Quote:
Originally Posted by pvande55
Or for criminal purposes. $1000 bank notes were discontinued because they were mainly used for bribes or transactions between bootleggers.
|
In the USA a total of $5.68 billion worth of banknotes were printed in 1928 and 1934 in so called "high denominations". About 82% was printed in $500 and $1000 banknotes, and the last 18% were printed in $5000 and $10000 denominations. These banknotes represented about $45 per person in the USA at a time when many people did not have $45.
In a world without electronic transfers of money these large value banknotes were needed by businessmen and banks. In WWII the volume of banknotes was increased dramatically as the government went into massive deficit spending to pay for the war effort, but no notes above $100 were printed. Finally in 1969 the federal government formally said they would never print any more notes above $100 and they would destroy any banknotes submitted by banks to the Bureau of Engraving and Printing. By this time most of the notes had vanished into the memorabilia market. They are still legal tender, but are generally worth more than their face value as collectibles.
Canada printed their $1000 banknote right up until May 12, 2000, when they were discontinued at the request of the Royal Canadian Mounted Police. Any $1,000 note deposited at a bank is destroyed, although the bills — nicknamed “pinkies” by gangsters because of the pinkish-purple ink — remain legal tender. There are nearly a billion dollars in pinkies still in circulation, most in the hands of criminal elites. “They are used now to pay off IOUs, not as traditional cash. They are used for buying and selling but not for cashing, because they know if they cash them, it is traceable”.
In 1907, the Swiss National Bank took over the issuance of banknotes from the cantons and various banks. It introduced denominations of 50, 100, 500 and
1000 francs. As Switzerland grew in wealth the value of the 1000 franc note frequently is worth more than $1000. At present it is worth about $1010. The Swiss bank circulates a large number of these banknotes, but since they are so distinctive they are probably not used as much for money laundering, but more for hoarding by Swiss and non Swiss citizens. The Swiss have the largest amount of currency per capita of any country in the world (over $7000).
The 1000 Deutsch Mark banknote began in 1960, and like the Swiss franc the DM increased against the dollar. When the Euro was created since the exchange was roughly 2 DM= 1 Euro, the Germans insisted that a 500 Euro banknote be created. Of course, now 300 million of them are circulating, which is far more than the value of the entire German currency before the Euro was adopted. Most of them are fueling criminal activities and are thought to be in large numbers in Spain and Italy and southern France where they are used by the drug trade. Britain has legally banned the 500 Euro note from being bought and sold in the UK.
Defenders of large value banknotes claim that high value banknotes are not necessarily used for crime. Of course they aren't. They are valued by normal citizens for the same reasons criminals value them. But most non-criminal activity can use other options.
Although Swedens 1000SEK note is not particularly high valued compared to many banknotes, Sweden is the first and only country AFAIK to systematically remove over 90% of such a mid-value banknote from circulation.
The peak number in circulation was as far back as 2001, after almost every country ramped up currency in circulation because of Y2K fears.
To show you how extraordinary that is think of New Zealand. Like Sweden it is a small country that prides itself on using mostly electronic transactions. Their largest banknote is NZ$100=574SEK so it is not as valuable as the 1000SEK banknote, but they don't have as high of a GDP per capita.
In 2001 they had NZ$776,808,000 in the NZ$100 banknote in circulation. By 2015 they have NZ$1,844,828,000.
Or look at the British £50 banknote.
The Sir Christopher Wren £50 note was issued on 20 March 1981 and withdrawn on 20 September 1996.
The Sir John Houblon £50 note was issued on 20 April 1994 and withdrawn on 30 April 2014.
The Matthew Boulton & James Watt was issued on 2 November 2011 and is still in use
The £50 circulated in very small quantities (as few as 2 per capita within the last ten years). But instead of withdrawing it in favor of electronic transactions, the Bank of England came out with a new version and is increasing circulation.
So what Sweden did is unique.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Eventually it will be difficult in Sweden to hire prostitutes, avoid taxes, pay illegal immigrants, buy drugs, close your bank account, have a run on the bank, cheat on your wife, or any of the other activities that are more easily done with cash. Actually, prostitution is illegal, so you can use your credit card, but you may have to explain that to your wife.
