Why hasn’t the government released bills bigger than $100, considering the various products nowadays that go above $1000? What kind of changes will we see and what kind of impact would it have?
Edit: By government, I mean US Government. thanks for pointing the ambiguity out!
In: Economics
For every day transactions very little will change. Most shops won’t accept the larger bills because keeping change for it is a nightmare and the risk of accepting a counterfeit version becomes proportionally greater. So if they had larger bills basically a few jokers will get them, and an overwhelming majority will never see or use one.
For tax dodgers, money launderers and people funding illegal activities however, their storage issues for large amounts of capital becomes much more manageable. The logistics of hoarding large amounts of cash wealth becomes quite complicated once your criminal activities scale up – I think there was some trivia that Pablo Escobar was spending $2500 on elastic bands every month. The higher the denominations available, the more manageable this becomes.
This gives a good summary about the money laundering and illegal activity funding benefits of larger denominations:
http://news.bbc.co.uk/2/hi/8678979.stm
Latest Answers