On Mon, Jan 23, 2012 at 5:07 PM, Andre Manoel <[email protected]>wrote:
> On Mon, Jan 23, 2012 at 1:08 PM, Srini RamaKrishnan <[email protected]> > wrote: > > > > The scale isn't much, but the quality was something else. Experts took > hours to tell apart fake from real. In effect it doesn't matter - the > current design of Indian notes will need to be taken out of service - a > cost of hundreds of billions of dollars. > > I doubt very much that replacing every banknote in a country, even one > as big as India, would cost anything above 2 orders of magnitude less > than that figure. I'd guess even 1 billion dollars is stretching it. > Banknotes have an average life of about 2 years (according to > > http://www.delarue.com/ProductsSolutions/BanknoteProduction/TheBanknoteLifecyc/ > ), > so the cost wouldn't be much above what is already spent on replacing > current banknotes. Depends on how clean you want the place afterwards. If you can tolerate a few hundred thousand stray fakes then you are right. All of this is about confidence really. One could keep mum about the whole thing and hope no one finds out, in which case you've effectively let the counterfeiters fund the costs of the central bank in printing new mint currency. Apart from all the bad wealth that gets created, which one could argue India has no shortage of already, all you are doing is letting the fakes carry your water for you. War too is about confidence. In a way I am glad the media is keeping relatively quiet on this issue - as long as no one takes serious offense everyone can pretend nothing happened and no insult has been handed. Modern economics has mostly mastered the art of reassuring everyone that everything is ok all of the time. Modern politicians are quickly catching on.
