A redesigned $5 Federal Reserve Note will be introduced March 13, 2008, the Bureau of Engraving and Printing announced yesterday.
It will be better at resisting counterfeiting efforts because it will have two watermarks and a security thread relocated to the left of the large portrait of Lincoln.
Will anyone accept it? This question is less about counterfeiting and more about the battered prestige of the U.S. currency around the world. Since World War I, when the dollar began to be widely looked to as a store of value and a source of stability, it became a real competitor to the British pound, which before then had been the international reserve currency.
By the end of World War II, British finances were shattered and the Bretton Woods treaty made the dollar’s dominance complete.
Dominance can be a bad thing if it creates an unreasonable arrogance, or an unrealistic laziness by those who experience it. Is that what the rest of the world is seeing in the economy behind the dollar, or is the value decline pure blind panic akin to a bank run?
It is no secret the dollar has been declining since 2002. The pace of decline accelerated this year.
I was in Germany in 2005 when the euro cost $1.25. It is now $1.45. Prices seemed high then. What will they be like when I visit Berlin in February 2008 to give Coin of the Year Awards? I am already curious.
World prestige and value questions aside, the new $5 bill will prompt more newcomers to take up the hobby of U.S. paper money collecting. That is a good thing. It probably means more good times for those of us who are active in the field, though that also means higher prices will be paid by collectors for prize notes.
Better buy them now before the general public becomes aware of the redesigned note. Most people probably won’t realize a new note exists until they get one in change. That means you have a 90-day head start.