U.S. TREASURY AND FEDERAL RESERVE ANNOUNCE PLANS FOR REDESIGNED NOTES

Federal Reserve ^ | June 20, 2002 | Board of Governors of the Federal Reserve System

[Dalite]

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Joint Press Release Board of Governors of the Federal Reserve System Bureau of Engraving and Printing

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For Immediate Release June 20, 2002

U.S. TREASURY AND FEDERAL RESERVE ANNOUNCE PLANS FOR REDESIGNED NOTES NexGen notes are latest in series to add anti-counterfeiting features In keeping with their strategy of maintaining the security of Federal Reserve notes by enhancing the design of U.S. currency every seven to ten years, the Department of the Treasury's Bureau of Engraving and Printing (Bureau) and the Federal Reserve Board today announced plans to release the next generation of redesigned notes, with improved security features to deter counterfeiting.

The new design, referred to as NexGen, affects the $100, $50, and $20 notes. Circulation of the NexGen series could begin as early as fall 2003 with the introduction of the redesigned $20 note. The $100 and $50 notes will follow in twelve to eighteen months. Consistent with past design changes, the NexGen notes will remain the same size and use similar portraits and historical images to maintain an American appearance. The NexGen designs will include the introduction of subtle background colors. While color is not in itself a security feature, the use of color provides the opportunity to add additional features that could assist in deterring counterfeiting. The introduction of additional colors will also help consumers to identify the different denominations.

The new series will retain current security features, including watermarks similar to the portrait and visible when held up to a light, enhanced security threads that glow under ultraviolet light, microprinting, and color-shifting ink that changes color when the note is tilted.

The purpose of the currency redesign is to stay ahead of advanced computer technologies used for some types of counterfeiting. According to the U.S. Secret Service, $47.5 million in counterfeit money entered into circulation in fiscal year 2001. Of this amount, 39 percent was computer generated, compared with only 0.5 percent in 1995.

The redesign of $10 and $5 notes is still under consideration, but a redesign of the $2 and $1 notes is not included in the plans for the NexGen series. Release of NexGen notes will have no effect on money already in circulation. These notes will co-circulate with older series notes. The U.S. government has never recalled or devalued its currency.

As part of the introduction of NexGen currency, the Bureau and the Federal Reserve System are planning an extensive public education effort aimed at informing target industries - such as financial institutions, law enforcement, retail and vending industries - and the general public about the new designs. This effort will encourage people who use U.S. currency to familiarize themselves with the redesigned money so they can easily authenticate currency as genuine.

The first initiative of the public education effort is already underway. The Bureau is working with manufacturers of currency-accepting machinery to expedite the development of software and other devices, so vending machines and similar equipment accept NexGen notes. The cooperative effort allows a smooth transition for vending machine owners, mass transit agencies, the gaming industry, and other proprietors that rely on currency-accepting machinery to conduct business transactions.

The redesigned currency program is a partnership among the Federal Reserve System, the Department of the Treasury, the Bureau of Engraving and Printing and the United States Secret Service. The Secretary of the Treasury establishes the design and appearance of U.S. currency.

Information about the previous redesigned 1996 notes and the history of U.S. currency is available at the Bureau's website at www.moneyfactory.com.

Federal Reserve Susan Stawick 202-452-2955 Bureau of Engraving and Printing Dawn Haley 202-874-3545

2002 Other announcements

[Dalite]

Apologies if this is old news. It is still worth looking at again in light of the current economic situation. **************

Heads up, looks like they are going to do it again. Remember, when they did this in '96 through '98, no bonds were sold, as the old bills that were exchanged were slated to be destroyed. Gues what, they must have known something was going to happen, cause the old exchanged bills were dumped into the economy in late 1999, to offset "Possible Y2K bank runs"; ala the Clinton Economic Timebomb that we are facing today. Also note, when a time limit is set for exchanging old notes, money flows back into the country from the drug and contraband market like a tidal wave. In '96, it was predicted that 2/3 of the money supply (cash) was out of the country in contraband. This may be what the Gold folks are using to predict gold going to $750.00 - $850.00 an ounce in the coming 12 months...

[PAR35]

by enhancing the design of U.S. currency every seven to ten years

Obviously, no one at the Treasury Dept. or Federal Reserve can count. The $20 was released in September 1998.
http://www.moneyfactory.com/section.cfm/4/30

The new $20 will be released in Fall, 2003 per this story. That's 5 years, not "seven to ten".

[Dalite]

I think they use FedMath.

Anyway, this looks like the second round; slated to kick off as early as fall of this year.

They started before with $100.00 and 18 month exchange period in 1996. In month 12 (1997), the $50.00 was introduced. In month 24 (1998), the $20.00 was indeed introduced.

If they follow that same procedure, the $100.00 will come out in 2003, and then in month 12 (2004), the $50.00, then in month 24 (2005) the $20.00.

2005 minus 1998 equals around 7 years.

They may have a "leaner" for the 10 year mark, but looks like they gor a "ringer" on the 7 year mark

[Dalite]

OOps, I didn't read the order, and ASSumed they would follow the past example. You are indeed correct on your math.

My apology for jumping the gun on my reply.

Must be the FedMath....

[PAR35]

Only one problem with your analysis - the story specifically says that they will start this time with the $20, not the $100. Thus, there will be only a 5 year cycle for the $20.

[PAR35]

Oops, I didn't scroll down to your self correction before I posted.

[tet68]

This wouldn't have any thing to do with the Iraqi mint churning out bales of bogus greenbacks?

Probably just the usual inflation of the money supply.

[Jack Black]

The U.S. government has never recalled or devalued its currency.

Really? What do you call a silver certificate that clearly says "redeamable for silver" that they refuse to redeem. I would say that is devaluation, but perhaps "repudiation" is a better term. Liars.

[razorback-bert]

Tinfoil time:

How long till 10 old dollars becomes one new lime green and day glow orange new dollar?

[Jack Black]

Also note, when a time limit is set for exchanging old notes, money flows back into the country from the drug and contraband market like a tidal wave.

An iteresting theory but so far they haven't done that. You can spend any old curency you have stored away. If the local starbucks won't take it any bank will be happy to exchange it for the "big pictures" we have now. You still get an occassional old bill once in while. Hell I could take my silver certificat and buy coffee with it. I just can't get the silver it promises.

[arete]

Kinda makes you wonder what they are really up to, doesn't it?

Richard W.

[Dalite]

(The U.S. government has never recalled or devalued its currency. )

Really? What do you call a silver certificate that clearly says "redeamable for silver" that they refuse to redeem. I would say that is devaluation, but perhaps "repudiation" is a better term. Liars.

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I don't make this stuff up ....

However, I am with you. Silver Certs and Federal Reserve Banking Notes are 2 recalls that have happened in my lifetime.

As far as devalued; they do that every time they dump another load into the economy.

Consider this parable:

In Ancient Rome, for a one ounce gold coin you could buy:

A Toga
A Hand Crafted Leather Belt
A pair of Sandals

In Modern Times, for a one ounce gold coin you could buy:

A Suit of Clothes
A Hand Crafted Leather Belt
A pair of Shoes

Tangible backed money does not loose value. Fiat money looses value through inflation each time it is spent. The speed at which money changes hands is referred to as it's Velocity. Each time it changes hands, it looses some value to inflation; which is a hidden tax that gives the appearance of rising prices through the loss of purchasing power. Most inflation is caused by Government spending, as they are closest to the nozzle when the Fed dumps another load. The Dump is usually implemented by Treasury request.

So, I would say that most of the reasons that are given by the Fed for their actions are for public consumption only; following the mushroom model of educating the masses (Fed Sh%t and kept in the dark) [ small play on words there ].

My main fear by this announcement is that there will, once again, be no backing bonds sold for this campaign.

Following that, once again, another emergency situation will arise that will require the Fed to dump all the exchanged "old money" (Money with the previous series profile; ie 1996 -2003 vintage - There are people claiming to be in the US; this planet, that swear on their grandmother's grave that I am making up the story about the new bills that came out from 1996 - 1998), back into the economy.

This action not only risks another doubling of the cash liabilities that the tax payer will pay interest on till the end of time, but it also lessens the buying power of the dollar.

The only way we survived the Clinton/Greenspan timebomb the last time they did this (remember Y2K and the Fed insuring liquidity?)was to take on additional global trading partners to export the inflation to.

No wonder there is a trade deficit; it is a requirement for the US to continue to give the appearance of solvency.

With this in mind, the entire Iraq, EU, UN and Nato situation start taking on an entirely new shape in the domain of "what if".

[Dalite]

(This wouldn't have any thing to do with the Iraqi mint churning out bales of bogus greenbacks?

Probably just the usual inflation of the money supply. )

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Well, that is as good of an excuse as I have heard, and one thas historically, has merit.

Coincidence is starting to assume a life of it's own.......

However, I tend to agree with your second point; just another Fed Dump to try to revive a money system that gives the appearance of being a little short of breath....

[Dalite]

(Also note, when a time limit is set for exchanging old notes, money flows back into the country from the drug and contraband market like a tidal wave.)

An iteresting theory but so far they haven't done that. You can spend any old curency you have stored away. If the local starbucks won't take it any bank will be happy to exchange it for the "big pictures" we have now. You still get an occassional old bill once in while. Hell I could take my silver certificat and buy coffee with it. I just can't get the silver it promises.

---

According to the implementing plan (or at least the way it was explained to me), the replacement intended by the 1996 introduction of "new Bills" was structured in the following overlapping manner.

1. Bill "A" introduced

2. Bill "A" to have an 18 month exchange cycle; after the 18th month any remaining old bill "A" redeemed would trigger Federal Paperwork, much like that triggered when a cash transaction exceeds $10,000.00

3. Bill "B" introduced ( 12 months after bill "A")

4. Bill "B" to have an 18 month exchange cycle; after the 18th month any remaining old bill "A" redeemed would trigger Federal PPaperwork, much like that triggered when a cash transaction exceeds $10,000.00

5. Bill "C" introduced ( 12 months after bill "B")

And So On...............

The entire premise of introducing a new design to foil counterfeiting is negated if the old design is allowed to be left in circulation. This was the driving force behind the draconian enforcement of the exchange program time limits (which were never enforced, and never publicized).

The situation faced at the birth of the 21st century was one in which there was a near doubling of the nation's cash supply, and after the sucessful rollover of the digits, the old bills were quietly and slowly removed from the cash supply using conventional Fed methods of retirement and replacement. The net yield still remained a cash supply that was expanded by 2 times, and having no backing on half of it. The important thing to remember here is that there were no bonds sold to back the new bills, due to the one-to-one replacement policy established by the Fed.

I am still looking for a paper trail from treasury to see if the tracks were covered, and this procedure was scrapped when the exchanged old bills were dumped back into the economy in late 1999 to ensure "liquidy" in the event of Y2K bank runs.

At any intersection of analysis applied to this Fed campaign for "foiling counterfeiters", their explanations don't support their actions. It still seems like we are being Fed another yarn....

Or on the other hand, it could be just business as usual...