NOT_100

[John Young <jya@pipeline.com>]

   The New Yorker of October 23 reports on the "Supernote,"
   a perfect counterfeit $100-bill allegedly being used for
   economic terrorism.

      The Supernote had surfaced around 1990 and originated in
      the Middle East. It was no ordinary counterfeit. The
      workmanship was extraordinary. When a sample first
      arrived at the Secret Service's laboratory, a top
      technical analyst "examined it the way he has every
      other counterfeit note in the world, and called it
      genuine." Most alarming of all, the Supernote was so
      well engineered that it could fool currency scanners at
      the nation's twelve Federal Reserve banks.

      Today, the Supernote remains one of the longest unsolved
      counterfeiting cases in the modern history of the Secret
      Service, and it has begun to undermine international
      confidence in United States currency.

      The Treasury, taking its cue from the Federal Reserve,
      has a difficult time regarding counterfeiting, even on
      a very large scale, as a macroeconomic problem, because
      cash is a relatively small percentage of the total money
      supply. Wire transfers, checks, and credit-card
      transactions, after all, run into the trillions.
      Counterfeiting becomes significant to the Fed only if it
      undermines confidence in the dollar.

      Dozens of interviews with high-level insiders left the
      impression that the Federal Reserve and the Treasury
      don't fear the Supernote itself as much as they fear a
      confidence problem that might result if they publicly
      acknowledge it and countenance a large-scale
      investigation. (As one expert on international terrorism
      who has looked into the Supernote puts it, "If the note
      is that nearly perfect, it doesn't exist.")


   NOT_100  (30 kb in 2 parts)