Money

If You Don't Need Those Big Bills, You Probably Don't Need Cash At All. Do You, Now?

Harvard and other elites take aim at any possibility of financial privacy in the name of curbing criminals flashing their big cash.

|

The elites know what they want: a trackable record of every transaction that happens on planet Earth. Those who stand in the way or object are just facilitating "bad guys." Some evidence this week from Harvard University, where Peter Sands, president emeritus of Harvard, has issued a new paper on the topic of "Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes."

The heart of Sands' argument:

Such notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved. By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption. Without being able to use high denomination notes, those engaged in illicit activities – the "bad guys" of our title – would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their "business models".

The argument could in all its particulars apply to cash in general. If it's dead wrong to allow "bad guys" to move their property across state lines in a potentially undetectable fashion when it is lighter than some elite thinks appropriately, why let them do it at all? Make sure there is a potentially state-viewable electronic record of everything. You aren't pro-crime, are you?

Time reports on the growing movement on authorities' part in both the European Union and the U.S. to crush those criminally convenient bills, noting that "In 2000, Canada got rid of its $1,000 bills and Singapore ditched its $10,000 bills" and that even the U.K's 50 pound note is in the crosshair.

Former Treasury Secretary Lawrence H. Summers is explicit in The Washington Post: the $100 bill must die, concluding, hooked off of the Sands' paper, that:

Even better than unilateral measures in Europe would be a global agreement to stop issuing notes worth more than say $50 or $100.  Such an agreement would be as significant as anything else the G7 or G20 has done in years. 

Given its implications for big state's power and willingness to smash any possibility of conducting transactions outside their all-seeing eye, that's true. Summers is positively pleased with his arguments and their implications. You can decide for yourself if you are as well, despite his insisting such a move would be "the global financial groupings [standing] up against "big money" and for the interests of ordinary citizens."

I don't know if it's scarier to think Summers is being cold-bloodedly Orwellian or if he actually believes that crap.

I wrote back in February 2014 on the bitterly amusing ironies of how state complaints against Bitcoin map complaints they might have about cash.

NEXT: Meet the Marijuana Industry's Newest Customers, Dogs: New Video at Reason.com

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Bad Guy = Anyone that wants to retain the fruits of their labor or innovation

    1. If you’ve got a $100 bill ? you didn’t print that. Somebody else made that happen.

  2. Since the most commonly used bill for drug transactions is the twenty I guess we should only print fives.

    1. Nobody needs anything more valuable than a nickel!

  3. You aren’t pro-crime, are you?

    Yes I am, I’m voting for Hilary.

  4. Why does anybody listen to what that fat hack thinks?

  5. Why would a criminal use high-denomination notes? They’re way harder to launder.
    Isn’t that why kidnappers always demand that the ransom be paid in “small bills”?

    You walk into a bank or a department store and try paying/depositing $1000 bills and that’s going to raise eyebrows.

    1. Gods damnit you beat me by mere seconds!!

      1. What’s this “Gods” crap? There’s only one God, brah, Our Lord and Saviour, Jesus Trump!

        1. Allah be praised

    2. Portability. The US $100 bill is the world’s currency for black market transactions. After it’s laundered, they definitely want $100s. $1000 bills have been gone for a long time. But 100s are kind of ideal because people do use them in ordinary transactions (which never was really the case with bigger bills) and they are 5x less bulky than $20s.

      1. The idea that we’re going to stop Bad Guys by taking away C-notes is just dumb. All they have to do is find something more valuable by weight and/or volume than $50 bills. Hell, at least bills have serial numbers, which makes them semi-traceable; gold, cocaine, etc. don’t even have that, although they are slightly less liquid.

        1. Yes, of course there will always be something that can be used as currency in the black market. It just happens that US $100s are one of the more convenient and generally accepted things at the moment.

  6. I thought the bad guys always wanted LOW denominations (you know, the bank robbers demand 5 million dollars in small, used, unmarked bills). That way it is easier to spend.

    You start passing around 5G bills, and someone will notice.

    1. You are thinking too small. Big time dealers and traffickers of drugs or other black market items definitely don’t want millions of dollars in $20s.

      1. You can’t spend $100s, though. Too many counterfeiters running around. A lot of places won’t accept them.

        1. …and because making change for a transactions where a $100 bill is used to pay for $5 or under purchase can clean out your entire till. Which is another reason that many convenience stores, etc, refuse to take them – takes time for the time-lock safe to kick out that new wad of cash.

          FWIW, using a large bill to make a small purchase is classic counterfeiter behavior.

        2. You also can’t buy large amounts of drugs with dirty $20s. That’s the point and why criminals use $100s.

        3. I spend $100s all the time. Grocers, liquor stores, restaurants, department and electronics stores bars all take them. Walmart tills often have $100s in them as I find when I get $100 cash back. Considering the debasement of the dollar the $500 should be reintroduced.

          1. Me too. And no one has ever told me they won’t take it.

  7. How many of us have ever held anything higher than a C-note? High denomination notes have very limited utilization. And it seems silly to argue that the government should print them such that citizens can hide transactions from the government. Let the government print what it will and focus instead on crypto-currencies.

    1. There has not been anything higher the C-note printed in years. My understanding is there are some of the high denomination bills still in use but they are used in high level bank transactions.

      1. There has not been anything higher the C-note printed in years. My understanding is there are some of the high denomination bills still in use but they are used in high level bank transactions.

        True.

    2. I’ve had a $500. But there aren’t a lot of them around these days. Big bills were pretty much for transferring money before wire transfers were a thing that everyone had access to.

  8. Funny how the people bitching most about lack of liquidity are the same morons trying to make large transactions more difficult.

  9. Too wordy….let’s just tighten this up a bit!

    Such notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved. By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption. Without being able to use high denomination notes, those engaged in illicit activities ? the “bad guys” of our title ? would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their “business models”.

    I really think that this conveys his real message a bit better don’t you think?

  10. Gold coins. Problem solved.

  11. Leave it to Larry Summers to come up with the most economically stupid idea possible.

    We should probably ONLY have high-denomination bills, anything smaller than a $50 should be replaced with coinage. The labor savings and the seignorage alone would be a boost to Treasury. The coin-haters would gladly switch to all-electronically-tracked transactions and the “bad guys” couldn’t hide with small denomination bills.

    1. The coin-haters would gladly switch to all-electronically-tracked transactions and the “bad guys” couldn’t hide with small denomination bills.

      1. I will hunt you down if this happens. I *hate* coins and I don’t want to switch to electronic transactions to avoid them.

      2. It would also make it harder for those ‘bad guys’ to run from the cops with pockets full of one and two dollar coins.

      3. OTOH it would quickly end the ‘wear your pants around your knees’ fashion trend – so that’s a plus.

      1. I expect that Woodchipper is one of those people who heard about who great it was that Canada made the Dollar coin work, but has never actually been there.

        Coinage may be cheaper for the government to mint, but it’s a massive inconvenience to the citizenry that has to carry it around in bags instead of in neatly folded bills in their wallet.

      2. OTOH it would quickly end the ‘wear your pants around your knees’ fashion trend

        You know, that’s been going on since the 80’s. I simply do not get it. I remember when black fashion was something that evolved so fast, it was hard to keep up with it.

    2. Fuck that.
      1) Coins are heavier.
      2) Coins don’t stack and fold neatly. You basically have to carry them around in a sack.
      3) coinage carried around in a sack is unsorted and takes longer to fish through to come up with the right denominations.

      Every time I go to Canada I come back with a purse weighted down with random loonies and twonies, and I have to dig around in the bottom of the purse to get them out, which causes the line at the register to slow down. Coins are a huge pain in the ass.

      1. I like coins and I hate dollar bills. As a compromise, how about getting rid of the cent and nickel and dollar bill and use dollar coins.

  12. You can’t get rid of cash – its impossible.

    1. You can get rid of fiat money sure – but that’s not all money.

    2. Money is anything people decide is useful to exchange value. Bitcoins are worthless – just numbers in a ledger – except that people trust them enough (and find them useful enough) to use as a recorder of who owes who what.

    3. Getting rid of large denomination cash bills doesn’t disrupt ‘the bad guy’s business plan’ all that much. Mexican drug dealers use high-priced artworks in addition to fiat currency. They can and will just shift to something else.

    And given that most of that money is spent right away (and not put in the bank – just the freezer), not having to break hundred dollar bills is more a *convenience* than an obstacle.

    Finally – all this to clamp down on things that a) shouldn’t have been illegal in the first place (and if they weren’t then wouldn’t be a problem requiring yet another solution) or b) will place undue burdens on legitimately honest people to combat things that happen on the margins – tax evasion and ‘terrorism’. You’re not going to get large tax evaders, you’re just going to get the people working at the lower end of the economic scale under the table.

    You know – they guys who aren’t going to be net taxpayers even if you tax them for the full amount of their income.

    1. Money is anything people decide is useful to exchange value. Bitcoins are worthless

      I explained this to my 10yo XY tax deduction when he was asking me what Bitcoins were and how they worked. I’m not sure it registered, but at the moment, I’m just laying groundwork.

      will place undue burdens on legitimately honest people to combat things that happen on the margins – tax evasion and ‘terrorism’.

      Legitimately honest people will either become “dishonest” or they’ll decide the law is immoral and trade in the shadows.

  13. Even better than unilateral measures in Europe would be a global agreement to stop issuing notes worth more than say $50 or $100 picking our noses. Such an agreement would be as significant as anything else the G7 or G20 has done in years.

    FTFLarry

  14. Larry Summers is at least predictable in being an authoritarian piece of shit.

    1. “don’t know if it’s scarier to think Summers is being cold-bloodedly Orwellian or if he actually believes that crap.”

      Is it permissible in polite company to use in this context the highly descriptive word, fascist.

  15. LOL, even Monopoly is bowing to the central bankers: http://www.avclub.com/article/…..omy-232281

    1. That’s a bad move. Monopoly is a pretty lousy game, really. The complicated equipment is half the charm.

  16. T-Money needs those big bills to lure in the poor Maine women so he can get them pregnant.

    1. I doubt it. The sheer number of children between trafficked — many of them from Maine — probably constitutes a currency until itself at this point. I can’t count the number of orphan-mongers I had to push out of the way to get to work this morning.

  17. I think people mentioning gold coins are hitting the nail on the head. They will mess around and try to get rid of notes and end up have the black market create a private currency. With no person directing it! ah spontaneous order.

  18. Who needs to drive a blue car? Blue cars should be banned.
    Who needs to have potatoes with their steak? Steak and potatoes should be banned.
    Who needs to sing? Singing should be banned.

    This inanity of the “who needs to X” argument never ceases to shock me.

  19. Before we worry about eliminating the $100 bill the Treasury Dept needs to eliminate the penny, nickel and dime. What a bunch of senseless coins that accumulate so quickly during transactions, but amount to nothing when piling them up on the table after work. Round off the coin system by making the quarter the smallest valued coin. 4 of them equal a dollar. The extra coins (penny, nickel, and dime) creates extra waste.

  20. The technology is so developed that we can watch videos, live streaming, TV serials and any of our missed programs within our mobiles and PCs. Showbox
    All we need is a mobile or PC with a very good internet connection. There are many applications by which we can enjoy videos, our missed programs, live streaming etc.

Please to post comments

Comments are closed.