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