Shills for Bills

The latest piece of tongue-in-cheekiness from IR magazine - my January Speculator column.

Amd in a somewhat more serious vein, I will be contributing regularly to the Guardian's Comment is Free pages and the first effort on Ban Ki-Moon's need to spin is out now. Just click.


Shills for Bills


A decade ago, I went to see the Pirates of Penzance. "A policeman's lot is not a happy one," rang out across the auditorium of the John Jay College of Criminal Justice on the West Side of Manhattan.
In the interval I studied the displays in which the misnamed Secret Service showcased their efforts to protect civilization and the dollar from forgers, whose lot, they seemed to imply, was also not a happy one.
The first case had a magnified twenty dollar bill and explained its anti-forgery features, one of which, it proudly declared was "No water mark." I imagined all those forgers gnashing their teeth in frustration at being denied the opportunity to put a water mark in their product, or maybe even iron them out if they had inadvertently used water-marked paper.
In a splash of unparalleled creativity, the Treasury had actually had the temerity to introduce a new twenty dollar bill, and so the next exhibit had an updated display of this new challenge to the counterfeiters' guild. Unblushingly, it described the big step forward in security features, "Note the watermark."
Of course, in these modern days of megadeficits and plummeting greenbacks, it is difficult to imagine how even the most hyperactive counterfeiter could compete with the promiscuously reckless productivity of the US Treasury. But productivity is not the same as creativity.
Users of European currencies had always wondered at the conservatism of the US Treasury's design efforts: making all bills the same size, printing them all green and omitting watermarks off the paper, seemed dedicated to making life easy for forgers.
Anyone who has tried to sort out the wads of assorted bills left in pockets and wallets at then end of the night on the town in the dark back of a New York cab with a streetful of honking psychopaths behind registering their disapproval of the time the transaction is taking, will have horror stories about the hundred that got away, or the twenty that you thought was ten.
But now relief is at hand – thanks to judicial activism. In November 2006 Federal Judge James Robertson, who seems puritanically unconcerned about us blind-drunk-in-a-cab types, but has ordered the Treasury to start working on how to make notes distinguishable for the actually blind.
The idea that the world is full of people who habitually cheat the blind when making change would be almost unthinkable if it were not a smaller scale version of what executives have been doing to shareholders for a decade with the stock options.
Government lawyers claimed that different size bills would make it harder to stop forgery. They are probably the ones who wrote about the virtues of the "now you see them, now you don't" watermarks. The remarkably cosmopolitan judge declared "Of the more than 180 countries that issue paper currency, only the United States prints bills that are identical in size and color in all their denominations."

There is an answer of course, and I must declare an interest. The Canadian gold stocks in my pension fund have been doing very well lately – but they should be doing better. Money is too important to be left to paper, bad designers and incompetent printers. The dollar needs some substance before it follows the lira and yen into multi-zeroed monetary grave. Bring back gold and silver coins and kill counterfeiting, change-kiting and devaluation in one fell swoop.