Not to steer things off topic but, this is from a book I read recently....called "Reefer Madness: Sex, Drugs, and Cheap Labor in the American Black Market"
( a longer exerpt can be found here: http://www.wnyc.org/books/15307)
Author makes an interesting point below:
The U.S. dollar now serves as the unofficial currency of this new global underground. During the late 1960s and early 1970s American economists began to notice that the amount of currency in circulation had grown much larger than the amount ordinary citizens were likely to use in their everyday transactions. The discovery led to the first inklings that an underground economy was emerging in the United States. While business publications heralded the advent of a cashless, credit-based economy, the use of banknotes quietly soared. The $100 bill soon became the underground favorite, not just in the United States, but overseas as well, thanks to its high face value and the relative stability of the dollar. During the late 1970s the outflow of currency from the United States averaged about $2 billion a year. By the 1990s, about $20 billion in U.S. currency was being shipped to foreign countries every year. Today approximately three-quarters of all $100 bills circulate outside the United States.
The supremacy of the dollar in the global underground has proven a boon to the American economy. The outflow of U.S. currency now serves, in essence, as a gigantic interest-free loan. Every time the U.S. Treasury issues new banknotes, it purchases an equal value of interest-bearing securities. Those securities are liquidated only when the currency is taken out of circulation and put into a bank. In 2000 the U.S. Treasury earned an estimated $32.7 billion in interest from its banknotes circulating overseas. The 1996 redesign of the $100 bill was partly motivated by fears that Middle Eastern counterfeiters had created a convincingly real $100 bill, a "supernote" that might threaten the role of U.S. currency in unofficial transactions. The latest threat to the $100 bill comes not from organized crime figures, but from the central bank of the European Union. The new 500-euro note is perfect for black market activity. It has roughly five times the value of a $100 bill, allowing drug dealers and smugglers to lighten their suitcases. Portugal has banned the 500-euro note for those reasons, and its acceptance in other foreign undergrounds is not yet certain.
( a longer exerpt can be found here: http://www.wnyc.org/books/15307)
Author makes an interesting point below:
The U.S. dollar now serves as the unofficial currency of this new global underground. During the late 1960s and early 1970s American economists began to notice that the amount of currency in circulation had grown much larger than the amount ordinary citizens were likely to use in their everyday transactions. The discovery led to the first inklings that an underground economy was emerging in the United States. While business publications heralded the advent of a cashless, credit-based economy, the use of banknotes quietly soared. The $100 bill soon became the underground favorite, not just in the United States, but overseas as well, thanks to its high face value and the relative stability of the dollar. During the late 1970s the outflow of currency from the United States averaged about $2 billion a year. By the 1990s, about $20 billion in U.S. currency was being shipped to foreign countries every year. Today approximately three-quarters of all $100 bills circulate outside the United States.
The supremacy of the dollar in the global underground has proven a boon to the American economy. The outflow of U.S. currency now serves, in essence, as a gigantic interest-free loan. Every time the U.S. Treasury issues new banknotes, it purchases an equal value of interest-bearing securities. Those securities are liquidated only when the currency is taken out of circulation and put into a bank. In 2000 the U.S. Treasury earned an estimated $32.7 billion in interest from its banknotes circulating overseas. The 1996 redesign of the $100 bill was partly motivated by fears that Middle Eastern counterfeiters had created a convincingly real $100 bill, a "supernote" that might threaten the role of U.S. currency in unofficial transactions. The latest threat to the $100 bill comes not from organized crime figures, but from the central bank of the European Union. The new 500-euro note is perfect for black market activity. It has roughly five times the value of a $100 bill, allowing drug dealers and smugglers to lighten their suitcases. Portugal has banned the 500-euro note for those reasons, and its acceptance in other foreign undergrounds is not yet certain.
