(fwd) FC: Fed official wants expiration dates [...] for bills

t byfield tbyfield at panix.com
Wed Oct 27 08:15:17 PDT 1999


curiouser and curiouser...

cheers, t

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Date: Wed, 27 Oct 1999 10:28:29 -0400 To: politech at vorlon.mit.edu From: Declan McCullagh <declan at well.com> Subject: FC: Fed official wants expiration dates, tracking devices for bills

http://www.wired.com/news/politics/0,1283,32121,00.html

No Deposit, Less Return

by Declan McCullagh (declan at well.com)

3:00 a.m. 27.Oct.99.PDT

WASHINGTON -- US currency should

include tracking devices that let the

government tax private possession of

dollar bills, a Federal Reserve official says.

The longer you hold currency without

depositing it in a bank account, the less

that cash will be worth, according to a

proposal from Marvin Goodfriend, a senior

vice president at the Federal Reserve

Bank of Richmond.

In other words, greenbacks will get

automatic expiration dates.

"The magnetic strip could visibly record

when a bill was last withdrawn from the

banking system. A carry tax could be

deducted from each bill upon deposit

according to how long the bill was in

circulation," Goodfriend wrote in a recent

presentation to a Federal Reserve System

conference in Woodstock, Vermont.

The 34-page paper argues a carry tax will

discourage "hoarding" currency, deter

black market and criminal activities, and

boost economic stability during

deflationary periods when interest rates

hover near zero.

It says new technology finally makes

such a scheme feasible. "Systems would

have to be put in place at banks and

automatic teller machines to read bills,

assess the carry tax, and stamp the bills

'current,'" the report recommends.

Goodfriend said in an interview that banks

might place a kind of visible "date issued"

stamp on each note they distributed.

"The thing could actually stamp the date

when the bill comes out of the ATM," he

said.

[...]

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