[Dave Birch] The poor old greenback (ie, the Federal Reserve note, or FRN, not the scaled sardine of the same name) is under assault from all sides. We’ve noted before the unusual fact about U.S. currency that most of it isn’t in the U.S. In fact about $450 billion of the $760 billion in circulation as of December 2005 is held abroad. And the Federal Reserve report on the use and counterfeiting of United States Currency Abroad says that about 1 in 10,000 of the FRNs in circulation is counterfeit, the same as in the U.S. So the FRN seems to work pretty well, but there are some people around who want to change it.

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As our friends at Javelin point out, the U.S. Mint is nothing if not persistent in its efforts to make $1 coins catch on with consumers. It is rolling out new one-dollar coins with images reflecting various noteworthy presidents. This follows two previous unsuccessful and obviously costly attempts. The reason they’re doing it is that coins are cheaper for governments to produce than paper currency (to the tune of about $500 million annually in printing costs, according to Martin Crutsinger, AP Economics Writer) because they last longer. Of course, society would save even more money by getting rid of notes and coins, but that’s another issue.

Anyway, as I predicted last week, it may not be economics that does for the greenback after all, but disability legislation. A U.S. District Judge has ruled that the Treasury Department has violated the law and ordered the government to develop ways for the blind to tell bills apart. My suggestion would be to abolish $1 bills and replace them with coins, abolish $5 bills, keep the $10 and abolish all the others. If all bills are $10, problem solved. What do you need higher value bills for? As Andy Warhol said, “if you give anybody a hundred dollar bill in the supermarket they call the manager.”

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