4 ms·

It's Time to Kill the $100 Bill

17 points by applecore 11y ago

randomname2 11y ago
The title is incorrect, it says "It's time to kill the $100 bill" rather than "It's time to kill the 500 eur note", in light of yesterday's ECB vote (reported by Handelsblatt) to ban the 500 eur note.
- noja 11y ago
  Did they ever come up with any evidence that the 500 note was misused?
  - celticninja 11y ago
    i think there was a measurement of the number in circulation vs how often they were seen, not super scientific but there certainly are a huge number of them in circulation, with little visibility, although this may just be due to their use being confined to certain areas such as casinos etc, not much point taking one to the local shop for a pint of milk.
- celticninja 11y ago
  i think they are actually saying that banning one without the other would not be worth the hassle.
lmm 11y ago
Killing the €500 note won't make a lot of difference while there's a CHF1000 note in circulation.
kauffj 11y ago
As a citizen of the world, this is a ridiculous idea that I hope never happens. As an entrepreneur, I'm thankful the government continues to create such wonderful market opportunities.
rtpg 11y ago
Kind of funny thinking about optimal counterfeiting targets. Japan has a 500 yen coin (about $4.50 today) with many strong anti-counterfeit properties, so much so that the BOJ has been contracted by other Asian countries to make its coins as well. But 10000 yen notes (roughly $95) are super used in Japan too, so would that become the next target in a non-USD/EUR counterfeit land? Maybe external demand for Yen could trigger yet some more deflation.
nissimk 11y ago
Please change the title as this is about the $100 note. The "Benjamins" make up 76% of the US currency in circulation: http://econbrowser.com/archives/2013/04/who_is_holding http://econbrowser.com/archives/2013/04/who_is_holding Summers can say that this is all about criminals and tax evaders, but everyone should remember that if the government and fed want to impose negative interest rates on individual's savings then they have to eliminate cash or use some other unsavory techniques. This is a first step in that direction.
pingec 11y ago
I really like the 500€ bill when travelling. It`s much easier to sew a 500€ bill to my belt (for emergencies) than five 100 EUR bills. The difference in thickness is substantial.
bcg1 11y ago
People in ivory towers apparently do not understand crime very well. Once the physical density of gold is greater than the physical density of currency, criminals who want to move lots of money at once will simply use gold bars. IIRC, at $3000/oz gold is more dense than $100 bills; if $50 is the maximum denomination this would be closer to $1500; with $20 bills it is already more dense. The motivation behind this flavor of screed is not crime prevention anyhow... it is to reduce the availability of physical cash so that central banks can freely implement negative interest rate policy without risk of people eschewing banks "paying" them negative interest by moving their savings and investments into cash.
- icegreentea 11y ago
  While the density of cash is certainly useful, using cash brings all of the benefits of having your wealth denominated in a state backed currency, instead of a commodity whose prices is more heavily driven by supply and demand. Oh, also how the hell are you going to spend your gold? Black markets and crime must interface with the rest of the world at some point, so you're going to have to change your gold to cash, which is now just a choke point for your operation to get pressured at. There aren't a lot of businesses that take in gold and output money which makes laundering difficult. But you're right. These arguments are almost certainly not primarily motivated by crime prevention.
  - bcg1 11y ago
    I agree with what you're saying, cash has many benefits... I was just diffusing the ridiculous crime argument. As for laundering gold into digital currency, I doubt that would be too difficult for a criminal enterprise to set up. There are actually a TON of business that take gold and output money... refiners, pawn shops, jewelry stores... and let's not forget that HSBC recently had to pay massive fines for laundering drug money - and they are the custodian of the GLD ETF
- randomname2 11y ago
  And not only does it make escaping negative interest rates harder, it also makes escaping "bail-ins" harder.
scotty79 11y ago
> He is surely right that illicit activities are facilitated when a million dollars weighs 2.2 pounds as with the 500 euro note rather than more than 50 pounds as would be the case if the $20 bill was the high denomination note. Do they want for terrorism to get cheaper? Prices are mostly dictated by affluence of the consumer. Terrorists don't require million dollars for given service, they just won't ask for less if that's how much the customer can comfortably provide.
bbarn 11y ago
Cash has become this dirty thing everyone hates in the last decade. Any purchase over a hundred bucks or so a store clerk or normal person seems to have this awkwardness about them in accepting it. It's not uncommon to see people pay for a candy bar with a credit card. I think there was at some point a feeling that it was safer, but with the sheer number of card theft rings via POS systems, shady small merchants, etc., I've taken to trying to always have about 100 USD on me at all times. Also, the article's assertion that cash = terrorism did not surprise me at all. Why is it anything done outside of the all seeing eye must automatically be associated with terrorism?
- dmfdmf 11y ago
  > Why is it anything done outside of the all seeing eye must automatically be associated with terrorism? Never bother to examine a folly, ask what does it accomplish.
- redblacktree 11y ago
  Some folks like to manage their finances with cash as well, see: Dave Ramsey.
clarkmoody 11y ago
The attack on cash is simply the end-game in the state-bank collaboration to control society. Eliminate cash and you can more effectively steal depositors' money through negative interest rates. And you don't need large bills to facilitate large-scale criminal activity, e.g. HSBC[1]. [1] http://www.worldfinance.com/banking/hsbc-sued-for-laundering-cartel-money http://www.worldfinance.com/banking/hsbc-sued-for-laundering...
randomname2 11y ago
The author calls for killing $100 bills, which is 80% of cash in circulation. Which is a theme lately, culminating in yesterday's ECB vote to ban the 500 eur note: - Bloomberg: Bring on the cashless future [1] - FT: The benefits of scrapping cash [2] - Bloomberg: Europol Director Sees Case for Scrapping High-Value Banknotes [3] - Handelsblatt: The death of cash [4] - Norway's Biggest Bank Calls For Country To Stop Using Cash [5] - Spiegel: Leading German Economist Calls For Cash Ban [6] - Bloomberg: Citi Economist Says It's Time to Abolish Cash [7] - Telegraph: Bank Of England Chief Economist Calls For Cash Ban, Urges Negative Rates [8] And from a Morgan Stanley presentation, in which its head of EMEA equity research Huw van Steenis, points out [9]: "What I learned at Davos: We should move quickly to a cashless economy so that we could introduce negative rates well below 1% - policy maker" ..adding: "One of the most surprising comments this year came from a closed session on fintech where I sat next to someone in policy circles who argued that we should move quickly to a cashless economy so that we could introduce negative rates well below 1% – as they were concerned that Larry Summers' secular stagnation was indeed playing out and we would be stuck with negative rates for a decade in Europe. They felt below (1.5)% depositors would start to hoard notes, leading to yet further complexities for monetary policy." [1] http://www.bloombergview.com/articles/2016-01-31/bring-on-th.. http://www.bloombergview.com/articles/2016-01-31/bring-on-th.... [2] http://www.ft.com/intl/cms/s/8ef4dcb0-ca6f-11e5-be0b-b7ece4e.. http://www.ft.com/intl/cms/s/8ef4dcb0-ca6f-11e5-be0b-b7ece4e.... [3] http://www.bloomberg.com/news/articles/2016-02-08/high-value.. http://www.bloomberg.com/news/articles/2016-02-08/high-value.... [4] https://global.handelsblatt.com/edition/354/ressort/finance/.. https://global.handelsblatt.com/edition/354/ressort/finance/.... [5] http://www.ibtimes.com/norways-biggest-bank-calls-country-st.. http://www.ibtimes.com/norways-biggest-bank-calls-country-st.... [6] http://www.spiegel.de/wirtschaft/soziales/bargeld-peter-bofi.. http://www.spiegel.de/wirtschaft/soziales/bargeld-peter-bofi.... [7] http://www.bloomberg.com/news/articles/2015-04-10/citi-econo.. http://www.bloomberg.com/news/articles/2015-04-10/citi-econo.... [8] http://www.telegraph.co.uk/finance/bank-of-england/11874061/.. http://www.telegraph.co.uk/finance/bank-of-england/11874061/.... [9] https://imgur.com/qnEwiha https://imgur.com/qnEwiha
cmsmith 11y ago
Surprise - a central banker[1] wants to have more control over how people use our currency. Summers seems to be discounting the value of large denomination bills as a savings vehicle for ordinary citizens in countries with weak currencies. In addition to improving the life of your average (e.g.) Venezuelan, keeping the US Government associated with financial stability seems to be a cheap and effective way to promote pro-Americanism. My guess would be that the positive value of $100s far outweighs the value of inconveniencing criminals, but if it's the other way around then the proposal might be worth considering. [1] Basically
Grue3 11y ago
Please don't, I hold all my savings in $100 and eur500 bills. The local currency in my country is freefalling so it's the only way to preserve my hard-earned money.
dmfdmf 11y ago
If the govt keeps "printing" credit-money it won't be long before the $100 note replaces the $1 note anyway. I am opposed to this plan but I do support dropping the penny, round all prices to the nearest 5c.
joesmo 11y ago
On the other hand, countries like Austria are affirming the right to purchase items in cash. It's only time to kill the $100 bill if you're ready to give up the last bit of privacy one has left. And really, I expect an actual argument, not: "The fact that — as Sands points out — in certain circles the 500 euro note is known as the “Bin Laden” confirms the arguments against it." I'm just appalled at the stupidity of this meaningless statement. By this reasoning, we should destroy all {insert disliked things here} because in some circles, they are known as {insert negative connotation here}. What a poor article written by an obvious idiot.
- NetStrikeForce 11y ago
  Actually, it was called a Bin Laden in Spain at least because it was difficult to find one. I've also read once that probably 50% of 500€ notes were in Spain, due to the high corruption levels hence all the bribery and untaxed payments. Even the party in government has been caught (actually it is the most corrupt party by far, as far as we know).

17 points by applecore 11y ago

The title is incorrect, it says "It's time to kill the $100 bill" rather than "It's time to kill the 500 eur note", in light of yesterday's ECB vote (reported by Handelsblatt) to ban the 500 eur note.

noja 11y ago
Did they ever come up with any evidence that the 500 note was misused?
- celticninja 11y ago
  i think there was a measurement of the number in circulation vs how often they were seen, not super scientific but there certainly are a huge number of them in circulation, with little visibility, although this may just be due to their use being confined to certain areas such as casinos etc, not much point taking one to the local shop for a pint of milk.
celticninja 11y ago
i think they are actually saying that banning one without the other would not be worth the hassle.

lmm 11y ago

Killing the €500 note won't make a lot of difference while there's a CHF1000 note in circulation.

kauffj 11y ago

As a citizen of the world, this is a ridiculous idea that I hope never happens. As an entrepreneur, I'm thankful the government continues to create such wonderful market opportunities.

rtpg 11y ago

Kind of funny thinking about optimal counterfeiting targets. Japan has a 500 yen coin (about $4.50 today) with many strong anti-counterfeit properties, so much so that the BOJ has been contracted by other Asian countries to make its coins as well. But 10000 yen notes (roughly $95) are super used in Japan too, so would that become the next target in a non-USD/EUR counterfeit land? Maybe external demand for Yen could trigger yet some more deflation.

nissimk 11y ago

Please change the title as this is about the $100 note. The "Benjamins" make up 76% of the US currency in circulation: http://econbrowser.com/archives/2013/04/who_is_holding http://econbrowser.com/archives/2013/04/who_is_holding Summers can say that this is all about criminals and tax evaders, but everyone should remember that if the government and fed want to impose negative interest rates on individual's savings then they have to eliminate cash or use some other unsavory techniques. This is a first step in that direction.

pingec 11y ago

I really like the 500€ bill when travelling. It`s much easier to sew a 500€ bill to my belt (for emergencies) than five 100 EUR bills. The difference in thickness is substantial.

bcg1 11y ago

People in ivory towers apparently do not understand crime very well. Once the physical density of gold is greater than the physical density of currency, criminals who want to move lots of money at once will simply use gold bars. IIRC, at $3000/oz gold is more dense than $100 bills; if $50 is the maximum denomination this would be closer to $1500; with $20 bills it is already more dense. The motivation behind this flavor of screed is not crime prevention anyhow... it is to reduce the availability of physical cash so that central banks can freely implement negative interest rate policy without risk of people eschewing banks "paying" them negative interest by moving their savings and investments into cash.

icegreentea 11y ago
While the density of cash is certainly useful, using cash brings all of the benefits of having your wealth denominated in a state backed currency, instead of a commodity whose prices is more heavily driven by supply and demand. Oh, also how the hell are you going to spend your gold? Black markets and crime must interface with the rest of the world at some point, so you're going to have to change your gold to cash, which is now just a choke point for your operation to get pressured at. There aren't a lot of businesses that take in gold and output money which makes laundering difficult. But you're right. These arguments are almost certainly not primarily motivated by crime prevention.
- bcg1 11y ago
  I agree with what you're saying, cash has many benefits... I was just diffusing the ridiculous crime argument. As for laundering gold into digital currency, I doubt that would be too difficult for a criminal enterprise to set up. There are actually a TON of business that take gold and output money... refiners, pawn shops, jewelry stores... and let's not forget that HSBC recently had to pay massive fines for laundering drug money - and they are the custodian of the GLD ETF
randomname2 11y ago
And not only does it make escaping negative interest rates harder, it also makes escaping "bail-ins" harder.

scotty79 11y ago

> He is surely right that illicit activities are facilitated when a million dollars weighs 2.2 pounds as with the 500 euro note rather than more than 50 pounds as would be the case if the $20 bill was the high denomination note. Do they want for terrorism to get cheaper? Prices are mostly dictated by affluence of the consumer. Terrorists don't require million dollars for given service, they just won't ask for less if that's how much the customer can comfortably provide.

bbarn 11y ago

Cash has become this dirty thing everyone hates in the last decade. Any purchase over a hundred bucks or so a store clerk or normal person seems to have this awkwardness about them in accepting it. It's not uncommon to see people pay for a candy bar with a credit card. I think there was at some point a feeling that it was safer, but with the sheer number of card theft rings via POS systems, shady small merchants, etc., I've taken to trying to always have about 100 USD on me at all times. Also, the article's assertion that cash = terrorism did not surprise me at all. Why is it anything done outside of the all seeing eye must automatically be associated with terrorism?

dmfdmf 11y ago
> Why is it anything done outside of the all seeing eye must automatically be associated with terrorism? Never bother to examine a folly, ask what does it accomplish.
redblacktree 11y ago
Some folks like to manage their finances with cash as well, see: Dave Ramsey.

clarkmoody 11y ago

The attack on cash is simply the end-game in the state-bank collaboration to control society. Eliminate cash and you can more effectively steal depositors' money through negative interest rates. And you don't need large bills to facilitate large-scale criminal activity, e.g. HSBC[1]. [1] http://www.worldfinance.com/banking/hsbc-sued-for-laundering-cartel-money http://www.worldfinance.com/banking/hsbc-sued-for-laundering...

randomname2 11y ago

The author calls for killing $100 bills, which is 80% of cash in circulation. Which is a theme lately, culminating in yesterday's ECB vote to ban the 500 eur note: - Bloomberg: Bring on the cashless future [1] - FT: The benefits of scrapping cash [2] - Bloomberg: Europol Director Sees Case for Scrapping High-Value Banknotes [3] - Handelsblatt: The death of cash [4] - Norway's Biggest Bank Calls For Country To Stop Using Cash [5] - Spiegel: Leading German Economist Calls For Cash Ban [6] - Bloomberg: Citi Economist Says It's Time to Abolish Cash [7] - Telegraph: Bank Of England Chief Economist Calls For Cash Ban, Urges Negative Rates [8] And from a Morgan Stanley presentation, in which its head of EMEA equity research Huw van Steenis, points out [9]: "What I learned at Davos: We should move quickly to a cashless economy so that we could introduce negative rates well below 1% - policy maker" ..adding: "One of the most surprising comments this year came from a closed session on fintech where I sat next to someone in policy circles who argued that we should move quickly to a cashless economy so that we could introduce negative rates well below 1% – as they were concerned that Larry Summers' secular stagnation was indeed playing out and we would be stuck with negative rates for a decade in Europe. They felt below (1.5)% depositors would start to hoard notes, leading to yet further complexities for monetary policy." [1] http://www.bloombergview.com/articles/2016-01-31/bring-on-th.. http://www.bloombergview.com/articles/2016-01-31/bring-on-th.... [2] http://www.ft.com/intl/cms/s/8ef4dcb0-ca6f-11e5-be0b-b7ece4e.. http://www.ft.com/intl/cms/s/8ef4dcb0-ca6f-11e5-be0b-b7ece4e.... [3] http://www.bloomberg.com/news/articles/2016-02-08/high-value.. http://www.bloomberg.com/news/articles/2016-02-08/high-value.... [4] https://global.handelsblatt.com/edition/354/ressort/finance/.. https://global.handelsblatt.com/edition/354/ressort/finance/.... [5] http://www.ibtimes.com/norways-biggest-bank-calls-country-st.. http://www.ibtimes.com/norways-biggest-bank-calls-country-st.... [6] http://www.spiegel.de/wirtschaft/soziales/bargeld-peter-bofi.. http://www.spiegel.de/wirtschaft/soziales/bargeld-peter-bofi.... [7] http://www.bloomberg.com/news/articles/2015-04-10/citi-econo.. http://www.bloomberg.com/news/articles/2015-04-10/citi-econo.... [8] http://www.telegraph.co.uk/finance/bank-of-england/11874061/.. http://www.telegraph.co.uk/finance/bank-of-england/11874061/.... [9] https://imgur.com/qnEwiha https://imgur.com/qnEwiha

cmsmith 11y ago

Surprise - a central banker[1] wants to have more control over how people use our currency. Summers seems to be discounting the value of large denomination bills as a savings vehicle for ordinary citizens in countries with weak currencies. In addition to improving the life of your average (e.g.) Venezuelan, keeping the US Government associated with financial stability seems to be a cheap and effective way to promote pro-Americanism. My guess would be that the positive value of $100s far outweighs the value of inconveniencing criminals, but if it's the other way around then the proposal might be worth considering. [1] Basically

Grue3 11y ago

Please don't, I hold all my savings in $100 and eur500 bills. The local currency in my country is freefalling so it's the only way to preserve my hard-earned money.

dmfdmf 11y ago

If the govt keeps "printing" credit-money it won't be long before the $100 note replaces the $1 note anyway. I am opposed to this plan but I do support dropping the penny, round all prices to the nearest 5c.

joesmo 11y ago

On the other hand, countries like Austria are affirming the right to purchase items in cash. It's only time to kill the $100 bill if you're ready to give up the last bit of privacy one has left. And really, I expect an actual argument, not: "The fact that — as Sands points out — in certain circles the 500 euro note is known as the “Bin Laden” confirms the arguments against it." I'm just appalled at the stupidity of this meaningless statement. By this reasoning, we should destroy all {insert disliked things here} because in some circles, they are known as {insert negative connotation here}. What a poor article written by an obvious idiot.

NetStrikeForce 11y ago
Actually, it was called a Bin Laden in Spain at least because it was difficult to find one. I've also read once that probably 50% of 500€ notes were in Spain, due to the high corruption levels hence all the bribery and untaxed payments. Even the party in government has been caught (actually it is the most corrupt party by far, as far as we know).