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Old 12-19-2019, 09:46 AM
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Recalling US currency


Suppose the US really wanted to hurt the "drug lords" and other wealthy undesirables. Could they announce a recall ("demonetisation") of all $100 bills and replace them with new ones - making the old ones worthless after a certain (e.g. one year) date? 80% of US $100's circulate outside the US.

India did something similar (for the same reason) with its high-denomination notes a couple of years ago - but 99.3% of the notes were exchanged within the 50-day deadline (they had predicted only an 80% return) - but that 0.07% that were not exchanged was worth $2 billion. But overall - the process was considered a failure. For the article - $1 US = 68 rupees. "Crore" is 10 million; "lakh" is 10 thousand.

https://en.wikipedia.org/wiki/2016_I...demonetisation

I can''t see that high a percentage of US $100's being exchanged - so wouldn't this be a money-maker for the government - and hurt the illegal drug business? You limit the amount that can be exchanged at one time; take ID info from the exchanger; and question those who exchange the max multiple times.
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Old 12-19-2019, 10:15 AM
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I can''t see that high a percentage of US $100's being exchanged - so wouldn't this be a money-maker for the government - and hurt the illegal drug business? You limit the amount that can be exchanged at one time; take ID info from the exchanger; and question those who exchange the max multiple times.
Why wouldnít a majority of C notes be exchanged? Lots of people keep a stash of cash. Maybe not millions of dollars, but in a country of 330 million an average of a few thousand or even just a few hundred each adds up. Americans probably have more cash on hand than the average Indian. Youíre going to have government agents question millions of citizens in the time span of 1 year?

On top of this being a time and expense boondoggle, Iím sure some legal scholars would bring up the 4th and 5th Amendments.
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Old 12-19-2019, 10:24 AM
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More about this subject with links to still more...

https://www.cnbc.com/2019/02/27/ther...orruption.html
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Old 12-19-2019, 10:37 AM
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I think it would make people leery of holding them for rainy days. I knew a Russian who told that when his grandmother died they found $1000 in old style (pre 1928 large) notes in her mattress. They took them to the US consulate who were happy to convert them to rubles.

But I think it would be a terrible idea (and could be illegal since it amounts to repudiating a debt).
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Old 12-19-2019, 10:47 AM
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On top of this being a time and expense boondoggle, Iím sure some legal scholars would bring up the 4th and 5th Amendments.
Pretty sure that ship has sailed, given that just carrying large amounts of cash has been treated as probable cause to arrest for drug crimes for years.
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Old 12-19-2019, 10:57 AM
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One of the US' largest exports is little pieces of paper with 100s printed on them. Sometimes you'll hear about 'trade deficits', which is basically when other countries trade actual goods for these little pieces of paper. People in other countries like to keep them because they expect them to hold value over time.

Not only would the US lose this huge and little-acknowledged export, but suddenly the flow would reverse and people would trade back these little pieces of paper for actual US stuff.

Note that a lot of the people holding onto these little pieces of paper aren't drug dealers, but are ordinary folks in third world countries where hyperinflation is a thing or a fear. These people would find it much harder to cash out than massive drug cartels would.

Also note that money issued by the US in 1793 has been legal tender ever since, and dollars have been circulating all that time. Only the British Pound can compete with that timespan. (there are British Pounds in second- and third- world mattresses, too.)
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Old 12-19-2019, 12:14 PM
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But any British banknotes that predate the latest revision date can only be exchanged at the Bank of England. Turn up with some pre-1945 £500 notes and they will cheerfully exchange them for modern £20s. Of course, you could have bought a decent house in 1945 for £500 so you will have lost out big time.

I see that Euroland has stopped issuing 500Euro notes because they were largely used for illegal transactions. Existing notes (500 million or so) are still legal tender E200 is now the largest note being printed. I imagine that anyone turning up at a bank with a large number of E500 notes will be subject to some scrutiny - money laundering rules are pretty strict over here.
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Old 12-19-2019, 01:38 PM
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I think it would make people leery of holding them for rainy days. I knew a Russian who told that when his grandmother died they found $1000 in old style (pre 1928 large) notes in her mattress. They took them to the US consulate who were happy to convert them to rubles.

But I think it would be a terrible idea (and could be illegal since it amounts to repudiating a debt).
How could it be illegal? Numerous nations routinely turn over their currency to stay ahead of counterfeiters. Why should the US be the only saps who don't? You want to hide money in a mattress you should consider that risky. It seems pointless to keep old style currency valid since it defeats the purpose of counter-counterfeiting. You want the old style bills to be considered untrustworthy.

As for 3rd worlders keeping them to shield from inflation I suggest that gold or silver would be a better hedge. We're not obligated to take their concerns into consideration.

Also, demonetization has precedent. It was done with US postage stamps during the Civil War.
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Old 12-19-2019, 02:19 PM
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What does the USA constitutional provision about the debt "not be repudiated" mean? Is it possible the Supreme Court could interpret that to mean that old bills can never be declared void?

The India ploy worked so well, I imagine, because very little of the underground cash was held outside of India. In fact, there were a bunch of "gotchas" that made life difficult. You had backpackers from Europe begging on the streets of India (!) because apparently to exchange bills, it had to be done at banks and you had to have an account. I was there just after, and the other major problem was there was nowhere near enough actual cash to go around - so ATMs typically were empty, and when filled were emptied almost immediately. And they only removed the 500 and 100 bills, replaced with new 500 and 2000 bills. All the rest stayed the same.

OTOH, a significant part of the US cash is in foreign hands as a hedge against weaker currencies. I suppose the requirement to exchange at specified points would satisfy the clause against repudiation; but then deny people the right to visit the USA and so exclude a lot of opportunity to trade. That would just mean the bills would trickle in over time. There is no law against carrying large sums - you simply have to declare them at customs, you have to fill out forms when you do bank transactions over $10,000 etc. The police will not charge you in the USA with drug trafficking, they will simply steal your money like any third world country under the guise of asset forfeiture for crime. Then you have to prove you are not guilty to get it back. (Fun fact, a few years ago one report had the average amount of an asset forfeiture from New York police stops being about $180 - obviously the proceeds of crime, no other explanation)

North Korea apparently changed its currency a few years ago, to combat the rise of private enterprise trading and markets - people were getting too rich and using the money to bribe officials. The USSR had persistent rumors about a new currency about to be introduced, since with no consumer goods available, people were accumulating decent amounts of money. One rumor said there would be red rubles and green rubles, and you would only be able to buy vodka with the limited red ruble bills to combat alcoholism. (Never happened)
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Old 12-19-2019, 02:23 PM
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For an example of a country that did exactly this look at what India did as in your example. Hint: it wasn't pretty and it did not really do anything to curb crime. Why would it be different in the US where we have way more electronic currency?

Last edited by Saint Cad; 12-19-2019 at 02:25 PM.
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Old 12-19-2019, 02:28 PM
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I think the main problem with this is, if you look at a $100 bill, it says, "This note is legal tender for all debts, public and private," and I don't think Congress, much less the Treasury department, has any authority to say, "Not any more, they don't."
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Old 12-19-2019, 03:38 PM
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Doesn't Canada do this every few years when new notes are introduced? I thought the process involved making the old, obsolete notes no longer legal tender for purchases unless they were exchanged for new notes.
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Old 12-19-2019, 04:21 PM
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Doesn't Canada do this every few years when new notes are introduced? I thought the process involved making the old, obsolete notes no longer legal tender for purchases unless they were exchanged for new notes.
The usual US procedure is to just quit making the old style, and let them gradually fall out of circulation through normal wear and tear. The life of a bill in circulation is something like 15 years for $100 bills, and quite a bit less for smaller denominations.
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Old 12-19-2019, 05:24 PM
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Doesn't Canada do this every few years when new notes are introduced? I thought the process involved making the old, obsolete notes no longer legal tender for purchases unless they were exchanged for new notes.
In 2021, certain Canadian notes will cease to be "legal tender" (i.e. not accepted for payment of debts) - but banks will still accept them. Otherwise - all notes issued by the Bank of Canada since its founding in 1935 are legal tender and have never been recalled. Notes issued prior to that date can still be redeemed at the Bank of Canada.

https://www.bankofcanada.ca/banknote...er-bank-notes/
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Old 12-19-2019, 05:29 PM
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Part of me would like to see this happen just to see the various meltdowns, frenzied finger pointing, mouth frothing ravings and full blown feces bombs from the various extremes of American political and fiscal thought. Freemen of the land, hard core Libertarians, gold-standard zealots, basically anyone who hates the Federal Reserve. I'm not saying their arguments could make sense, just that they would be fun to watch them lose their collective shit.

Or maybe I'm wrong. Maybe The Powers That Be could institute this plan and it would barely make a ripple in the news. I wouldn't bet money on that.
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Old 12-19-2019, 06:09 PM
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In 2021, certain Canadian notes will cease to be "legal tender" (i.e. not accepted for payment of debts) - but banks will still accept them. Otherwise - all notes issued by the Bank of Canada since its founding in 1935 are legal tender and have never been recalled. Notes issued prior to that date can still be redeemed at the Bank of Canada.

https://www.bankofcanada.ca/banknote...er-bank-notes/
A reply to my own post...

In the Bank of Canada's books, banknotes are a "liability" ($90 billion at the end of 2018), balanced out by "assets" generated by the production of the $90 billion - invested in Government securities. See page 70 of the BofC'a 2018 annual report:

https://www.bankofcanada.ca/wp-conte...18.pdf#page=74

When the various notes become longer legal tender in 2021, will they be removed from the liabilities (or would they have to be officially cancelled)? It's only a billion, and it amazes me that there is still $673 million of Canadian $1000 bills out there.

Canadian banknotes in circulation:

https://www.bankofcanada.ca/rates/ba...s-formerly-k1/
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Old 12-19-2019, 06:57 PM
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No, the old Canadian notes will still be a liability for the Bank of Canada. Theyíre not being demonitised (ie of no value). Itís just that a merchant doesn't have to accept them. If you take them into a bank, the bank will exchange them for face value. The bank will then return them to the Bank of Canada, which will have to pay the chartered bank the face value of the old notes. Itís a way of encouraging redemption of old notes without demonetising, which can weaken the reputation of the currency. Like the US and the UK, Canada is one of the few countries which has never defaulted on its currency, contributing to its value as one of the standard reserve currencies.

And that issue of confidence in the currency is one of the main reasons against the OPís proposal. Right now, one of the strengths of the US dollar, and why it is so valuable, is because the US has never defaulted on its currency. That is what dťmonťtisation is: a form of default. Why would you throw that strength away?

The two plus centuries of reliance on US currency is a pillar of the US economy and the world economy. It contributes to the US dollar being the primary reserve currency in the world. Why would you throw that away and weaken the reputation of your currency, and by extension your economic strength?
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Old 12-19-2019, 07:03 PM
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Note that "legal tender" does not mean that anyone has to accept them for anything other than debt. If you take a Benjamin to the grocery store, they're free to say "We won't take that; hand over those groceries and we'll put them back on the shelves". They're free to say "That doesn't look like the new bills, and we don't trust the old ones not to be counterfeited", even if they take (new) 100s.
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Old 12-19-2019, 07:51 PM
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I can't find it now, but a while back, I found a page on the US Treasury website stating that since the Civil War, when the federal government first started issuing banknotes, they've never devalued, revalued or recalled any notes. The idea is that even a 150-year-old ten-dollar banknote will still be redeemed by the Treasury at the same value. (This is different from whether ten dollars today has the same purchasing power as it would have 150 years ago. We're also ignoring the fact that an old banknote is probably worth more than face value on the collectibles market.)

They seemed proud of this fact.
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Old 12-19-2019, 08:36 PM
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I can't find it now, but a while back, I found a page on the US Treasury website stating that since the Civil War, when the federal government first started issuing banknotes, they've never devalued, revalued or recalled any notes.
Except they sorta did. In 1942, the military governor of Hawaii recalled all U.S. currency in the (then) territory and replaced it with special banknotes for circulation only in Hawaii. The idea was that if the Japanese invaded the islands and got their hands on a lot of currency, they wouldn't be able to use it anywhere except Hawaii. The government also incinerated $200 million worth of the recalled bills, rather than trying to ship them back to the mainland.

Granted, there was a war on and Hawaii was a territory, but there was a period of about two years where, if you were there, you had to exchange your regular American money for different American money.
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Old 12-20-2019, 12:33 AM
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Pretty sure that ship has sailed, given that just carrying large amounts of cash has been treated as probable cause to arrest for drug crimes for years.
While seizures like this have happened, and are a travesty that needs to stop, most of the time there were other circumstances that lead to them.

I simply cannot fathom every single citizen in the country being subjected to interrogation for holding currency without there being mass legal challenges to it. The fact that the OP endorses such fascism is telling.
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Old 12-20-2019, 12:41 AM
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How could it be illegal? Numerous nations routinely turn over their currency to stay ahead of counterfeiters. Why should the US be the only saps who don't? ....
Because the USA has different laws and a Constitution other nations dont (It could be legal, sure, but it could also be illegal too in the USA). We are proud of the fact we have never had to devalue or demonetize our currency.
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Old 12-20-2019, 12:42 AM
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Pretty sure that ship has sailed, given that just carrying large amounts of cash has been treated as probable cause to arrest for drug crimes for years.
Can you give us details on this?
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Old 12-20-2019, 12:45 AM
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The usual US procedure is to just quit making the old style, and let them gradually fall out of circulation through normal wear and tear. The life of a bill in circulation is something like 15 years for $100 bills, and quite a bit less for smaller denominations.
Several months ago, I purchased a bag of craft supplies at an estate sale, and found $82 in cash in several envelopes, hidden among the supplies, in fresh, crisp 1984 currency. Because I didn't find it until I got home, it was mine, and when I spent that money, the cashiers asked if it was real because it didn't look or feel like current bills.

Likewise, Buffalo nickels and wheat pennies don't look or feel the same as currently minted coins.
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Old 12-20-2019, 01:04 AM
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Can you give us details on this?
It happens. It falls under civil asset forfeitures.

And it is an effective tool against organized crime and drug trafficking.

Unfortunately there has been some awful abuses. But as terrible as that is, it happens to a small amount of people, not every freaking citizen of the country like the OP recommends.
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Old 12-20-2019, 01:14 AM
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Can you give us details on this?
It is incorrect. The government does not charge you with any crime. The police simply take your money, and the onus is on you to prove the money is not proceeds of a crime. You pay for your lawyer t fight it. The police goal is to take enough money to make it worthwhile, but no so much that it's worth fighting for if it is legit - so a few hundred to a few thousand. In one case (Texas?), the couple was given the choice to forfeit any claim or get arrested and have their children sent into the CPS syste. Google "asset forfeiture" and be prepared to understand what government of, by, and for the people has become. The Canadian government not long ago issued a warning that travelling in the USA with large amounts of cash was risky, the police could seize it without needing a pretext.

Of course, you still must declare any large amounts of currency over $10,000 when crossing the US border (or boarding an outbound aircraft); or else it will be seized. Plus, if it appears that you are "structuring" your transactions to avoid the bank's obligation to report transactions over $10,000 your money could be seized, and structuring is a crime. If you make large cash transactions, which banks report, you may become the target of an investigation to determine if the money was obtained illegally or in a manner that may have evaded taxes.

It seems to em th Canadian bills fall into 3 categories - really really old (the $25 bill), $1 and $2 bills which have been replaced by coins, and really large bills - $500 and $1000 - which most countries no longer produce to limit money laundering and proceeds of crimes. And check out the most recent $1000 bill - years ago you used to read a news story ever year or so of someone confusing a $1000 bill as a $2 bill since the colours are so similar. (The $1000 was slightly pinker and more purple than the deeper reddish $2) Older bills still pass around from time to time in $5, $10, and $20.

Last edited by md2000; 12-20-2019 at 01:18 AM.
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Old 12-20-2019, 02:02 AM
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Note that "legal tender" does not mean that anyone has to accept them for anything other than debt. If you take a Benjamin to the grocery store, they're free to say "We won't take that; hand over those groceries and we'll put them back on the shelves". They're free to say "That doesn't look like the new bills, and we don't trust the old ones not to be counterfeited", even if they take (new) 100s.
Deep in US Federal Bank regs there are provisions about legal tender, they arent used and there no actual penalties added. Basically if anyone started refusing US tender and demanding gold or Euros, they could be enforced thru added regulations in a few days. But there's never been a reason to do so, everyone wants dollars.

However, if a business doesnt want to handle any cash and just credit, or if a business doesnt want to have change for your C-Note, there's nothing you can do. You cant make them give you change or even take the currency if they wont give you the stuff in return. That's not what "legal tender" means.

OTOH, the IRS does have to accept your currency, but there's a limit of what they have to take in coin.

Legally, I suppose if your bill was say $87.34 and you handed over a hundred and they said "We dont take hundreds' and you just walked out with your stuff and left the C-note there, there's not much they could do either. Theft? "hey that guy took his stuff and paid with this 100 dollar bill!" Cops would just give you a look, and say "You really want to file a complaint"? It'd be a interesting court case. I know a buddy had this happen when he worked at a gas station, they pumped like $80 into the RV, offered a hundred and when he said "We dont take hundreds" they just left it here and drove off. He called me, and I had five twentys, so he made a $20 profit.
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Old 12-20-2019, 05:27 AM
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A Washington Post article from last March points out that there are more C-notes in circulation than $1 bills. Mostly, this is because of criminal activity, but more recent sources (which I read this past week and can't find right now; sorry) assert that this is mostly from foreign banks stockpiling them as a hedge against their own currency devaluing. Sticking it to the cartels could set off a chain of unintended consequences.
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Old 12-20-2019, 06:23 AM
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While criminal organizations process some profits using cash, not all transactions use cash at all anymore.

Furthermore, the large organizations are really good at money laundering. So the cash is converted into monies in bank accounts.

If the US were to replace it's bills with new ones and eventually (after some time) make the old ones redeemable only at certain banks (so that the person and the reason for having so much cash can be checked), this will annoy criminal organizations only as much as anyone else.

They will start taking only the new bills in payment at the start of the transition period. Launder all the old bills just like normal. And continue on.

Individuals with a lot of cash flying under the radar might have a job cut out for them. E.g., someone sitting on a pile of cash from a Luthansa-style robbery. But it's not that hard to find someone willing to take the old bills and exchange them for new ones. (But at a substantial discount. A person has to make money, you know.)

Note that this was one of the complaints about the Indian money change. The big time crooks were not affected. It just hurt the really small time people.
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Old 12-20-2019, 07:51 AM
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Originally Posted by Mark Finn View Post
In 2021, certain Canadian notes will cease to be "legal tender" (i.e. not accepted for payment of debts) - but banks will still accept them. Otherwise - all notes issued by the Bank of Canada since its founding in 1935 are legal tender and have never been recalled. Notes issued prior to that date can still be redeemed at the Bank of Canada.

https://www.bankofcanada.ca/banknote...er-bank-notes/
I did not know about this! I guess Iím going to need to spend that wallet full of $25 bills Iíve been walking around with.
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Old 12-20-2019, 08:19 AM
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I did not know about this! I guess Iím going to need to spend that wallet full of $25 bills Iíve been walking around with.
A collector would pay more than $1000 for each of them.

http://www.coinsandcanada.com/bankno...=14&id_denom=8
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Old 12-20-2019, 08:43 AM
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The problem with money laundering, as much as converting large sums of cash into electrons, is the "laundering" - ensuring there's a plausible back story as to how this person legitimately has this much money in their possession.
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Old 12-20-2019, 10:37 AM
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The problem with money laundering, as much as converting large sums of cash into electrons, is the "laundering" - ensuring there's a plausible back story as to how this person legitimately has this much money in their possession.
Exactly. Suppose you find a suitcase on the street with $1 million in US $100's, and you don't want to report it. How would you - as a "civilian" - "launder" it? Maybe stuff it in your mattress, and pull out a thousand or two every couple of weeks and deposit it in the bank (making sure that the serial numbers are random and not in sequence)? Buy some expensive items - but not so expensive that paying for them with cash wouldn't be suspicious? Buy Bitcoins?
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Old 12-20-2019, 12:02 PM
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Exactly. Suppose you find a suitcase on the street with $1 million in US $100's, and you don't want to report it. How would you - as a "civilian" - "launder" it? Maybe stuff it in your mattress, and pull out a thousand or two every couple of weeks and deposit it in the bank (making sure that the serial numbers are random and not in sequence)? Buy some expensive items - but not so expensive that paying for them with cash wouldn't be suspicious? Buy Bitcoins?
Let us not get into discussing how to break the law, eh?

What I always say- just deposit it and dont worry about the CTR.
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Old 12-20-2019, 12:52 PM
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One of the US' largest exports is little pieces of paper with 100s printed on them. Sometimes you'll hear about 'trade deficits', which is basically when other countries trade actual goods for these little pieces of paper. People in other countries like to keep them because they expect them to hold value over time.

Not only would the US lose this huge and little-acknowledged export, but suddenly the flow would reverse and people would trade back these little pieces of paper for actual US stuff.

Note that a lot of the people holding onto these little pieces of paper aren't drug dealers, but are ordinary folks in third world countries where hyperinflation is a thing or a fear. These people would find it much harder to cash out than massive drug cartels would.
It's not that huge a US export, paper currency that is, as opposed to foreigners particularly foreign central banks gradually building up book entry $'s assets such as US treasuries. For example US currency in circulation increased $101 bil in 2018 (the change in total held overseas isn't directly known but was probably somewhat smaller). US goods and services exports that year were around $2.5 tril.
https://fred.stlouisfed.org/series/WCURCIR
https://www.census.gov/foreign-trade...ts/annual.html

However with that relatively minor clarification, as it relates to the point at hand, that's still a lot of money. The people suggesting the US weaken the attractiveness of US paper currency to foreigners as a store of value tend to ignore the fact that it would cost the US real money, $10's bils per year* if foreigners stopped demanding to hold US paper currency. There might be benefits to fighting crime (though I both agree with you most foreigners holding US currency are not criminals, and I also doubt how much it would undermine major international criminals not to have to paper USD). And maybe some people really want to impose public policies just to mess with groups they don't like ('ultra libertarians' etc). It seems actually a lot of US politics now is actually that, 'let's mess with X' rather than the quaint idea of policies which promote the general good.

Anyway, you can debate the pro's and cons of making paper money less attractive to hold, or eliminating it, or eliminating large denominations at least. But don't forget it would cost money to do that, because the US makes money issuing pieces of paper which pay no interest and have no maturity date, as opposed to the $101 bil more of interest bearing (although now low %) debt it would have to have issued instead.

*besides the fact the whole increase was probably not accounted for by increased foreign holdings, you have to also consider the cost of not only printing net new bills but eventually replacing the whole ca. $1.8 tril of bills outstanding every some years. That's relatively smaller % cost for $100's overseas than say $1's domestically. But most foreigners aren't holding 1928 bills for 90 yrs. Most turn in their $100 bills for new ones every several years, so you have to subtract that cost from the profit. In fact though the *US govt* doesn't discount the value of old US bills, money changers in the third world often do. So it's not $101bil in free money to the govt if the paper money supply increases by that much, but a large % of that number is profit, called seigniorage.

Last edited by Corry El; 12-20-2019 at 12:56 PM.
  #36  
Old 12-21-2019, 01:36 PM
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Buy Bitcoins?
How do you buy bitcoins with cash?

I thought that the exchanges were all electronic, so you still need to convert your paper notes to an electronic medium, like a bank account, then make the e-transfer to the bitcoin exchange?
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Old 12-21-2019, 01:47 PM
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How do you buy bitcoins with cash?

I thought that the exchanges were all electronic, so you still need to convert your paper notes to an electronic medium, like a bank account, then make the e-transfer to the bitcoin exchange?
Insert the cash in a Bitcoin ATM - e.g.:

https://www.youtube.com/watch?v=_aL_OPx1MSc
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Old 12-21-2019, 01:50 PM
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Can you do that without an account with the bitcoin atm operator that doesn’t leave an e-trail? What’s the difference between that and depositing to a regular bank?
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Old 12-21-2019, 01:55 PM
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Can you do that without an account with the bitcoin atm operator that doesn’t leave an e-trail? What’s the difference between that and depositing to a regular bank?

I would assume that exactly the same reporting requirements for cash transactions would apply to a bitcoin atm as to a bank atm. Eg, if you deposit $1000 in cash every day for eleven days, the bitcoin atm operator should have a mechanism for flagging it as a suspicious structuring transaction, and then file a report. If the bitcoin atm operator doesn’t do that, they’re potentially in trouble themselves.
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Old 12-21-2019, 03:42 PM
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Can you do that without an account with the bitcoin atm operator that doesnít leave an e-trail? Whatís the difference between that and depositing to a regular bank?

I would assume that exactly the same reporting requirements for cash transactions would apply to a bitcoin atm as to a bank atm. Eg, if you deposit $1000 in cash every day for eleven days, the bitcoin atm operator should have a mechanism for flagging it as a suspicious structuring transaction, and then file a report. If the bitcoin atm operator doesnít do that, theyíre potentially in trouble themselves.
Yes, and you will get reported.
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Old 12-21-2019, 05:29 PM
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Thanks. In fact, given the nature of bitcoin, I would have thought that there might be even greater scrutiny of cash for bitcoin transactions than for a regular bank.
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Old 12-23-2019, 07:11 PM
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Exactly. Suppose you find a suitcase on the street with $1 million in US $100's, and you don't want to report it.
I would worry less about reporting a find to authorities, than being found by whoever "lost" a million bucks in a suitcase. I doubt even a casual stroll across the border into Mexico and ducking into inconspicuous village life (avoid expat colonies) would be safe.

Back to topic: Can the US recall certain notes? Sure. Would druglords be much bothered? I doubt it. They'll find other ways to buy politicians, courts, cops, businesses. "Plata o plomo" is a difficult offer to refuse.
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Old 12-24-2019, 11:52 AM
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I would worry less about reporting a find to authorities, than being found by whoever "lost" a million bucks in a suitcase. I doubt even a casual stroll across the border into Mexico and ducking into inconspicuous village life (avoid expat colonies) would be safe.

Back to topic: Can the US recall certain notes? Sure. Would druglords be much bothered? I doubt it. They'll find other ways to buy politicians, courts, cops, businesses. "Plata o plomo" is a difficult offer to refuse.
Yes. Do the drug lords really have all their earnings in palettes of $100 bills, like Breaking Bad? I suspect they've found ways to legitimize and convert past earnings already, and even an outright ban on $100 bills would only be a minor inconvenience.

If you are trying to use that hypothetical $1M suitcase of cash, pretty much any action except using it for routine expenses and a few reasonable smaller purchases could come be seen as illegal "structuring", breaking up cash transactions into smaller amounts to avoid reporting limits.
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Old 12-25-2019, 12:26 PM
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Yes. Do the drug lords really have all their earnings in palettes of $100 bills, like Breaking Bad? I suspect they've found ways to legitimize and convert past earnings already, and even an outright ban on $100 bills would only be a minor inconvenience.

If you are trying to use that hypothetical $1M suitcase of cash, pretty much any action except using it for routine expenses and a few reasonable smaller purchases could come be seen as illegal "structuring", breaking up cash transactions into smaller amounts to avoid reporting limits.
In my earlier post I pointed out how different money laundering is for small time people (like Walter White) and big organizations. The latter can take suitcases into friendly banks and get the money deposited with nothing reported to the Feds. Bribery and threats are very effective in avoiding paper work.

The Feds have gotten better at detecting this in domestic banks. But there's a lot of overseas banks that will have personal all too happy to bend the rules, if there are any pertinent rules at all.
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Old 12-26-2019, 01:51 PM
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In my earlier post I pointed out how different money laundering is for small time people (like Walter White) and big organizations. The latter can take suitcases into friendly banks and get the money deposited with nothing reported to the Feds. Bribery and threats are very effective in avoiding paper work.

The Feds have gotten better at detecting this in domestic banks. But there's a lot of overseas banks that will have personal all too happy to bend the rules, if there are any pertinent rules at all.
Not in America. And overseas, those nations could be blacklisted, so things are tightening up there also. Not to mention, you cant fly with a couple duffle bags of cash.
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Old 12-26-2019, 04:20 PM
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Not in America. And overseas, those nations could be blacklisted, so things are tightening up there also. Not to mention, you cant fly with a couple duffle bags of cash.
You do understand I was talking about large, wealthy, criminal organizations here, right? If you can move drugs across borders, cash is no harder. Esp. when you're moving things out of the US rather than in.

And such organizations tend to find ways around laws and not lose a bit of sleep.

As the Panama Papers proved, the regulations on banks are not exactly enforced 100% of the time.

Last edited by ftg; 12-26-2019 at 04:21 PM.
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Old 12-26-2019, 06:49 PM
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I read a while ago that well-publicised seizures of large quantities of drugs are much less of a problem for "criminal organizations" than seizures of their cash. There is an almost endless supply of relatively cheap drugs, while cash is more limited, is bulky and attracts a good deal of attention from the authorities.
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Old 12-26-2019, 07:25 PM
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You do understand I was talking about large, wealthy, criminal organizations here, right? If you can move drugs across borders, cash is no harder. Esp. when you're moving things out of the US rather than in.

And such organizations tend to find ways around laws and not lose a bit of sleep.

As the Panama Papers proved, the regulations on banks are not exactly enforced 100% of the time.
The border between the USA and Mexico is pretty porous. You can walk.

Now try walking that bag of cash to Switzerland or some island.
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Old 12-27-2019, 03:10 AM
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The border between the USA and Mexico is pretty porous. You can walk.
Walk or drive south, no problem, not immediately, not if you avoid attracting attention. I've repeatedly walked and driven across several Arizona-Sonora crossings. Nobody cares what you walk in. Driving, be sure to buy car insurance at the border, and don't antagonize the checkpoint guards a dozen miles past the frontier. But they're mostly looking for firearms. Bury your greenbacks in dirty laundry to avoid discovery.

No, really. Driving across Mexico in an old SUV, we shower-laundered our clothes in posadas every night, then spread them out to dry on a blanket atop our luggage in the SUV's rear on the next day's drive. Checkpoint guards never dug past the top layer.

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Now try walking that bag of cash to Switzerland or some island.
I'm unfamiliar with Swiss border checks but I'd strenuously avoid likely inspections.
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Old 12-27-2019, 08:31 AM
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Now try walking that bag of cash to Switzerland or some island.
I seriously doubt that this would be the preferred method of moving cash for a drug cartel.

Remember, just because there are laws against speeding doesn't mean that no one speeds. And that there are laws, border controls, bank rules, etc. against laundering cash doesn't mean cash isn't being laundered in the millions every day.
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