Dec 7, 2010

The Fed has a $110 Billion problem with new $100 bills

From a CNBC report:

A significant production problem with new high-tech $100 bills has caused government printers to shut down production of the new notes and to quarantine more than one billion of the bills in huge vaults in Fort Worth, Texas and Washington, DC.

The new bills were initially scheduled for release in April.

With great fanfare officials announced the new bills would incorporate sophisticated high-tech security features designed to foil counterfeiters.

They were to have a 3-D security strip and a color-shifting image of a bell.

But the production process is so complex, it has foiled the government printers before getting the chance to foil counterfeiters.

1.1 billion of the new bills have been printed, but they are unusable.

The total face value of the unusable bills, $110 billion, represents more than ten percent of the entire supply of US currency on the planet.

According to a person familiar with the matter, the bills are the most costly ever produced, with a per-note cost of about 12 cents—twice the cost of a conventional bill. That means the government spent about $120 million to produce bills it can’t use and will need to burn the 110 billion dollars!

Perhaps it is significant that this administration fiasco involves the very first bills to have Timothy Geithner's signature.