R. A. Hettinga wrote: >. . . >Right, though I'm sure you're wishing it wasn't. Again, crime, >illegal markets if you will are piddly bits of pocket fluff in the >global economy. $4 trillion worth of foreign exchange alone happened >today. Criminal activity is in the tens of billions, max, a year. > . . .
Um, that $4 trillion didn't move around in trucks speeding on highways. It's just a bunch of marks on hard drives and very little money actually changed owners. Already electronic. Already secure. Extremely mobile. As the article excerpted below states, in 2001 there was about $620 billion dollars in US currency out there somewhere and 65% was in $100 dollar bills. ===== " . . . Why hasn't paper and metal currency already gone the way of the horse and buggy? With credit and debit cards, online banking, and so on, why isn't the demand for currency steadily shrinking to zero?" This from the IMF quarter newsletter "Finance" in the article "The Surprising Popularity of Paper Currency" by Kenneth S. Rogoff at http://www.imf.org/external/pubs/ft/fandd/2002/03/rogoff.htm which continues: "Curiously, all prognostications about Internet money to the contrary, there is not a shred of evidence that the public is about to give up currency in the United States, Europe, or Japan. Indeed, evidence of the reverse is stunning. "Let's start with the United States. At the end of 2001, currency per capita (held by the public) exceeded $620 billion, or roughly $2,200 for every man, woman, and child. I don't know about you, but I usually don't carry one-tenth that much currency in my wallet, nor does my brother Harry. Moreover, over 65 percent of it was held in $100 bills (the largest denomination), which means that the typical American family should be holding sixty $100 bills. Yet Federal Reserve Board surveys find that, on average, the typical American family does not hold even a single $100 bill! "Where is the missing money? Some of it can be found in obvious places like supermarket cash registers, but only a very little, according to extensive government surveys. In fact, surveys of domestic households and businesses can account for only 5 percent of the U.S. currency in circulation. Where is the rest, the other 95 percent? A big chunk is probably held abroad, though estimates vary wildly from 30 percent to 75 percent (my 1998 Economic Policy article estimated 50 percent). Even if the number is at the high end, say, 75 percent, that still leaves $2,200, held domestically within the United States, for every family of four. Economists presume that most of this cash can be found in the 'underground economy.'"
