why isn’t there more counterfeit cash?

Why aren’t their more counterfeit organizations? According to the Secret Service, only 0.02% of all bills circulating in the U.S. are counterfeit (though they claim that about 70% of U.S. bills circulating in Russia might be counterfeit). My question: what doesn’t this happen more often?

Just a small number of counterfeit bills could absolutely undermine the U.S. economy. Some rogue countries like North Korea supposedly have factories that churn our counterfeit dollars. How come so few come to market?

We have people successfully smuggling drugs into this country – why can’t they smuggle in cash?

First, let’s look at the manufacturing problem. Manufacturing good fakes (especially of the new bills) is extremely difficult. But a country like north korea (which can make nuclear weapons) surely can develop the technology to create good fakes. And these fakes don’t have to be perfect – they just have to fool most of the people most of the time.

Second, let’s tackle the distribution problem. This is probably the reason why fake bills are not as prevalent in our society. But it isn’t that insurmountable. You’d think a sophisticated intelligence network like north korea, al Qaeda, or the Medellin Cartel could make a deal with a U.S. distribution partner.

So why aren’t their hundreds of billions of new dollars flowing into the U.S. every year? Maybe the only reason is that they are too bulky. A brick or 20 dollar bills is worth a heck of a lot less than a brick of cocaine. But that doesn’t seem insurmountable either.

I hope there are other reasons why counterfeiting isn’t rampant. I look forward to any comments.

3 thoughts on “why isn’t there more counterfeit cash?

  1. dan

    Maybe it has to do with the size of the bill.
    for example, if you have the technology to produce counterfeits, you probably would want to produce a lot of $100 bills, and not a lot of $1 bills.
    But there are less $100 bills going around then there are $1 bills. And usually, if a bank or a store gets a $100 bill, they are more likely to check if its counterfeit.
    So if you’re going to make counterfeit bills, it is only cost-effective to product high dollar amount bills, but those get caught in the system. Therefore, it doesn’t make economic sense to produce counterfeit.
    Just a thought.

    Reply
  2. Jeremy Epstein

    I’m in the middle (dVR) of a History Channel documentary called “Making a Buck” about counterfeiting. Dont’ have an answer for you, but it was interesting to note that, along w/treason, counterfeiting is the only crime mentioned in the Constitution b/c of its severe impact on the economy, faith, trust, etc.

    Reply
  3. Hmm

    If the bills are passable, then they are a financial stimulus since all paper money is backed only by the full faith and credit of the United States government. That is, at worst, counterfeiting might lead to an increase in inflation; however, “people know inflation erodes the real value of the government’s debt and, therefore, that it is in the interest of the government to create some inflation.”[1] Thus, a foreign agent would have to engage in massive, sustained counterfeiting in order to damage the economy. Anything short of that and they would be acting like an auxiliary Federal Reserve.
    [1] http://www.federalreserve.gov/boardDocs/speeches/2002/20021121/default.htm#f18

    Reply

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