Freedom of Expression
Counterfeit Dollar
Recent information shows that US government is going to print counterfeit Dollar to solve home problem. Since at home value of Dollar is by fiat standard, it does not matter but that action shall have repercussions on international market since a part of that counterfeit Dollar is expected to be moving out and if that happens value of Dollar will reduce creating problems in balance of payment for all the countries who depend on Dollar and that includes almost all countries. Another matter that worries people is more serious. According to that US government is likely to print 5 trillion Dollars in that process. Considering the total US value at about 17 trillion this 5 trillion makes a big addition. Some observers say that even if small portion say, about 1 trillion Dollar leak out of the country it will create mayhem in the international market. China has clearly shown its concern about this possibility and it gave open expression to that at recently held G20 meet. We shall see now other possibilities in this context.
During president Nixon’s time counterfeit currency problem had appeared and at that time private parties in the US were accused of having printed Dollar and distributed in the international market through tourists from USA. If I am not mistaken at that time it was estimated that a few million Dollars were printed and distributed in the world. Even that had created chaos however, with firm hand US suppressed the matter but as a result Nixon had to suffer. I am citing this because at present the situation is much more severe and if as I believe private US printers print a few trillions of counterfeit Dollars and distribute what could be the condition of the international market?
Let bus visualized what would happen if counterfeit Dollars have effect in the world market.
For the sake of simplicity, we shall consider that, the same modus operandi will be used by these US private printers which, they used during Nixon’s time. These printers are not ordinary people but closely connected to the US senators and so it is not easy to control them. As we have criminals in our parliament so are there in US Senate quite a few doubtful characters. During the time of Nixon they distributed the bogus currency in various strategically important countries such as Japan, Australia, New Zealand, Indonesia, Panama, Ecuador, Taiwan, Saudi Arabia, Colombia, Iran, Pakistan, Briton and European countries, Korea, Singapore and Malaysia. If now they come with counterfeit Dollar one more country we have to add to the list and that will be China.
How the method works
The purpose of sending these counterfeit Dollars out side US is very clear; if they distribute it in the US the Banks of the country shall immediately discover them due to sophisticated technology available with them and they will be caught. However, if this counterfeit Dollar is sent out side the US it is not possible to immediately notice the fraud and it is believed that that Dollar keeps moving in those countries for at least two to five or even more years and as such a lot of time has passed by the time that Dollar comes back in US and so they escape the law.
A paper currency can withstand about 300 handlings that mean a currency note can pass through about 300 transactions before it is worn out so much so that it needs to be returned to the source. During these 300 or more transactions the Dollar will move many places and it is impossible to trace the beginning point as a result the original person who has used it cannot be traced that means it is impossible to catch the culprit. With this method a large amount of counterfeit currency can be distributed all over the world. I was told by one knowledgeable person that US is in practice in printing counterfeit currencies of other countries and it uses this strategy to its advantage. People involved in that activity are the one who will this time print and distribute Dollar. The evil US created to play with economies of other countries is now going to return to US may be due to some freak law of nature that says, “what you do to others returns to you”.
As far as Dollar printed by the government of US and expected to be used within the state the fear of it leaking out can be controlled by making that counterfeit Dollar look different; say making it look pink instead of green. By such precautions that can be avoided and so the fear China and other countries expressed can by answered but what to do with this other counterfeit Dollar that shall come from private printers? I do not see any full proof solution to this problem. Other observers visualized many other possibilities about these Dollars. When it will become clear that a large amount of counterfeit Dollar is in the circulation many banks will prefer to quietly pass it to other users and the market to avoid any trouble due to its being proved to be counterfeit. Usually a bank is supposed to pass the Dollar to US Bank and claim the payment but since they all shall know that they are loaded with a large sum of bogus money and if they go to US Bank they will get nothing and that means sheer loss; in that situation smart bankers will prefer to pass the money into the market and not to the US Banks. This way the bogus currency will continue to roll in the world market for a long time creating many problems of balance of payment since the money is not coming back to the banks. Exactly this had happened during Nixon’s time.
In case US sternly controls any possibility of such printing within the US limits; one more possibility is that some African countries can support such printing of counterfeit Dollar and if such a thing happens it will be not possible to control this Dollar by US government; since the printer is out side the country.
What to do?
We don’t know real remedy for this but best way to resolve this problem is to develop Dollar free economy. Easy said than done! It is not so easy to achieve that at present time. As we see, the method is to spread this bogus Dollar through the tourists; it will be good not to take any Dollars from these tourists but to demand credit cards for payment. This may create many problems for all since quite a few are genuine tourists and carrying genuine Dollars. If any attempt is made to educate traders about this possibility it may create havoc in the market.
If as I believe African states begin to print Dollars many black tourist will be seen carrying large sum of Dollars and moving as tourist in many countries spending that money to buy expensive jewellery and such valuable goods. They shall carry that wealth back to their country and that way the world will be fooled. Poor African countries such as Burkina Faso are likely to benefit by that. Countries like South Africa and Middle East will be infested by these African tourists who will spend Dollar to buy gold, silver and such expensive and resalable merchandise. They will not stay in expensive hotel but prefer to stay in ordinary places; they will spend maximum money on these purchases because actually they are sent by the printers of the Dollars, they not being real tourists. The process is simple, they carry the precious goods to their destination and there they will give the part to the printer keeping their share of the loot. This way counterfeit Dollar printer will create fabulous wealth out of scrap paper. Luckily for the world these black tourists may not be able to move freely in other parts of the world probably because they will not be accepted easily but that does not deter the printers, they will send white people (poor Hispanics) who are accepted freely and in many places even revered! The loot will continue till the fraud is exposed. One other possibility is that al-Qaeda people may take the opportunity and join the counterfeiting. I estimate that the fraud will become evident by about 2016, and then a big crash in the world economy, depending upon Dollar, will be effective. That will be the end of Dollar and US supremacy on the world economy!
Today we see tendency of traders to stock Dollar, as we all believe that it is a reliable currency, not realizing the possible danger in keeping such currency. Under the circumstance advice is to spend the Dollar as soon as it comes to you. It is safer to keep less important but reliable currencies like Rupee or Euro but not Dollar. The world may not accept the suggestion but only time will prove me correct.
To my surprise the cost for the printing press and other accessories to print quality Dollar is not more than, just 27 lakhs rupees only.
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