
It's Time to Kill the $100 Bill - applecore
https://www.washingtonpost.com/news/wonk/wp/2016/02/16/its-time-to-kill-the-100-bill/
======
bcg1
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
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
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

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randomname2
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
Did they ever come up with any evidence that the 500 note was misused?

~~~
celticninja
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.

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Grue3
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.

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clarkmoody
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...](http://www.worldfinance.com/banking/hsbc-sued-for-laundering-
cartel-money)

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cmsmith
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

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nissimk
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.

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kauffj
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.

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

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bbarn
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
> 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.

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joesmo
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
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).

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dmfdmf
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.

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pingec
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.

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scotty79
> 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.

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rtpg
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.

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randomname2
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)

