The new $20 bill. Problem still not solved

So it seems that the Bureau of Engraving and Printing has introduced the new $20 bill - Washington Post article and BEP site.

The purpose, according the articles, is to reduce counterfeiting. Ok, that is a nobel reason. But as with the other “new” $20 (about 7 years in circulation), the original $20 was never pulled from circulation. Therefore, the counterfeiters can still produce the old $20s and the old new $20s.

IMHO, until the government decides to “uncirculate” the old and old new $20s, the problem of counterfeiting will remain unchanged. If the government says “as of X date, the only $20 bills that will be legal tender are the new new $20s”, all old and old new $20s will be turned in and there will be a dent in counterfeiting.

Ok, got that off my chest - I know, big deal. :slight_smile:

just one thing, if ALL the old 20s are being handed in, then surely the occasional counterfeit one here, and the occasional one there can also be handed in, so for the counterfeit ones they get a real one. The point in issuing new notes is, I believe, in the knowledge that eventually the old one’s move out of circulation. In my view the other strategy has similar problems, the counterfeiters can still make money, no pun intended.

Yes, if there was a “trade in”, the occasional counterfeit one will come in. But the occasional counterfeit one is already out there. While the old ones move out of circulation, new counterfeit ones (in the form of “old” bills) can move into circulation. Who’s to say when the $2,000 in $20s I have in my safe for “emergency funds” will be circulated. Could be years or even decades. If I had to exchange them, I surely would lest I be stuck with worthless cotton-fiber bills.

When doing the exchange (probably at banks), the tellers can check each bill (use of the special pens, blacklights, etc) and only exchange the real ones. Sure, somebody with a fake will get screwed but then he/she would be screwed today if trying to deposit the bill (as I’ve been screwed with fake money). Of course, if somebody came in with many fake bills, the would have a little “talk” with him/her.

This way, there is a limited time during which the counterfeit bills can enter circulation.

Please note: I do not have $2,000 in emergency funds in my safe. Don’t bother looking. Nothing more to see here.

What do you think “pulled from circulation” means? The lifespan of a $20 is only a few years; at a certain point, a bank turns it in as worn out and gets a new $20. So the turnover time between old and new bills is actually pretty short. That’s why they don’t bother forcing a trade-in. Five or ten years after the new bill is out, banks start getting real suspicious when someone shows up with thousands of dollars in old bills, and you have to explain where it came from.

In other words, yes, counterfeiting can continue, but not as a volume business trading in old bills. Since counterfeiting isn’t profitable without a large volume, a new bill does effectively hamper things, especially if the new bill really is harder to forge (which is the problem, I understand, with the old new $20.

The average life of a $20 is 4 years - cite. However, I still have some “old” $20s and they haven’t be issued for 7 years. My point is not the thousands and thousands of old bills but a few here and a few there will add up. Current trend in counterfeiting is not the massive presses but people with computers printing what they need when they need it. “It used to cost $10,000 for an offset press and the related equipment, and not many people had access to it, or had the required skills. When you compare that to the number of people with scanners, inkjet printers and desktop computers, it’s nothing.”

Banks already get suspicious when you show up with a pile of cash in any condition. Anything over $10,000 per day is reported to the government on a “Cash Transaction Report.” Depositing $6,000 yesterday and $5,000 tomorrow is considered “structured” deposits, and will also trigger a CTR, so don’t bother trying to hide your counterfeit money or gambling income this way.

So your point is that a trickle of counterfeit money is a problem? Not really. To damage the national economy (i.e., to degrade public confidence in the money), it has to be done on a scale that requires plates and offset presses.

The volume of money someone can counterfeit on their desktop arrangement at home is limited, and the Secret Service already gets those guys in a lot of cases, since the quality is so low.

I just read that there’s more than $500 trillion dollars in circulation. Even if everyone in the U.S. printed up a $20 on their own, it wouldn’t affect confidence in the dollar.

Who would print up a single twenty?

Hansel, ok, so the government shouldn’t care about the small guys. Sure, the national economy isn’t ruined so it’s ok to break the law. I don’t think so. And could you provide a cite showing the Secret Service gets most of the little guys?

From this CNN article, it says “With the effectiveness of computer-generated images these days, they can make some pretty nice counterfeits pretty quickly.” So, where is the need for the offset printers? and “Of all the counterfeit bills in circulation, about 40 percent are produced digitally, according to the Secret Service.”

So for dollar confidence, yes it doesn’t matter but counterfeiting is counterfeiting - and the government should do all it reasonably can to stop it.

And Paul in Saudi, I read an article yesterday (and I can’t find the link but I’m still looking) that said that some people use computers to make what they need for a night out (or something like that).

One problem with the trade-in is it would, to some extent, devalue US currency. In a lot of out-of-the-way countries, there are folks who have some US money because it’s a nicely stable currency. They have no way of getting to somewhere where a “trade-in” would occur. Making their money valueless would completely screw them. Now, you may not care about them, but what about the general confidence in the stability and value of US currency?

On the other hand, (it is rumored) forcing a trade-in would flush out a pile of drug money that’s so far remained unlaundered.

I figure, after several years of the new bills, all appearances of the old bills will be heavily scrutinized, but accepted if they’re legit. Once in the hands of a bank, the bank will swap them out for the new money. That seems reasonable to me.

And here I was thinking the unsolved problem was that Jackson’s forehead is still frikin’ gihugic.

A wholesale trade-in was used in the U.S. military during Vietnam and Korea (and may have been used other times & places, but that’s all I have first-hand knowledge of).

In Vietnam, when a soldier arrived in country, he was given MPCs (Military Payment Certificates) on a 1:1 ratio with any U.S. greenbacks or coins he carried. (Greenbacks were illegal for soldiers to handle in-country.) The MPCs were smaller than standard U.S. bills, in various colors and demominations from 5 cents up to 20 dollars. They were valid at all U.S. installations (the troops were expected to exchange some for the local currency, “piasters” for non-military transactions).

But over time, the MPCs became accepted by the natives, even preferred over piasters, whose exchange rate aways got worse. Then came a day when all military bases were closed without warning and we were told to bring any MPCs to exchange for a new series (diff colors, design, etc.). Although we could exhange as much as we wanted that day, we were told that the following day, the old series would be worthless. And since the locals were not allowed to participate in the exhange, they would be left with nothing of value.

The official, ostensible reason was to crack down on drug and the black market. Exactly how this would work, I don’t know. Personally, [ul][li]I always thought that the Gummint made a quick and easy pile of bucks while playing Moralist Big Brother, and[]I felt sorry for the [non-drug-dealing] locals who had innocently trusted G.I.'s money, like Sengkelat says. No longer would they accept our new MPCs and we were forced to carry more piasters.[/ul] [/li]
This scenario was the basis for a M
ASH episode in Korea, where Charles, sensing an opportunity for a financial killing, snuck out to the local village on exchange day, bought up all the MPCs he could get at cents on the dollar, but was thwarted when he tried to re-enter the base to exchange them.

I didn’t say it’s okay to break the law, I said that the incidence of minor counterfeiting is already under control. The government should and does care. I don’t have a cite, since I don’t research this sort of stuff, but I do recall a documentary on counterfeiting that discussed the increased use of scanners and bubblejet printers to quickly execute passable copies–mainly high school kids who didn’t understand the seriousness of the law they were breaking. If the store took the money, it went to a bank that immediately identified it, and didn’t honor it, and easily traced it back to the store that took it. From there, it wasn’t hard for a Secret Service agent to show up at a school, ask a few questions, get the responsible kid into an interview room, and scare the living shit out of him.

As for someone printing up enough for a night out, it’s plausible because bars aren’t well lit. But again, it’s immediately caught at the bank, who doesn’t honor it. Bars get burned a few times, and the waittresses all get anti-counterfeiting markers to test big bills with.

What’s the real fear with counterfeit money? That you’ll go to a bank and receive it, or get it from an ATM. The fact that you can fool a clerk isn’t frightening; it’s whether or not you can fool a bank, and that definitely requires more than a bubblejet printer. That’s why counterfeiting is still only threatening on an industrial scale–plates, engravers, offset presses, special papers and inks. Do you think someone with a color printer on their desk has the equipment in the basement for bleaching 1s to make 20s with a security strip in them?

And this is why I thought a trade-in would be a good idea.

Sengkelat, I never thought about the devaluation from foreign ownership - good point - very good point. But I did think that the drug (or other “illegal”) money would be flushed out and arrests/inquiries would be made.

hansel, while the small business or person could still get screwed, I would prefer not to be that person. Without a trade-in (or something that pulls older series out), I will have to decide if I would ever take a “old” bill. Sure, it could hurt a relationship (no, not romantic relationship) or business relationship but I would want to protect myself.

I think a merchant who refuses to take old $20s ten years after the introduction of a new bill is perfectly within her rights, and being prudent.

I think there are practical, largely economic, reasons for not having a trade-in that aren’t outweighed by the threat of small-time counterfeiting, largely because every argument you’ve made about old $20s being easy to counterfeit by someone with a computer are just as easy to make with the new bills: both depend upon passing them to someone who can’t or won’t detect it. In both cases, the bank will.

And I knew I had seen it before.

So, not only prudent, but legal.

BTW, why was the thread moved?

The BEP site in the OP says they plan to upgrade designs every 7-10 years. That would make a trade-in impractical.

This practice of ducking the $10,000 level is also known as “smurfing.”

Well, when you get right down to it, what’s stopping anyone from taking the initiative and trading in their own bills? Just because there isn’t an “official” trade-in, if it bothers you that, someday, your old money might be looked at askance, why not just do it on your own?