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Has cash jumped the shark?

By Dave Birch posted Aug 3 2009 at 8:33 PM

[Dave Birch] The internet generation (Generation Y, or in my household, Generation Whatever) have a lovely phrase for deriding something that has outlived it usefulness, something that is going through the motions without contributing creative or positive to society. They say it has "jumped the shark", a phrase that comes from television criticism. A show jumps the shark at a point

where a show with falling ratings apparently becomes more desperate to draw in viewers. In the process of undergoing these changes, the TV or movie series loses its original appeal. Shows that have "jumped the shark" are typically deemed to have passed their peak.

[From Jumping the shark - Wikipedia, the free encyclopedia]

The origin of the phrase is an episode of the popular television programme "Happy Days". I'm sure you will all recall the engaging and innocent teenage antics of Ritchie Cunningham, Arthur Fonzarelli and their chums. I never liked it that much, personally, because it portrayed a world that seemed a little remote from my Swindon council estate, but that's by the by. Anyway, in an episode first broadcast on September 20, 1977, "Fonzie" wearing swim trunks and his trademark leather jacket, jumps over a shark while water skiing, for reasons that need not detain us.

The phrase has been used more recently [when?] outside the realm of popular culture, representing anything that has reached its peak and has declined in quality.

[From Jumping the shark - Wikipedia, the free encyclopedia]

This is the sense I mean in the title of this post.

Has cash jumped the shark? Cash use is certainly declining, and it's hard to say that cash is of the same quality (ie, purchasing power). It certainly doesn't contribute anything to the world around it. Look at the evidence. It subsidises organised crime, encourages tax evasion and wastes resources. The private costs are not aligned with the social costs, and the social costs are distributed very unfairly so that the poorest people pay the highest transaction costs. Lots of reasons to dislike it, but because I've become a major fan of the unbelievably brilliant television series The Wire, it's cash's promotion of crime that I'm concerned with most this week.

Readers may have been following the (literally) amazing story of corruption in New Jersey. When politicians get caught out in the UK it's for a couple of porn films on expenses, but this is a story of real political corruption: serious (as many commentators have noted) Soprano-style stuff. Naturally, what caught my eye was the role of our dastardly enemy, cash, in all of this. One of the allegations concerned bribing a city official with a cereal box containing nearly $100,000. A man after my own heart, Brian Palmer, wondered if this is a maximum and started calculating.

The highest-denomination bill ever available to the public was the $10,000 note, which the Bureau of Engraving and Printing stopped producing in 1945—along with $5,000, $1,000, and $500 bills... But the Federal Reserve began taking the high-denomination bills out of circulation in 1969, and as of May 30, 2009, there were only 336 of the $10,000 bills left on the market. Once you put all those into your cereal box, you'd have to get the 342 remaining $5,000 bills, and then finish up with some of the 165,372 $1,000 bills still being used. That gets you the total of $9,050,000

[From How much cash can you cram into a cereal box? - By Brian Palmer - Slate Magazine]

So you could fit $9 million in a cereal box. That's not much if you're a banker, but it's not bad if you're the mayor. However...

If you did stuff a cereal box with rare bills, its actual value would far exceed the face value of the notes. Collectors will pay anything from $40,000 to $140,000 for an authentic $10,000 bill at auction, depending on the bill's condition. The $5,000 notes are worth between $20,000 and $100,000, and the $1,000 bills between $1,500 and $5,000.

[From How much cash can you cram into a cereal box? - By Brian Palmer - Slate Magazine]

That makes the mythical cereal box worth $100 million. Now you're talking. In reality, restricting ourselves to $100 bills, the maximum is only $450,000 (the New Jersey ne'erdowells didn't pack optimally!). Hardly worth the trouble. The euro equivalent is a bit better. If we follow Brian's calculations and assume that we can fit 4,500 bills in our cereal box, that means a straightforward 2.2 million euros or about $3.1 million. My conclusion: euros are seven times better for corruption than dollars.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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Comments

Actually, when the Euro was launched the designers deliberatly created the €500 note to make it attractive for crime uses. Apparently they did this for two reasons:
1) Ego. They wanted the Euro to become as important globally as the dollar
2) Seniorage: It was expected that large volumes would get removed from the money supply by criminals, creating a hidden profit for the central bank

I totally agree that people have overrated money to a huge extent. Some people I know worship money and are slaves to it. They work for it their h=whole lives and die without even spending it. We have to reevaluate what our goals are; to have amassed abuch of green pieces of paper, or to accomplish and have a good life.

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