In the wake of yesterday's dramatic drop in many world stock markets:
U.S. Dollar Drops Against Counterfeit U.S. Dollar
February 25, 2007NEW YORK-At the close of trading Monday, the U.S. dollar dipped to a record low of $.60 against the counterfeit U.S. dollar, which also outpaced the dollar against the euro and the yen.
"We don't even accept regular U.S. dollars anymore," said Union, NJ 7-Eleven manager Rick Grove, echoing the sentiments of merchants nationwide. "We've gotten stung a few times taking in the real ones. I always tell my cashiers, if it feels fake to the touch, and you can't see both sides when you hold it up to the light, it's fine."
Concerned about further devalutation of standard U.S. currency, Federal Reserve Chairman Ben Bernanke has suggested that Congress outlaw counterfeit bills entirely.
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The onion's satire aside, the way the US dollar and its counterfeits compete ... and cooperate ... around the world is fascinating stuff, and is food for thought for us FCers seeking to protect our system. We will meet our enemy, and...
Posted by iang at February 28, 2007 10:12 AM | TrackBackToday's news: In Moscow, US dollars (USD) sell for 27-30 Russian roubels (RUR) (the inter-bank exchange rate being about 26). Dollar-denominated webmoney (WMZ) sells for 32-34 roubels. Both exchange rates are valid for exchange booths in the streets, for transactions under $500.
This, I guess, is partly due to the higher overhead costs of truning roubel cash into WMZ, but it may also mean that WMZ is more useful than USD for general consumers. The days when shops would sell their stuff for dollars are long gone, but almost all on-line stores accept WMZ; it is actually the most popular flavor of webmoney.
Posted by: Daniel A. Nagy at March 4, 2007 04:29 AMSo, WMZ has a premium of 4-5 roubles, which works out as around 12%. That's pretty high.
It's possible to consider this as a demand premium, in that there is 12% cost base that consumers are prepared to pay to get a decent payment solution. It's indicative, though, and hard to rely upon.
We saw this with e-gold, in that many businesses make a market from around 2% to 15% premium, depending on which sector they are dealing with.
Posted by: Iang at March 4, 2007 11:53 AM