Reporting from: Vancouver, Canada
Here in Canada, where the central bank has started printing bills valued at $5 and up on polymer, counterfeit notes are still finding their way into the system. Just last week, mounties in British Columbia announced they’d found a stash of fake bills in circulation. More were discovered elsewhere.
Despite Canada’s confidence that their new fiat notes would all but eliminate counterfeiting, someone forgot to tell the criminals. Part of the problem, experts there surmise, is that all the puffery over the so-called perfection of these new bills caused retailers to let their guard down. They believed that the government had created something so ineffable that they need not worry.
Just like most other times people put their faith in government, they were let down. You gotta love politicians being outsmarted by street criminals.
Down south in The Land of the Free, I’m reminded of a proverb: “the more things change, the more they stay the same”.
148 years ago, on the day of his assassination, Abraham Lincoln created the US Secret Service to crack down on counterfeiters. As a result of the Civil War, one-third to one-half of currency in circulation was counterfeit. Back then, asset-backed currency had real value.
Today, US currency – and fiat currencies worldwide – have nothing backing them. Yet in the Land of the Free, a burgeoning nanny-state and endless war spending have had a similar effect. While only .01% of US dollars in circulation are believed to be counterfeit (this from the same government statisticians who will tell you the economy is rosy), the US has a real currency dilemma. It turns out, American imperialism and Big Government do a far better job of trashing their own currency than any criminal ever could.
While the US Treasury is rolling out its new (three-year delayed) $100 bill, I have to ask. Does it really matter in the grand scheme of things?
That same $100 bill had twenty-five times its value today when Lincoln created the Secret Service to “solve” the problem of counterfeiting. Today, it only buys $79 of what it would just ten years ago. You remember the President then, right?
That ten years ago was after Y2K, after 9/11, after the start of the wars in Afghanistan and Iraq? You don’t have to think back to colonial times to see just how much better the government is at trashing its own currency than criminals.
All the while, the now-former Secretary of Tax Cheating Tim Geithner led a ten-year effort to create the soon-to-be-introduced US $100 bill and, as they always do, claim “this one can’t be counterfeited”. Apparently none of these guys at the Treasury ever watched a movie called Titanic.
It didn’t take long after the last new, impossible-to-counterfeit $100 bill came out for criminals to start putting almost exact copies out on the street either. The government is always one step behind. But they have no one to blame but themselves.
It’s not like we haven’t seen this before. In the 1790s, post-revolutionary France declared a new fiat currency called the assignat as the answer to their monetary crisis. Everyone loved the idea until they realized that the central bank would just keep pressing the “Copy” button over.
And over. And over again.
When they realized the problem they’d created, they responded in typical government fashion: blame the victim and impose harsh restrictions on them. And then bankrupt them.
Later, in the Weimar Republic, the death of the gold mark led to money that soon ended up wallpapering German kitchens and bathrooms. They didn’t learn the lesson.
Today, western governments make a big splash with their latest-and-greatest counterfeit-proof bills. They’ll tell you all about the fancy new inks and how Ben Franklin’s eye practically pop right off the paper.
They’ll tell you THIS is the one that will keep you, your money, and the family dog safe. Just so long as you keep all your faith in the government and its fiat currency.
What they won’t tell you is that their wasteful spending, endless wars, and decimation of economic freedom have blown a hole the size of a torpedo through their currency, where the counterfeiters they can never quite stop have poked a ballpoint pen.