A 100 bill, if you can keep it.

May 9, 2022 The Wall Street JournalMarcos Kaunolakis, a visiting fellow at the Hoover Institution, a former Moscow correspondent for NBC Radio and a “second gentleman” from California, wrote that he wanted to hurt the Russians by quickly closing the US $ 100 bill that many had. The title of his article is “For Russia, It’s All About The Benjamin.”

Kaunolakis writes:

So while sanctions have failed to thwart Mr Putin’s military goals, partly because they do little to affect the well-being of most Russians, a quick $ 100 shutdown could trigger a real internal backlash against Ukraine’s war. In the current Russian banking environment, there will be no easy way to convert these closed bills into other currencies. The savings of the Russians will be reduced on paper.

He explains:

It would then be impossible to hide the effects of Mr Putin’s war from his base. President Biden should say that the $ 100 bill has been blocked because of the Russian leader’s war in Ukraine and the violence he has waged against civilians. Mr Putin may be blurring and turning everything he wants, but the Russians will still know that his actions have wiped out their savings.

Kaunolakis has fallen victim to the idea that when the government of country A hurts the people of the country because of the actions of the government of country B, the people of country B will go after their own government. A more probable effect is that they will unite with their own government against the bad government of the country which has harmed them. Putin’s actions may have led the US government to do bad things to them. But they will know that the US government’s move “wiped out their savings.” I discuss that in more detail here.

Kaunolakis goes further. He writes:

Even a $ 100 worldwide sunset might be a good idea. About 80% of the US $ 100 bill is abroad and most of it fuels bad actors. Former Treasury Secretary Larry Summers has argued that easy-to-transport cash is a key to global corruption and crime. Large Western bills as high as 100 are used by terrorists and drug traffickers to run most of their businesses. Thus the প্রচার 500 bills still circulated received their so-called “bin Laden”.

It fuels a lot of bad actors. But what percentage? 50%? 20%? 10%? And although he talks about terrorists and drug dealers in the same sentence, there is a big difference. Terrorists usually kill innocent people. Drug dealers sell drugs to willing buyers. Moreover, many innocent people find the $ 100 bill incredibly useful. Counolakis may seem hard to believe, but about 5.4% of American households do not have a bank account. If he finds his way, he will have very little trouble. But his policy will cause a lot of trouble to many innocent people.

And notice his last sentence, about € 500 bill. One way for the US government to raise revenue is to signage its currency. The US dollar competes with the euro and the yen. Although the US dollar is still dominant, one of its disadvantages compared to the euro is that the US does not have $ 500 notes. Kaunolakis’s proposal would add to that difficulty.

I rarely find readers comments The Wall Street JournalIts site is successful. Today, however, was a rare exception. Kaunalakis’s proposal was well received by a number of readers. Here’s my favorite from John Guerin:

I just don’t like the idea of ​​a dictator wiping out the retirement of some innocent person to hurt anyone who feels any pain. A bridge far away.

Amen, John.

Trivial note: The one that reminds me of Ben Franklin’s expression is Jack Benny.

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