Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Fake US Dollars!

  1. Dec 14, 2009 #1
    Hi all,

    I've just returned from a trip to the US, California... Disneyland.....Sequoia and Yosemite Nat. Parks. Incredible!

    While in Anaheim, I cracked several US $50's and $100's. I was provided with 10 x US $100's at a Sydney Airport currency exchange. I wanted to enhance my foreign experience using local currency. I spent thousands of course...the rest on my card!

    Here in Australia we have some countefeit currency but not enough, nor of a quality to warrent currency scanners in stores.

    "I'm sorry we can't accept that." The keeper says after scanning my note. "It's probably been through the wash too many times or something."
    "Or counterfeit?" I say.
    "Nah..just the washing machine. Pass it off at Disneyland, they don't use scanners." And right she was.

    This occured a number of times. 4 x $50's were knocked back, they were given to me as change in various retail outlets in the US, and 2 of the $100's..from the currency exchange!

    Despite this assurance...

    "Regardless of the level of concern, the figures for the incidence of counterfeiting were remarkably consistent: most commercial banks report detecting no more than about one counterfeit note for every 10,000 notes they handle."
    From...http://www.federalreserve.gov/boarddocs/RptCongress/counterfeit/default.htm" [Broken]

    I can't help but figure there is alot they don't know about.

    Has anyone had a similar experience or particular knowledge in this area?

    Thanks.
     
    Last edited by a moderator: May 4, 2017
  2. jcsd
  3. Dec 14, 2009 #2

    mgb_phys

    User Avatar
    Science Advisor
    Homework Helper

    Yes but you make money out of uncopyable plastic with embedded holograms, transparent panels and stuff - typical unsporting Ozzy behavior.
    The US at least gives the counterfeiters a sporting chance by printing it's money with one of those kids ink stamps.
    So you have to have all the notes checked, but the store clerks aren't exactly going to be that diligent for $5/hour so they make a simple rule, if NOT glows blue do NOT accept.
     
  4. Dec 15, 2009 #3
    Perhaps my original post would have been better placed in General Discussion.

    I am, however, interested in the economic ramifications of so many fake bills in the states and elsewhere.

    How much fake money might there be? As it certainly isn't all being reported to the Fed or Secret Service.
    What will happen if it is recalled and replaced with more secure currency (like the good ol' Ozzy plastic dollar :wink: ) Or has it gotten out of hand.

    Why hasn't inflation covered this problem?

    Is the US allowing this to continue. We can't just print more money...let's let the crims do it!
     
  5. Dec 17, 2009 #4
    I've often wondered if there are many fake dollars wherever gray market goods trade in dollars in foreign countries? Apparently the number of dollars circulating outside the U.S. is large and this is where I'd expect counterfeiting to be most prevailent.
     
  6. Dec 18, 2009 #5

    ideasrule

    User Avatar
    Homework Helper

    Are you suggesting that the small percentage of counterfeit bills in circulation can lead to inflation? This is the 21st century. Most of the world's money is stored electronically, and the cash (real + counterfeit) in circulation makes up only a tiny percentage of the money in existence.
     
  7. Dec 20, 2009 #6
    No. Well, yes. And that it may not be a small percentage. My first interest was in the prevalence of counterfeit bills. Was my experience unusual and is anyone aware of studies other than those cited by the reserve? Who is paying for these fake dollars? I mean how many people use card only for every purchase? Disney Land doesn’t cop them all. The retailers with scanners accept or reject them and my assumption, that fake dollars are fairly common, got me thinking.

    I figure the fed has underestimated the fake dollar movement; the scanners come about because certain notes weren’t being accepted at the bank, so who has been accepting them? I wasn’t suggesting it would affect the interest rate set by the reserve.

    If it is a big problem the cost of something has to go up. Perhaps a series of drug lords jack their prices every year after having their cash scanned. I’m sure they’re not accounting for the fakes and removing them from circulation.
     
  8. Dec 20, 2009 #7
    The Secret World of Money doesn't address fake money but it is an excellent discussion of the history and nature of money.

    Inflation means the price of goods generally would go up, but cost is not necessarily limited to only the price of something, so the question of cost is a social calculus. Who pays the cost of inflation?

    Anyone who can earn a return on capital greater than the rate of inflation over time wins and anyone who can't beat the inflation rate loses. The former can purchase more stuff and the latter must purchase less stuff from society.

    Treasury does not even print money to offset taxes anymore, it lets the banks create money as debt via fractional reserve banking. This causes inflation pressure, credit booms and busts, and bailouts of the banking class.

    Thus persons who pay the labor tax (income tax is a labor tax) produce the goods and bear the cost of consuming less, so bankers, borrowers, and counterfeiters can consume more. It ain't fair but it appears to be so ...
     
  9. Dec 20, 2009 #8
    Better to take your Aussies and exchange them in dollars in the country of dollars, and the other way around too.

    At one time I ran across an internet article expressing the deep concern of the US FRBC (Federal Reserve Banking Corporation) over the prevalence of counterfeit dollars abroad (notably Sadam's Iran), rather than the domestically variety. Apparently this had an effect in spurring the manufacture of bills that included the security strip, and other changes.

    You should also note that the US FRBC would not be greatly concerned over counterfeit currency except at times when these would come home to enter into competition with their own issuance.
     
    Last edited: Dec 20, 2009
  10. Dec 20, 2009 #9
    On another track, paper and coined money in most industrially developed countries will soon be obsolete due to higher expectations of control by the issuing entities and the emergence of the technological developments to enable it.

    RSA accounts will supplant physical tokens with digital money.

    Since we're in the Social Science folder, it is my obligation to say all this is my opinion and not worth a dime.
     
    Last edited: Dec 20, 2009
  11. Dec 21, 2009 #10
    I've actually rarely heard of someone finding a counterfeit bill. I hardly use cash anymore myself, especially anything larger than a twenty, so I do nto deal in cash so much anyway. With more people using electronic payment methods it is quite possible that people pay less attention to cash transactions and more fake bills get passed, though I would think it would be the other way around I'm not so sure.

    What sort of scanner were they using do you know? They used to use a special pen and a black light. Recently they have put a metal strip into bills a denomination of five or greater which they may be scanning for. Older bills don't have them, some people play with them and pull them out, and counterfeiters take the strips out of real bills to put in fake ones so if they were scanning for the strip that may be a cause.

    Our Secret Service was actually originally instituted to combat counterfeiting, protecting the president was a later development, so we do have a law enforcement agency specifically for the purpose of tracking counterfeiters. I understand that they have the most advanced lab in the world for investigating counterfeit currency and forged documents. Between them and the FBI I am sure that the US has a close eye on this sort of thing.
     
  12. Dec 23, 2009 #11
    Most of the scanners used were like this one -

    http://www.dongbo2008.com/newEbiz1/EbizPortalFG/portal/html/ProductInfoExhibit.html?ProductInfoExhibit_ProductID=c373e90db1ee096c8ffa46bc4e3154c5&ProductInfoExhibit_isRefreshParent=false" [Broken]

    Some had a red and a green light to interpret the results.
    It appeared to me that they all used UV light.

    And none of the stores bothered scanning anything below a $50. So I'm not sure how accurate data on the usage of fakes below that denomination can exist. Besides the fakes detected were handed back.

    I'm sure Disneyland will have reported them however.
    Terrible of me to have dumped them on Disneyland....but my money was good in the first instance....I should have asked the store clerk to scan my change before giving it to me.
    In my defence I was unaware I may have needed to.
     
    Last edited by a moderator: May 4, 2017
  13. Dec 23, 2009 #12
    Ok. That's a cop out.

    And if they scanned my money I should have asked them to scan their own.

    Either way I passed fake bills and knew it. Somehow I don't think my travel insurance will have covered it.
     
  14. Dec 23, 2009 #13
    What are the published statistics on counterfeit money in circulation?
     
  15. Dec 23, 2009 #14
    This from the link in my original post.

    "We estimate that about $70 million, or less than one counterfeit per 10,000 notes, might be in circulation at any one time. In addition, we consider a range of $20 million to $200 million, or between about 25 cents and $2.50 per $10,000 in circulation, to be an exhaustive confidence interval. It is indeed possible that a large number of counterfeits could be injected into the financial system, but they would likely be detected and removed quickly given what we know about cash transactions and the banking system. We believe that the close correlation between the country distribution of currency holdings and the counterfeits detected by the Federal Reserve and the U.S. Secret Service is strong evidence that both counterfeit detection and incidence fall within a small range throughout the world."
     
  16. Dec 24, 2009 #15
    Sorry, JayR. I seem to have lost track. But you must understand that the federal reserve corporation is in the business of circulating tokens of exhange under the belief in 'full faith and confidence. The value of their stock depends upon the quality of their product and how well they defend from it from infringement by competitors. It is not in the interest of Goocci to report on the success of its competitors to knock-off look-alike handbags. Neither is it in the interest of the federal reserve corportation to give realistic numbers of the amount of couterfeit markers in circulation. For this reason I consider their data tainted.
     
  17. Dec 24, 2009 #16
    So do I mate. And I haven’t found any published statistics on counterfeit money in circulation.
    I don’t have access to these journals….

    Journal of Criminal Justice “Correlates of currency counterfeiting”
    Volume 37, Issue 5, September-October 2009, Pages 472-477


    Journal of Monetary Economics “A model (of the threat) of counterfeiting”
    Volume 54, Issue 4, May 2007, Pages 994-1001

    And I am sorry, ideasrule, but there does appear to be a threat:

    “In this paper I show that a lax anti-counterfeiting policy is inconsistent with price
    stability. I use a deterministic matching model with no commitment and no enforcement. An intrinsically worthless but perfectly durable object called a ‘note’ can be produced by banks at a given cost, but also by nonbanks at a (possibly) higher cost. Counterfeiting occurs when nonbanks produce notes in equilibrium. When it is cheap for nonbanks to produce notes, or the technology used to detect counterfeits is poor, counterfeits are circulating in equilibrium and trade is only implemented with a growing stock of notes (thus creating inflation). Finally, I show that the highest welfare level is achieved when counterfeiting is costly, or when the detection of counterfeits is of high quality.”

    From this report - http://www.ecb.eu/pub/pdf/scpwps/ecbwp512.pdf"
     
    Last edited by a moderator: Apr 24, 2017
  18. Dec 24, 2009 #17
    Hey, Jay. I think we only have the actions of the legal issuers as valid data to go by--not their public propaganda. What independent organizations are there who monitor counterfeit money par-volume? I don't think there are objective organizations.

    So instead, using as a measure the types of activity by the legal issuers to deter counterfeit tokens by the US fed, I conclude that they have had ever increase concerned over the ability of paper currency to fulfill the needs of authenticity for the past 15 years or so.

    Paper money in the US now includes an embedded stip of plastic within the paper. There is now a watermark within US bills. There is a 'constelation' of markers on most bills, that embedded software in high-end printers capable of duplicating the images of notes, will recognise and refuse to copy. There may be more new additions I don't know about.

    This is an ongoing concern as the fed attempts to stay ahead of capable technology in the hands of privateers at home, overseas and by hostile nations.
     
    Last edited: Dec 24, 2009
  19. Dec 24, 2009 #18
    The Secret Service and FBI which is where the info in the article probably came from.
     
  20. Dec 24, 2009 #19
    Doh! Teach me not to jump to conclusions. Thanks, SA.
     
  21. Dec 25, 2009 #20
    I worked in retail 10 years, only 100% sure once that the bills were fake. Other than than that I never knew the bank to reject any bills from a deposit. But everyone is on the brink of poverty here, in the U.S., and extra paranoid.
     
Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook




Similar Discussions: Fake US Dollars!
  1. Million dollar . (Replies: 8)

  2. Dollars and Cents (Replies: 31)

  3. Canadian dollar (Replies: 11)

  4. A trillion dollars (Replies: 29)

Loading...