it is.
37 posted on 11/03/2006 11:49:43 PM PST by ThomasThomas (Red is good)
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To: ThomasThomas
The best counterfeits even banks don't have the equipment to detect, only the feds.

This is what I'm talkin bout...We don't make money on color copiers in this country correct? 95% of the paper that is passed is made on copiers in WNY. The tell is very specific and very idendtifiable. On the grean seal on the righthand side of the face the star with the printed denomanation the black and green pixilate on a copier as opposed to dies. 95% false! What am I suppossed to do? The treasury must know by now. It passes, but it bothers me. I should probably just shut up.

38 posted on 11/04/2006 12:03:24 AM PST by Dosa26
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To: KeyLargo

After the cease fire in Lebanon. Hezbollah was passing out wads of 100 dollar bills to the residents. I wonder where they came from.


39 posted on 11/04/2006 12:11:50 AM PST by dancusa (For liberals there is no end to their rights and no beginning to their responsibilities.)
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To: KeyLargo

If U.S. notes were printed on paper made from food, North Korea wouldn't be able to produce them. ;-D


40 posted on 11/04/2006 12:17:23 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: ThomasThomas
On the green seal on the righthand side of the face the star with the printed denomanation the black and green pixilate where they overlap on a copier

You know the area I'm talking about right? On what I refer to as class E counters I can see the pixalation from arms length. The class A's I have to hold the bill 5 inches from my eye. I have a one dollar bill I save because it is "probably" real...just as a keepsake.

41 posted on 11/04/2006 12:25:28 AM PST by Dosa26
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To: Jack Black
We could establish the standard as whatever we want. We clearly can't do $20 an oz.

Just slapping whopping big values on gold and silver would make all our electronic equipment pretty darn expensive, seeing as how we use things like gold and silver to make these products.

Perhaps we should just go back to the ancient cocao bean monetary system.

42 posted on 11/04/2006 12:27:36 AM PST by piasa (Attitude Adjustments Offered Here Free of Charge)
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To: alloysteel
probably more counterfeit US currency is circulating, in larger denominations, than genuine currency within the US. This may be enough to affect our rate of exchange negatively on a worldwide basis.

Not really. Even though 60% of all US currency ($300B) circulates outside the US, it is dwarfed by foreign exchange held electronically and in other securities, like Treasury Bonds ($1.5T alone).
43 posted on 11/04/2006 12:33:10 AM PST by UnbelievingScumOnTheOtherSide (Give Them Liberty Or Give Them Death! - IT'S ISLAM, STUPID! - Islam Delenda Est! - Rumble thee forth)
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To: piasa
Perhaps we should just go back to the ancient cocao bean monetary system.

Nah...It'll just be chips for everyone. All electronic. First with the criminals then with the welfare, finally with everyone else. It's the only way since people refuse to look closely at currency.

44 posted on 11/04/2006 12:49:56 AM PST by Dosa26
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To: Jack Black
So what do you wish to do, start a new gold standard where one dollar is 1/3000th of an ounce? Then when we need more money to support a population of 350 million people, we make a dollar 1/4000th of an ounce?

The whole point of the $35 an ounce gold standard was that the amount of gold that a dollar represented never floated, it was always fixed over time, and the paper note was always redeemable for real gold.

The reason we're off the gold standard was during the Depression FDR made it illegal for US Citizens to own gold, other than jewelery. He stopped the minting of gold coins, and ended the private redemption of paper notes for gold or silver.

We still maintained the $35 an ounce gold exchange with foreign governments, but in the early 70's there was a run on our gold reserves by Great Britian and others who wanted to exchange their dollars for gold. There simply wasn't enough gold in Fort Knox to cover all the foreign held notes, so Nixon ended the foreign exchange of gold, putting us on a fiat currency.

If the amount of gold that a dollar represented were allowed to float, and were not convertable in the manner you assume, the dollar remains a fiat currency and the "gold standard" as you describe would be a myth.

45 posted on 11/05/2006 10:53:17 AM PST by Yo-Yo (USAF, TAC, 12th AF, 366 TFW, 366 MG, 366 CRS, Mtn Home AFB, 1978-81)
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To: Yo-Yo

Sorry you misunderstood my suggestion. Actually a "floating gold standard" exists to some extent because the abilty to buy , hold and sell gold is again allowed in the USA. And there are multiple electronic gold exchanges for electronic digital gold, like e-Gold.

My suggestion was simply to point out that there *IS* enough gold to go back on the gold standard, it's just a matter of picking the fix. I would not advocate allowing it to float, once it was set. That as you point out doesn't accomplish the goal.


46 posted on 11/05/2006 11:01:38 AM PST by Jack Black
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To: Jack Black
In theory, a single ounce of gold is enough to establish a "gold standard" currency.

What you would propose is that once the amount of gold behind each dollar is fixed, it must forever remain so. So in the future as our economy expands, we would have to either acquire more hard gold from other sources, or not grow the money supply, which is a sure-fire recipe for disaster.

Since the rest of the world would not be on the same gold standard, if the price of gold went up, foreign governments and individuals could present paper dollars to our treasury for redemption in gold. We would either have to take even more dollars out of circulation, or else find more gold from somewhere else. (If you couldn't redeem paper notes for gold upon demand, then the whole concept of a "gold standard" becomes a sham.)

There is not a single major currency in the world that isn't a fiat currency. Returning to a gold standard for the United States is a sure fire recipe to destroy not only our own economy, but send the entire world into another depression that would make 1929 look like a good year.

47 posted on 11/06/2006 9:01:23 AM PST by Yo-Yo (USAF, TAC, 12th AF, 366 TFW, 366 MG, 366 CRS, Mtn Home AFB, 1978-81)
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