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AZDuffman
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June 26th, 2011 at 7:47:09 PM permalink
Quote: JimMorrison

Against $50 bills also since any gambler knows they are bad luck. I won't touch them.



Really? Never heard that one yet. Is there a reason for that superstition?
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JimMorrison
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June 26th, 2011 at 7:59:22 PM permalink
Quote: AZDuffman

Really? Never heard that one yet. Is there a reason for that superstition?



It's a pretty old superstition, not sure the origins for it. I've heard it ever since I started gambling. You will rarely ever get paid in $50 bills at a cage or casino ATM. My buddy is the head bartender at Playboy Club and almost gave me a $50 in change once, I told him I wouldn't touch it and why and since then he said he's never given a customer a $50 bill unless they requested it. Doyle Brunson said in Super System that he doesn't really believe they are bad luck but why fool with them just in case lol. I subscribe to Doyle's point of view, I don't think they'll really jinx me but why bother with them.
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kenarman
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June 26th, 2011 at 8:31:32 PM permalink
Quote: pacomartin

But you are conditioned that way after decades of ATMs. In Canada and the USA they issue 4 to 5 times as many $20 banknotes as either $10 or $50 banknotes. With Canada revamping their whole line of banknotes to polymer, I wonder if they will try and persuade people to stock the ATM with $50 banknotes?



We already have ATM's with $50 and $100 bills in Canada. If you have 2 ATM's at a bank one will typically only have 20's and the other will have both 20's and 50's. In large banks downtown in a major city or in a casino they will have some ATM's with $100's.
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pacomartin
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June 27th, 2011 at 1:48:26 AM permalink
Quote: kenarman

We already have ATM's with $50 and $100 bills in Canada. If you have 2 ATM's at a bank one will typically only have 20's and the other will have both 20's and 50's. In large banks downtown in a major city or in a casino they will have some ATM's with $100's.



Well, then Canada has already shifted towards larger denominations. I suspect part of the reason for releasing the polymer $50 and $100 almost 2 years before the smaller banknotes, is they are hoping that they will become more popular, and they won't have to print so many $20 banknotes.

From their bank sites, clearly New Zealand has the least use for cash. The tables below is in local currency, and NZ dollar is worth less.

Outside of Australia most countries have heavy reliance on their twenties. The amount of cash in Australia was higher than I expected. Either the culture is more dependent on cash than I know, or some of it is circulating in other countries.

Although the USA is shown as having the most cash per capita, that number is clearly skewed by the amount circulating outside the country. We may be only circulating $1200-$1500 per capita inside the country.

The UK is one of the most cash adverse of the major economies on the planet. And the current amount in circulation has increased by over 30% in the last 3 years, and it is still relatively small.
(2010) Per Capita-> $5$10 $20$50 $100 PerCapita Population Billions notes $ Billions
Australia 6 5 6 22 10 - - $2,210 21.8 1.00 $48
New Zealand 5 4 15 4 3 - - $912 4.3 0.14 $4
Canada 6 3 25 5 8 - - $1,688 34.3 1.62 $58
USA 7 5 21 4 23 - - $2,977 310.2 18.80 $924
Per Capita-> €5 €10 €20 €50 €100 €200 €500 € Billions
Euro 4 6 8 17 5 0.6 1.8 €2,523 332.1 14.17 €840
Per Capita-> £5 £10 £20 £50 £ Billions
Bank of England 4 10 24 3 - - - £801 62.7 2.58 £47

The totals and per capita figures in the table do not include any bills below $5 for USA, and any coins at all. The USA is circulating an additional 10 billion bills in $1 and $2 amount.

The Bank of England actually shows an outstanding amount of £50.2 billion because in addition to the coins, it issues it's own notes that back the issue of the Bank of Scotland, and the Bank of Northern Ireland. These banks are still permitted to issue a small amount of their own notes based on history. The bank of Scotland is actually older than the Bank of England. But they must show up on the account balances of the Bank of England anyway.
pacomartin
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June 27th, 2011 at 2:39:39 AM permalink
Quote: JimMorrison

Personally I'm against any coins so I do not favor going to a dollar coin or anything. Really don't want a ton of change in my pocket. Against $50 bills also since any gambler knows they are bad luck. I won't touch them.

And earlier in the thread there was a bunch of stuff about all the laws that were passed to make it tougher on criminals and how large banknotes helped criminals. That should be irrelevant. Criminals are already breaking the law, we don't need more laws for them to break. Stricter banking laws just harass and make things tougher for non-criminals like me. I think it would be great to have $500 currency and if it makes it easier for drug dealers I don't care.



Timothy Noah in Ban the Benjamins! argues that hundred-dollar bills are for criminals and sociopaths. Why do we still print them?( Dec. 9, 2010 )

With the two major issues of security features on $100 banknotes we have increased their circulation from 1.4 billion to 7.0 billion and still climbing. So the author's idea of getting rid of the note is dumb.

This design of $100 banknotes has been circulating since 25-Mar-96. I would still be surprised if they get the technical production problems worked out to begin distributing the new design in two years. In either case, I don't think there will be another design. Either we will print larger denomination banknotes, or replace the whole process with an electronic one using our cell phones.

Historically we have caught most major criminal organizations via the machinery that must surround the organization. The money laundering, the income tax avoidance, etc. While I would say that it does inconvenience legitimate purposes, it is a necessary trade off. Personally, I think a $1000 bill would be very handy for deflecting thieves. But it isn't worth it considering how much easier it will make it for criminals.


As of May 2011 total currency in circulation is $958.8 billion so we should break a trillion dollars in a few months. That includes $1 and $2 banknotes and coins.

M1 is $1918 bn, which includes on demand deposits.
pacomartin
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June 27th, 2011 at 7:01:01 AM permalink


Hypothetically, the US dollars circulating in Latin America are now almost $200 bn. Canada may find itself in a competitive position with a new polymer $100 banknote this November. Assuming that the new US $100 bill still has production problems and counterfeiting scares continue to build.

If Canada captures 10% of America's overseas market for currency, that would be enough to have a free currency at domestically.
pacomartin
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June 29th, 2011 at 7:14:56 PM permalink
Quote: AZDuffman

I have thought for years we need to revamp our coinage and currency. If I had my way I would:
Kill the penny and the nickel. Items could still be priced to pennies but the total would be rounded at the final checkout/cashout. .



As I said earlier it costs 1.4 cents to make a penny (or 7 cents to make 5 pennies). It costs over 8 cents to make a nickel. So actually nickels are a bigger loss (but we make fewer of them).

I see that Norway just announced that they will do away with the 1/2 krone coin (worth 9 cents). So Norway's smallest coin will be 1 crown worth 18.5 cents. Sweden has already done away with coins smaller than 1 krone. So Sweden's smallest coin is worth 15.5 cents .There is no whining, or talking about it for a decades like the US. Just a 6 month notice and that's that.

Sweden and Norway differ on what is the smallest value acceptable for a banknote. Norway has printed large numbers of coins almost as heavy as a US 50 cent coin. These coins are worth $3.70 apiece with the smallest banknote being worth $9.24.

Sweden still prints a small banknote worth $3.10 and their largest coin is worth $1.55
pacomartin
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February 11th, 2012 at 2:31:00 AM permalink
Quote: FleaStiff

Fiat. Every time I hear that word, I can't help but think of the pronouncing of a sentence of death upon someone accused of witchcraft: "Close the Book, Still the Bell, Quench the Candle. Fiat, Fiat, Fiat." Somehow I don't think that international monetary matters and witchcraft are all that unrelated.



The final numbers are released for the year 2011 for the dollar and the Euro.

2011 Total
Denomination $1 $2 $5 $10 $20 $50 $100
Value (millions) $10,000 $1,800 $12,000 $17,000 $142,000 $70,000 $780,000 $1,032,800
Number (millions) 10,000 900 2,400 1,700 7,100 1,400 7,800 31,300
Denomination € 1 coin € 2 coin € 5 € 10 € 20 € 50 € 100 € 200 € 500
Value (millions) € 6,458 € 9,484 € 7,730 € 20,730 € 57,060 € 302,250 € 165,000 € 36,200 € 299,500 € 904,412
Number (millions) 6,458 4,742 1,546 2,073 2,853 6,045 1,650 181 599 26,147


Production of fiat money is not only increasing, but it is accelerating. The USA finally surpassed a trillion dollars, and the European Central Bank will probably reach a trillion Euro's by next year.

Europe continue to lubricate the operations of criminals & dictators around the world by circulating €300 billion in €500 banknotes for a population of just over 300 million.

The catastrophe in the production of the new color $100 banknote continues unabated with the Bureau of Engraving and Printing refusing to release any production figures since July of 2011. With nearly 8 billion $100 notes circulating around the world, the replacement problem will only get harder.

USA is up to 10 billion $1 banknotes (roughly 75 per household), while the vaults of the mint are busting out with thousands of tons of undistributed $1 coins. Every major country has replaced these small banknotes with coins decades ago.

There is surprisingly almost a billion $2 banknotes in circulation. The BEP will continue to print them as long as people hoard them. It's pure profit for the Treasury.

The $50 banknote remains unpopular with 1.4 billion notes in circulation, while the €50 banknote is widely used in European ATMs.
P90
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February 11th, 2012 at 3:55:18 AM permalink
Quote: pacomartin

Timothy Noah in Ban the Benjamins! argues that hundred-dollar bills are for criminals and sociopaths. Why do we still print them?( Dec. 9, 2010 )


The process of cashing in will sure look a lot more opulent if that's done.


Quote: pacomartin

Either we will print larger denomination banknotes, or replace the whole process with an electronic one using our cell phones.


An estimated 6 million cell phones are stolen per year in US, probably a lowball number, since most people I know had a phone stole from them or lost (and most likely stolen later). I wonder if the figure will hit 100-300 mil, or remain at a modest 30-60 million in such an economy?
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pacomartin
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February 11th, 2012 at 8:13:11 AM permalink
Quote: P90

The process of cashing in will sure look a lot more opulent if that's done.

An estimated 6 million cell phones are stolen per year in US, probably a lowball number, since most people I know had a phone stole from them or lost (and most likely stolen later). I wonder if the figure will hit 100-300 mil, or remain at a modest 30-60 million in such an economy?



I don't think that the US will Ban the Benjamin. If the circulating supply of Benjamins hits 10 billion, there will be even more pressure to bring back larger denomination notes. I don't think that is a good thing, but it is a very profitable business for the government.


Most routine transactions with established merchants can be done with variations of debit and credit cards. If you are dealing with another individual who you don't know (and sometimes even if you do know them) and buying an old car, furniture, etc. the only real option is banknotes. The cell phone transaction with enough security measures would substitute for a stack of Benjamins. I don't see any reason why this would increase theft of cell phones.

As cell phones get more and more expensive and like mini-computers, I think biometrics will become more commonplace.
P90
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February 11th, 2012 at 8:30:06 AM permalink
Quote: pacomartin

The cell phone transaction with enough security measures would substitute for a stack of Benjamins. I don't see any reason why this would increase theft of cell phones.


Currently a stolen cell phone doesn't have a lot of residual value. If it's a regular phone, you'll be selling them as burners in bulk, for maybe $50 a dozen, considering that some will be disabled already and that the fence has to make a profit. Then there is a gap between a phone that's only worth its calling ability, and a phone that's worth anything for its hardware. Smartphones and luxury models are the only ones to cross that gap, because of the cost of updating IMEI and fixing carrier-lock if present.

Using them for cash transactions changes everything. No longer do you have to use special equipment and a skilled hacker to make the phone saleable and then move it. You aren't after the hardware anymore, you're after the cash. A stolen smartphone is worth maybe $200 if it's a new model. How much money will you have in your phone-linked account if it becomes the main form of payment?
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pacomartin
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February 11th, 2012 at 8:52:41 AM permalink
Quote: P90

Using them for cash transactions changes everything. No longer do you have to use special equipment and a skilled hacker to make the phone saleable and then move it. You aren't after the hardware anymore, you're after the cash. A stolen smartphone is worth maybe $200 if it's a new model. How much money will you have in your phone-linked account if it becomes the main form of payment?



What you are describing seems stupid, but from this Forbes article (and accompanying video) it seems that is exactly what the developers did with Google Wallet.

Google Wallet Security Hole describes an easy way to extract cash downloaded to a stolen device. Pretty big mistake on Google's part.
P90
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February 11th, 2012 at 10:42:31 AM permalink
Well, credit cards were supposed to be secure. Now we know better.
Any device used for cash transactions is a potential security risk. The difference is how severe. Cash and credit cards are in your wallet, which people know to try and keep secure. Computers are vulnerable to trojans, but a hacker has to operate remotely, akin to doing laparoscopic surgery. A smartphone has all the vulnerabilities of a computer, but is easily lost and stolen, and a hacker has full physical access to it.

However the holes are plugged, one security hole is always the user. If you have to pay at every parking, you want to do it quickly. That means you aren't going to keep layers of security that delay your access. If the average account size is sufficient to justify hacking, a cell phone used for payments will always be an open wallet.
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98Clubs
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February 11th, 2012 at 12:37:38 PM permalink
Gold Standard for money? At a range of $300 in say 2003-4 with a good economy and $1750 now, don't bet on it unless:
1.) The buillon reserve is officially priced at $500 for denominations of $50 and $100, and $500 (note the new denom.)
2.) A silver standard for lower denominations is also approved at $10 for $20's $10's, and $5's.
3.) ALL FEDERAL RESERVE NOTES RECALLED, and have no value after a recall date. (Without this step the transition is fiat)
4.) Replace the $1 bill with a $1 coin for longevity purpose. Size of new $1 coin 32mm... Theo. Rooseveldt on front, buffalo on back

Yeahhh that ain't happening real soon
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pacomartin
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February 11th, 2012 at 1:43:58 PM permalink
Quote: 98Clubs

Replace the $1 bill with a $1 coin for longevity purpose. Size of new $1 coin 32mm... Theo. Rooseveldt on front, buffalo on back



Where did you get that spec from? The US dollar coin has the same diameter as the Canadian coin, it's just a little thicker and heavier. The spec can't be changed now.

Eisenhower dollar: 38.1 mm by 2.58 mm weight 22.68 g (20 to the pound)
Sacagawea dollar: 26.5 mm by 2.00 mm weight 8.100 g {also Susan B Anthony, and Presidential dollar coins}

Canadian dollar: 26.5 mm by 1.75 mm weight 7 g
Canadian 2 dollar: 28 mm by 1.80 mm weight 7.3 g
pacomartin
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May 24th, 2012 at 8:52:44 PM permalink
The mechanics of the re-introduction of the drachma will probably be a nightmare. Clearly no one in Greece will willingly exchange any Euro coins or banknotes for drachma notes.

The reality is that all the bank accounts and payroll will have to be "automatically" converted from Euros to drachmas. Then they will await the coming devaluation.
Tourists will be given discounts to pay in Euros, which will be deposited if necessary, and stored if not.

Is it possible that the new drachma will be an electronic currency only?
odiousgambit
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May 25th, 2012 at 12:15:49 AM permalink
Quote: pacomartin

no one in Greece will willingly exchange any Euro coins or banknotes for drachma notes.



Who is going to leave their money in a Greek bank when this is generally realized? I had heard there have been runs on Greek banks but thought it was for the usual reasons.
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pacomartin
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May 25th, 2012 at 6:07:18 AM permalink
Quote: odiousgambit

Who is going to leave their money in a Greek bank when this is generally realized? I had heard there have been runs on Greek banks but thought it was for the usual reasons.


It is generally believed that Greece will introduce currency controls.

I don't think anyone has ever replaced a "more valuable" with a "less valuable" currency.
AZDuffman
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May 25th, 2012 at 6:45:33 AM permalink
Quote: pacomartin

It is generally believed that Greece will introduce currency controls.

I don't think anyone has ever replaced a "more valuable" with a "less valuable" currency.



Replace, no, but they intentionally weaken the current currency all of the time. Argentina was famous for this when the left an essentially-dollarized system and let their currency sharply devalue. Upshot is your exports become very competitive. Downside is very bad inflation and you have to actually export to get a "good" currency to buy your imports.
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pacomartin
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May 25th, 2012 at 7:13:51 AM permalink
Quote: AZDuffman

Replace, no, but they intentionally weaken the current currency all of the time.



Devaluing a currency is like giving all you employees a cut in pay, without having to negotiate with hundreds of unions. If you have 20,000 Euros in the bank, and suddenly they become 20,000 "new drachmas" then you know that it is just a matter of time until "new drachmas' become 30% less than euros. People must be going crazy trying to convert their bank accounts into banknotes to protect the value.
Nareed
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May 25th, 2012 at 7:15:06 AM permalink
Quote: pacomartin

I don't think anyone has ever replaced a "more valuable" with a "less valuable" currency.



How about all the countries, which means just about all the countries, that replaced gold with paper?
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pacomartin
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May 25th, 2012 at 7:33:41 AM permalink
Quote: Nareed

How about all the countries, which means just about all the countries, that replaced gold with paper?


I don't think gold was ever used for routine purchases. It was too valuable. Most often, the paper currency was exchangeable for it's equivalent value in silver. The Bank of England (established 1694) began issuing paper currency denominated in a pound sterling. Today a pound of silver costs £214.5 , so we can easily measure the loss in the value of the paper currency in the last 318 years. It is worth 1/214.5 of what it used to be worth.

The contagion may spread throughout all the Mediterranean countries, as people convert electronic money into hard banknotes out of fear that the lira and the peseta will be revived.
Nareed
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May 25th, 2012 at 7:37:27 AM permalink
Quote: pacomartin

I don't think gold was ever used for routine purchases.



Gold and silver coins were in use well into the XX Century.
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