A funny thing has happened on the way to hyperinflation in the United States. The Federal Reserve Board announced Friday that the Bureau of Engraving and Printing was having trouble printing the new $100 Federal Reserve Notes that were scheduled for release in Feb. 10, 2011.
Introduction of the new note has now been indefinitely delayed.
You know it is serious when the announcement occurs four months ahead of time – and on a Friday, too, when the government likes to announce things it wants the media to ignore as most people turn their attention to weekend activities.
The Fed apparently won’t be able to fill wheelbarrows full of the notes anytime soon.
It said the BEP has “a problem with sporadic creasing of the paper during printing of the new $100 note, which was not apparent during extensive pre-production testing.”
China’s protestations aside, the dollar is still an international currency and the $100 is the workhorse of that function. Quality is important.
The more anti-counterfeiting devices a note has, the harder it is to print.
To have the new note available in quantity is also important. Financial activity in many countries that use the dollar officially or unofficially turn on a dime. Nobody wants to be caught with the old currency.
This attitude springs from the fact that most countries demonetize old notes when new ones are introduced. The United States does not do this, but nobody wants to take the chance that when the next new note is issued that the policy won’t change, too.