Political Economy & The State
Big Bills

How Western central bankers and Treasury Secretaries cater to illicit drug syndicates, money-launderers, racketeers, and kleptocrats.

Appeared in: Volume 9, Number 6 | Published on: June 17, 2014
James S. Henry is senior economic adviser to the Tax Justice Network and senior fellow at Columbia University’s institute for sustainable international investment.
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  • george999

    A reason for the increase in use is simply inflation. You could buy things in the 1970’s with $20 or $50 that now take $100.

    Try buying anything of value such as a used car from many individuals with anything except cash. Many people want cash not because of tax fraud but in order to not worry whether a cashier’s check is counterfeit. That would mean carrying and counting a briefcase full of $20 bills just to buy an old car.

    I find it much easier to consider someone’s point of view when they openly state both the pros and cons rather than try to blatantly pretend it is all one-sided in their favor.

    • Bruce

      Good point. In addition, coin dealers like $100 bills too.

  • Pait

    Inflation is also the answer to the problem: it works as an effective tax on holders of large amounts of cash. If you can’t beat them, tax them.

  • Breif2

    Shorter version: Big Brother finds cash inconvenient. Too difficult to trace and confiscate.

    “many high-net-worth investors, especially from countries with a history of banking crises, expropriations, and political instability, also preferred to keep a share of their diversified portfolios in relatively tangible, transportable physical assets like these reserve currencies, plus gold, precious gems, and art.”

    The horror! Why can’t they be good little subjects and submit to the whims and depredations of their corrupt governments? (By the way 1, this phenomenon is hardly limited to “high-net-worth investors”. By the way 2, I homiletically note that US currency contains the phrase “In God we trust”. God, not arbitrary governments.)

    “So what we have now is the reserve currency equivalent of ‘tax competition.'”

    Ah, yes, that dreaded tax competition, another bugbear of the Tax Justice Network. I’m beginning to think that their motto is “Citius, Altius, Fortius”.

    “For example, even though no new Canadian $100 bills have been issued since 2000”

    This is absolutely false. Much of the facts presented by Henry I have to take on faith. When one of the few facts I can actually check is wrong, heretical thoughts ensue.

  • circleglider

    US$ 100 bills “serve no purpose for ordinary retail transactions back home?”

    What Ivory Tower does James Henry live in? Cambridge or Fort Meade?

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