Wednesday, March 30, 2011

Cayman Islands Issues New Series of Banknotes

Posted Wed, Mar 30th 2011, 18:52
(Grand Cayman - CITN) -

The Cayman Islands Monetary Authority (CIMA) will introduce a new series of banknotes, the D series, beginning the week of 4 April. The new series represents the first complete redesign of Cayman Islands banknotes since local currency was introduced in 1972, and incorporates innovative features to significantly increase protection against counterfeiting and to make the notes more durable.

All six denominations – the $1, $5, $10, $25, $50, and $100 banknotes – have been redesigned, carrying new images, patterns and, in the case of one denomination, a new colour. At the same time, many of the familiar elements of the previous notes have been kept for continuity.

Visually, the D series places heavy emphasis on the Cayman Islands’ environmental heritage, with most of the notes featuring indigenous fauna and flora from the three Islands. The jurisdiction’s expansion from its sea-faring tradition into a modern financial services centre is also depicted. Each note bears an updated portrait of Her Majesty Queen Elizabeth II, along with the Cayman Islands crest, and all the notes now carry an outline of Grand Cayman, Cayman Brac and Little Cayman. (Formerly, only the $25 had an image of the Islands.)

In keeping with the change brought about by the 2009 Constitution, the signature of the Minister of Finance now appears on each note, rather than that of the Financial Secretary as was the case with the C series of banknotes previous. The signature of CIMA’s Managing Director also appears on each note. The predominant colours of the C series have been kept, except for the $50, which is now predominantly purple.

The new family of notes has been in development since 2007. CIMA’s Chairman, Mr. George McCarthy, said: “The Board felt that it was timely to carry out a complete update of the banknotes, first, to modernise a design that had not changed substantially since the initial 1972 design, and, second, to take advantage of the latest security features available. Both the previous and current Cabinet agreed to this initiative. The length of the process, from conception to issuing, reflects how extensive the redesign has been and the many components of such a project.”

Premier and Minister of Finance, Hon. McKeeva Bush, has welcomed the new issue: “I am pleased with the design of these new banknotes, which are a stunning reminder of our Islands’ natural treasures. I am happy too that the new series is being issued under the auspices of the Ministry of Finance. This serves as a marker of our recently updated constitution while the Queen’s portrait acknowledges our continued British Overseas Territory status.”

As with all CI currency, CIMA will issue the new D series through the local retail banks. The issuing will be done on a phased basis. Managing Director, Mrs. Cindy Scotland, explained: “The public can expect to see the $5 and $25 notes first. The other denominations will follow as the notes that are now in circulation are gradually withdrawn from circulation. All previously-issued banknotes continue to be legal tender.”

Mrs. Scotland also noted the importance of the new security features: “Much thought and work went into enhancing the security elements and increasing the number of different features on each denomination.

While counterfeiters will always try, the new notes will be significantly harder to forge, especially if people know what to look for and are vigilant. I urge everyone to take time to get really familiar with the notes so they can better identify attempted counterfeits.”

During this week (28 March to 1 April) , CIMA is partnering with the Chamber of Commerce on Grand Cayman and District Administration on Cayman Brac to host training sessions on the new series for banks, retailers and law enforcement. A representative of the banknote printers, De La Rue, will lead these presentations. Throughout the coming weeks, CIMA will also disseminate informational material through the news media and in public places. This includes posters showing the denominations and flyers highlighting the notes’ visible security features. The posters will be on display in post offices and other high-traffic locations.

Additionally, the material will be accessible on CIMA’s website.

All six denominations ($1, $5, $10, $25, $50, and $100) of the new D series of Cayman Islands banknotes have been redesigned.

Each has its own unique features, while sharing certain facets with the other denominations. And, fulfilling one of the main purposes for the redesign, the series incorporates the latest security features to deter counterfeiters, a Cayman Islands Monetary Authority (CIMA) press statement said.

Colours and views

At first look, the most striking aspects of the banknotes are the images of Cayman wildlife and panoramas, and a colour palette that draws from the naturally occurring array of hues visible in the Cayman Islands. In addition, unlike other series, the notes of the D series do not have a border around the edges. Instead, the images and patterns run to the edge of the paper.

Using sea blue with violet and orange, the $1 shows a school of Angel fish on the front and an image of the Cayman Brac Bluff, viewed from sea level, on the reverse. The colour scheme of the $5 is dark green, with olive and bright greens. Hawksbill turtles swim on the front of the note and a pair of Cayman Parrots perch on the reverse. The $10 is predominantly bright red, with violet and dark grey highlights and a yellow-green centre. On the front are land crabs, while the reverse shows a plume of Wild Banana Orchids.

The main colours of the $25 are dark brown, with light brown and orange. Shells are scattered on the front and, on the reverse, a Hawksbill turtle glides above the reef. The $50 combines purples with hints of green and red. It carries images of stingrays on the front and a single stingray cruising through the water on the reverse. Orange, brown and red are the main hues of the $100. The front features a Cayman schooner, which historically was essential to trade and commerce in the Cayman Islands. Turning the note over, one fast-forwards to the present, to a recent aerial view of George Town.

Common features

There are a number of features common to the front of the notes. Each one bears HM the Queen’s portrait, the Cayman Islands crest, the outline of all three islands grouped together, and the signatures of the Minister of Finance and the Managing Director of the Monetary Authority.

The front of each banknote carries a unique serial number beginning with the letter D, which marks it as part of the D series. The serial number is printed near the top left, and bottom right corners of the notes. The digits of each number are progressively taller.

New to the front of the D series notes is a lace-patterned background screen covering the right-hand side of the note from top to bottom, and running horizontally across the top and bottom edges. There is also a darker, lace-patterned circle (the ‘mask’) on the front of each note near the right edge. (See Security Highlights, below, for the purpose of this mask.)

The lower denominations ($1, $5, $10) carry the metallic security window thread running in and out, from top to bottom near the centre of the notes. Users of Cayman currency should be familiar with the window thread from the C series. On the higher denominations ($25, $50, $100), instead of the window thread, there is a holographic stripe imprinted with the Cayman Islands crest, the number signifying the new banknotes combine Cayman vistas and state-of-the-art security features denomination and other images unique to the particular denomination. The holographic stripe runs from top to bottom near the centre of the notes.

Every banknote has the words “Cayman Islands Monetary Authority” printed on both front and back. The front and back also carry the denomination of the note, in number form as well as spelled out.

The back of each note is divided into three sections, each section framed by lace patterned screens. The centre carries a picture, while the areas to the left and right of the centre are clear except for a partially-completed image on the lower right and a single-colour outline image on the upper left. These two objects are known as the see-through image and the Gemini. Both are anti-counterfeit features.

Security Highlights

Some of the aesthetic modifications in the new series enhance the banknotes‟ protection from counterfeiters.

These and the other visible security features, when taken together, make it relatively easy for most people to tell the difference between Cayman Islands legal tender and counterfeit banknotes, if they look closely.

The readily-visible security features include:

•The serial number – This is different for each banknote.
•Metallic window security thread – This is a silver band, imprinted with the acronym „CIMA‟, weaving in and out from top to bottom on the front of the $1, $5 and $10 banknote.
•Holographic stripe – This is a feature on the front of the higher denominations ($25, $50, $100). It appears as a shimmery band running from the top of the note to the bottom. The band is imprinted with images including the Cayman Islands crest and the number 25, 50 or 100, depending on the denomination. When the note is tilted, one image appears to move in the background.

Other features become clearly visible when the banknotes are held up to the light or are tilted. These include:

•The turtle watermark – the outline of a turtle is visible on each denomination when the note is held up.
•The ‘CIMA’ Electrotype - similar to the watermark, the acronym „CIMA‟ becomes visible when the note is held to the light. On the lower three denominations ($1, $5, and $10), “CIMA‟ appears horizontally, above the turtle, while on the top three denominations ($25, $50, and $100) „CIMA‟ appears vertically, in front of the turtle.
•Embedded thread – This threat appears on the upper three denominations as a solid line when the note is when held up to the light.
•See-through images – On both the front and back of each note is an outline of an image that is partially filled-in. When the note is held up, the complete image becomes visible. Each denomination has its own see-through image.
•Iridescent band – This band runs from top to bottom on the front of the lower three denominations only. It becomes visible when the note is tilted.
•Latent image and mask– A dark horizontal band is present in the lower right section of each note, above the serial number. The denomination appears within this band when the note is viewed at a shallow angle in the light. For example, “$25‟ would appear on the $25 note. Similarly, the denomination appears within the dark, lace-patterned circle when the banknote is held up to the light.

Each denomination has a unique ultraviolet reactive image known as the “Gemini‟. In the natural light, the Gemini is seen as an outline of an object on the back of each note, near the top left-hand corner. However, when the note is placed under ultraviolet light a second colour appears.

Wednesday, March 16, 2011

Chile Unveiled the New 1 ,000 Peso Polymer Banknote

Merco Press
March 21, 2011

Like the new 2,000 and 5,000 peso banknotes, introduced in September 2009 and November 2010, respectively, the new 1,000 peso banknotes will be made of a durable polymeric material, and will have more security features to prevent counterfeit.

Such features include a transparent window showing the portrait of the portrayed hero on the right side of the banknote, as well as a 3D watermark bank located in the note’s left-hand side.

The drawings on the bill follow the pattern of other the recently introduced banknotes, showing a Chilean hero on the front and the landscape of a famous Chilean landmark on the back.

The front of the new banknote shows a portrait of Ignacio Carrera Pinto, a captain of the Chilean army during of the 19th century War of the Pacific against Bolivia and Peru.

The National Park of Torres de Paine—a world-renowned national park in Chile’s southernmost Magallanes Region—is showcased on the back.

The new bills will begin circulating on May 11, 2011, first to commercial banks and then, gradually, to ATM’s located throughout the country.

Monday, March 7, 2011

Japan 10 Yen 1930 Banknote on U. S. Propaganda leaflets of WWII

In the summer of 1945, Japan was showered almost daily by aerial leaflets in such quantity that the Japanese people developed a kind of apathy against them. A novel approach had therefore to be sought to attract renewed attention. The ingenious idea was to reproduce the face side of the then current 10-yen banknote and replace the back by a propaganda message. For who could resist money falling from the sky?

There are four different propaganda leaflets. All have the same exquisitely lithographed front to resemble closely the genuine Japan 10 Yen 1930 banknote but with different messages on the back.

One striking difference between the genuine bills and the counterfeit is that the former has red seal on the front whereas the latter has brown seal. The other difference is that all counterfeit bills bear the serial number 450941 and the block number 1124 on the front.

The purpose of the leaflets was to stir Japanese resentment against their government and to create fear of inflation.

Genuine 10 Yen note

U. S. Propaganda leaflet

Translation of message Code No. 2034:

In 1930, when the Gumbatsu (militarists) had not yet started the war in China, you could by the following items for 10 yen:
* 25 sho (about 20 Kg) of good rice.
* Or material for 8 summer kimonos.
* Or 4 bags (50 Kg packages) of charcoal.

In 1937, after the start of the China Incident, you could buy the following for 10 yen:
* 25 sho of low grade rice.
* Or material for 5 summer kimonos.
* Or 2 bags of charcoal.

Today, after waging three years of hopeless warfare with the world's greatest powers, you can buy the following with 10 yen:
* 1/2 sho of good rice in the black market.
* Or a small amount of charcoal, if you can get it.
* Cotton material, nothing.

This is what your leaders call co-prosperity.

Translation of message Code No. 2009:

The Gumbatsu is wasting your tax money. For this war the Gumbatsu has spent the equivalent of 5000 yen for every Japanese. Think what you could have done with that.
Every day the war continues more of your money is being wasted.

Translation of message Code No. 2016:

You have made much money up to now, but what good is it? You can buy little more with it than you can with this 10 yen.

Those who devote their total energies to war production are the same as soldiers. You are soldiers of production. But, do you get plenty of beer and rice? Do you receive specially distributed goods such as soldiers and their families receive?

Translation of message Code No. 2017:

What good is money in the bank or in bonds? Buy articles you need now and buy articles for future use. The remaining supply is low. As a result of the bombing by America, many of your stores will close their doors while others will be open only for limited periods. Buy food, clothing, and other necessities to tie you over these periods.

Money will not satisfy your hunger or cloth you. Bonds will not satisfy a baby's cry. A wise person would buy now, not save his money. The present is not a time for money. It is a period for goods.

Wednesday, March 2, 2011

The Origins of Government Paper Money

Murray N. Rothbard
Mises Daily
March 01, 2011

[This article is excerpted from A History of Money and Banking in the United States (2002). An MP3 audio file of this article, read by Matthew Mezinskis, is available for download.]

Apart from medieval China, which invented both paper and printing centuries before the West, the world had never seen government paper money until the colonial government of Massachusetts emitted a fiat paper issue in 1690.[1][2]

Massachusetts was accustomed to launching plunder expeditions against the prosperous French colony in Quebec. Generally, the expeditions were successful, and would return to Boston, sell their booty, and pay off the soldiers with the proceeds. This time, however, the expedition was beaten back decisively, and the soldiers returned to Boston in ill humor, grumbling for their pay. Discontented soldiers are ripe for mutiny, so the Massachusetts government looked around in concern for a way to pay the soldiers. It tried to borrow £3,000–£4,000 from Boston merchants, but evidently the Massachusetts credit rating was not the best.

Finally, Massachusetts decided in December 1690 to print £7,000 in paper notes and to use them to pay the soldiers. Suspecting that the public would not accept irredeemable paper, the government made a twofold pledge when it issued the notes: that it would redeem them in gold or silver out of tax revenue in a few years and that absolutely no further paper notes would be issued. Characteristically, however, both parts of the pledge went quickly by the board: the issue limit disappeared in a few months, and all the bills continued unredeemed for nearly 40 years. As early as February 1691, the Massachusetts government proclaimed that its issue had fallen "far short" and so it proceeded to emit £40,000 of new money to repay all of its outstanding debt, again pledging falsely that this would be the absolute final note issue.

But Massachusetts found that the increase in the supply of money, coupled with a fall in the demand for paper because of growing lack of confidence in future redemption in specie, led to a rapid depreciation of new money in relation to specie. Indeed, within a year after the initial issue, the new paper pound had depreciated on the market by 40 percent against specie.

By 1692, the government moved against this market evaluation by use of force, making the paper money compulsory legal tender for all debts at par with specie, and by granting a premium of 5 percent on all payment of debts to the government made in paper notes. This legal-tender law had the unwanted effect of Gresham's law: the disappearance of specie circulation in the colony. In addition, the expanding paper issues drove up prices and hampered exports from the colony. In this way, the specie "shortage" became the creature rather than the cause of the fiat-paper issues. Thus, in 1690, before the orgy of paper issues began, £200,000 of silver money was available in New England; by 1711, however, with Connecticut and Rhode Island having followed suit in paper money issue, £240,000 of paper money had been issued in New England but the silver had almost disappeared from circulation.

Ironically, then, Massachusetts's and her sister colonies' issue of paper money created rather than solved any "scarcity of money." The new paper drove out the old specie. The consequent driving up of prices and depreciation of paper scarcely relieved any alleged money scarcity among the public. But since the paper was issued to finance government expenditures and pay public debts, the government, not the public, benefited from the fiat issue.

After Massachusetts had emitted another huge issue of £500,000 in 1711 to pay for another failed expedition against Quebec, not only was the remainder of the silver driven from circulation, but, despite the legal-tender law, the paper pound depreciated 30 percent against silver. Massachusetts pounds, officially 7 shillings to the silver ounce, had now fallen on the market to 9 shillings per ounce. Depreciation proceeded in this and other colonies despite fierce governmental attempts to outlaw it, backed by fines, imprisonment, and total confiscation of property for the high crime of not accepting the paper at par.

Faced with a further "shortage of money" due to the money issues, Massachusetts decided to press on; in 1716, it formed a government "land bank" and issued £100,000 in notes to be loaned on real estate in the various counties of the province.

Prices rose so dramatically that the tide of opinion in Massachusetts began to turn against paper, as writers pointed out that the result of issues was a doubling of prices in the past 20 years, depreciation of paper, and the disappearance of Spanish silver through the operation of Gresham's law. From then on, Massachusetts, pressured by the British Crown, tried intermittently to reduce the bills in circulation and return to a specie currency, but was hampered by its assumed obligations to honor the paper notes at par of its sister New England colonies.

In 1744, another losing expedition against the French led Massachusetts to issue an enormous amount of paper money over the next several years. From 1744 to 1748, paper money in circulation expanded from £300,000 to £2.5 million, and the depreciation in Massachusetts was such that silver had risen on the market to 60 shillings an ounce, ten times the price at the beginning of an era of paper money in 1690.

By 1740, every colony but Virginia had followed suit in fiat-paper-money issues, and Virginia succumbed in the late 1750s in trying to finance part of the French and Indian War against the French. Similar consequences — dramatic inflation, shortage of specie, massive depreciation despite compulsory par laws — ensued in each colony. Thus, along with Massachusetts's depreciation of 11-to-1 of its notes against specie compared to the original par, Connecticut's notes had sunk to 9-to-1 and the Carolinas' at 10-to-1 in 1740, and the paper of virulently inflationist Rhode Island to 23-to-1 against specie. Even the least-inflated paper, that of Pennsylvania, had suffered an appreciation of specie to 80 percent over par.

A detailed study of the effects of paper money in New Jersey shows how it created a boom-bust economy over the colonial period. When new paper money was injected into the economy, an inflationary boom would result, to be followed by a deflationary depression when the paper money supply contracted.[3]

At the end of King George's war with France in 1748, Parliament began to pressure the colonies to retire the mass of paper money and return to a specie currency. In 1751, Great Britain prohibited all further issues of legal-tender paper in New England and ordered a move toward redemption of existing issues in specie. Finally, in 1764, Parliament extended the prohibition of new issues to the remainder of the colonies and required the gradual retirement of outstanding notes.

Following the lead of Parliament, the New England colonies, apart from Rhode Island, decided to resume specie payment and retire their paper notes rapidly at the current depreciated market rate. The panicky opponents of specie resumption and monetary contraction made the usual predictions in such a situation: that the result would be a virtual absence of money in New England and the consequent ruination of all trade. Instead, however, after a brief adjustment, the resumption and retirement led to a far more prosperous trade and production — the harder money and lower prices attracting an inflow of specie. In fact, with Massachusetts on specie and Rhode Island still on depreciated paper, the result was that Newport, which had been a flourishing center for West Indian imports for western Massachusetts, lost its trade to Boston and languished in the doldrums.[4][5]

In fact, as one student of colonial Massachusetts has pointed out, the return to specie occasioned remarkably little dislocation, recession, or price deflation. Indeed, wheat prices fell by less in Boston than in Philadelphia, which saw no such return to specie in the early 1750s. Foreign-exchange rates, after the resumption of specie, were highly stable, and "the restored specie system operated after 1750 with remarkable stability during the Seven Years War and during the dislocation of international payments in the last years before the Revolution."[6]

Not being outlawed by government decree, specie remained in circulation throughout the colonial period, even during the operation of paper money. Despite the inflation, booms and busts, and shortages of specie caused by paper issues, the specie system worked well overall:

Here was a silver standard … in the absence of institutions of the central government intervening in the silver market, and in the absence of either a public or private central bank adjusting domestic credit or managing a reserve of specie or foreign exchange with which to stabilize exchange rates. The market … kept exchange rates remarkably close to the legislated par …. What is most remarkable in this context is the continuity of the specie system through the seventeenth and eighteenth centuries.[7]

Private Bank Notes

In contrast to government paper, private bank notes and deposits, redeemable in specie, had begun in western Europe in Venice in the 14th century. Firms granting credit to consumers and businesses had existed in the ancient world and in medieval Europe, but these were "money lenders" who loaned out their own savings. "Banking" in the sense of lending out the savings of others only began in England with the "scriveners" of the early 17th century. The scriveners were clerks who wrote contracts and bonds and were therefore in a position to learn of mercantile transactions and engage in money lending and borrowing.[8]

There were, however, no banks of deposit in England until the civil war in the mid-17th century. Merchants had been in the habit of storing their surplus gold in the king's mint for safekeeping. That habit proved to be unfortunate, for when Charles I needed money in 1638, shortly before the outbreak of the civil war, he confiscated the huge sum of £200,000 of gold, calling it a "loan" from the owners. Although the merchants finally got their gold back, they were understandably shaken by the experience, and forsook the mint, depositing their gold instead in the coffers of private goldsmiths, who, like the mint, were accustomed to storing the valuable metal. The warehouse receipts of the goldsmiths soon came to be used as a surrogate for the gold itself. By the end of the civil war, in the 1660s, the goldsmiths fell prey to the temptation to print pseudo warehouse receipts not covered by gold and lend them out; in this way fractional-reserve banking came to England.[9]

Very few private banks existed in colonial America, and they were short-lived. Most prominent was the Massachusetts Land Bank of 1740, issuing notes and lending them out on real estate. The land bank was launched as an inflationary alternative to government paper, which the royal governor was attempting to restrict. The land bank issued irredeemable notes, and fear of its unsound issue generated a competing private silver bank, which emitted notes redeemable in silver. The land bank promptly issued over £49,000 in irredeemable notes, which depreciated very rapidly. In six months' time the public was almost universally refusing to accept the bank's notes and land-bank sympathizers vainly accepting the notes. The final blow came in 1741, when Parliament, acting at the request of several Massachusetts merchants and the royal governor, outlawed both the land and the silver banks.

One intriguing aspect of both the Massachusetts Land Bank and other inflationary colonial schemes is that they were advocated and lobbied for by some of the wealthiest merchants and land speculators in the respective colonies. Debtors benefit from inflation and creditors lose; realizing this fact, older historians assumed that debtors were largely poor agrarians and creditors were wealthy merchants and that therefore the former were the main sponsors of inflationary nostrums. But, of course, there are no rigid "classes" of debtors and creditors; indeed, wealthy merchants and land speculators are often the heaviest debtors. Later historians have demonstrated that members of the latter group were the major sponsors of inflationary paper money in the colonies.[10][11]

[1] Government paper redeemable in gold began in the early 9th century, and after three centuries the government escalated to irredeemable fiat paper, with the usual consequences of boom-bust cycles, and runaway inflation. See Gordon Tullock, "Paper Money — A Cycle in Cathay," Economic History Review 9, no. 3 (1957): 393–96.

[2] The only exception was a curious form of paper money issued five years earlier in Quebec, to become known as "card money." The governing intendant of Quebec, Monsieur Mueles, divided some playing cards into quarters, marked them with various monetary denominations, and then issued them to pay for wages and materials sold to the government. He ordered the public to accept the cards as legal tender, and this particular issue was later redeemed in specie sent from France.

[3] Donald L. Kemmerer, "Paper Money in New Jersey, 1668–1775," New Jersey Historical Society, Proceedings 74 (April 1956): 107–44.

[4] Before Massachusetts went back to specie, it was committed to accept the notes of the other New England colonies at par. This provided an incentive for Rhode Island to inflate its currency wildly, for this small colony, with considerable purchases to make in Massachusetts, could make these purchases in inflated money at par. Thereby Rhode Island could export its inflation to the larger colony, but make its purchases with the new money before Massachusetts prices could rise in response. In short, Rhode Island could expropriate wealth from Massachusetts and impose the main cost of its inflation on the latter colony.

[5] If Rhode Island was the most inflationary of the colonies, Maryland's monetary expansion was the most bizarre. In 1733, Maryland's public land bank issued £70,000 of paper notes, of which £30,000 was given away in a fixed amount to each inhabitant of the province. This was done to universalize the circulation of the new notes, and is probably the closest approximation in history of Milton Friedman's "helicopter" model, in which a magical helicopter lavishes new paper money in fixed amounts of proportions to each inhabitant. The result of the measure, of course, was rapid depreciation of new notes. However, the inflationary impact of the notes was greatly lessened by tobacco still being the major money of the new colony. Tobacco was legal tender in Maryland and the paper was not receivable for all taxes.

[6] Roger W. Weiss, "The Colonial Monetary Standard of Massachusetts," Economic History Review 27 (November 1974): 589.

[7] Ibid., p. 591.

[8] During the 16th century, before the rise of the scriveners, most English moneylending was not even conducted by specialized firms, but by wealthy merchants in the clothing and woolen industries, as outlets for their surplus capital. See J. Milnes Holden, The History of Negotiable Instruments in English Law (London: Athlone Press, 1955), pp. 205–06.

[9] Once again, ancient China pioneered in deposit banking, as well as in fractional-reserve banking. Deposit banking per se began in the 8th century AD, when shops would accept valuables, in return for warehouse receipts, and receive a fee for keeping them safe. After a while, the deposit receipts of these shops began to circulate as money. Finally, after two centuries, the shops began to issue and lend out more receipts than they had on deposit; they had caught on to fractional-reserve banking. Tullock, "Paper Money," p. 396.

[10] On the Massachusetts Land Bank, see the illuminating study by George Athan Billias, "The Massachusetts Land Bankers of 1740," University of Maine Bulletin 61 (April 1959). On merchant enthusiasm for inflationary banking in Massachusetts, see Herman J. Belz, "Paper Money in Colonial Massachusetts," Essex Institute, Historical Collections 101 (April 1965): 146–63; and Herman J. Belz, "Currency Reform in Colonial Massachusetts, 1749–1750," Essex Institute, Historical Collections 103 (January 1967): 66–84. On the forces favoring colonial inflation in general, see Bray Hammond, Banks and Politics in America (Princeton, N.J.: Princeton University Press, 1957), chap. 1; and Joseph Dorfman, The Economic Mind in American Civilization, 1606–1865 (New York: Viking Press, 1946), p. 142.

[11] For an excellent biographical essay on colonial money and banking, see Jeffrey Rogers Hummel, "The Monetary History of America to 1789: A Historiographical Essay," Journal of Libertarian Studies 2 (Winter 1978): 373–89. For a summary of colonial monetary experience, see Murray N. Rothbard, Conceived in Liberty, vol. 2, Salutary Neglect, The American Colonies in the First Half of the Eighteenth Century (New Rochelle, N.Y.: Arlington House, 1975), pp. 123–40. A particularly illuminating analysis is in the classic work done by Charles Jesse Bullock, Essays on the Monetary History of the United States (New York: Greenwood Press, [1900] 1969), pp. 1–59. Up-to-date data on the period is in Roger W. Weiss, "The Issue of Paper Money in the American Colonies, 1720–1774," Journal of Economic History 30 (December 1970): 770–84.

About the Author

Murray N. Rothbard (1926–1995) was dean of the Austrian School. He was an economist, economic historian, and libertarian political philosopher.

Tuesday, March 1, 2011

Lesotho Issued New Set of Banknotes March 1, 2011

March 1, 2011

The Central Bank of Lesotho issued new design 10, 20, 50 and 100 Maloti banknotes today.

The decision to launch the new currency was meant to halt the spread of counterfeit notes in Lesotho. The new banknotes have high tech security features which were designed to make it difficult to forge the currency.

The new banknotes feature a portrait of the three royal family members: the current king, His Majesty Letsie III is in the middle, his father King Moshoeshoe II is on the left, with the founder of the Basotho nation, King Moshoeshoe I, on the right.

What Does One Trillion Dollars in $100 Bills Look Like ?

This interesting pictorial representation of one trillion U. S. dollars first appeared on website. Reprinted here courtesy of

All this talk about "stimulus packages" and "bailouts"...

A billion dollars...

A hundred billion dollars...

Eight hundred billion dollars...

One TRILLION dollars...

What does that look like? I mean, these various numbers are tossed around like so many doggie treats, so I thought I'd take Google Sketchup out for a test drive and try to get a sense of what exactly a trillion dollars looks like.

We'll start with a $100 dollar bill. Currently the largest U.S. denomination in general circulation. Most everyone has seen them, slighty fewer have owned them. Guaranteed to make friends wherever they go.

A packet of one hundred $100 bills is less than 1/2" thick and contains $10,000. Fits in your pocket easily and is more than enough for week or two of shamefully decadent fun.

Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.

While a measly $1 million looked a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet...

And $1 BILLION dollars... now we're really getting somewhere...

Next we'll look at ONE TRILLION dollars. This is that number we've been hearing so much about. What is a trillion dollars? Well, it's a million million. It's a thousand billion. It's a one followed by 12 zeros.

You ready for this?

It's pretty surprising.

Go ahead...

Scroll down...

U.S. National Debt in $100 bills

After seeing What does one TRILLION dollars look like?, I've gotten quite a few requests to translate that into the U.S. National Debt, currently 11 trillion dollars as of March, 2009.

So here you go, the U.S. National Debt in $100 dollar bills...