Sunday, December 5, 2010

The Money Multiplier is at Work (Sort of)

I have been warning that not only will Ben Bernanke's money printing increase the money supply, but that the money multiplier might kick in and the money supply will increase by a multiple of what Bernanke creates. But, I never imagined it would occur this way. NyPo explains:

It's the ultimate in money laundering -- bleaching the ink off $5 bills and reprinting them as $100s.

Damond Gallagher, a Park Slope store owner, was suspicious of one of the bills handed to him by a young girl.

The girl and a friend had come into his gift shop, Scaredy Kat. Each tried to buy a small item with a $100 bill. The money looked off to him; the printing appeared soft.

But, when he ran a counterfeit-detection pen over them, they passed.

"The pen is used to detect iodine or starch," says Todd Madison of the US Secret Service. So it won't help with "bleached notes," an insidious and little-known counterfeit scam being played all over the city.

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