Those new $100 bills get delayed yet again

This time shoddy ink work is the culprit. The cost of botched Benjamins goes beyond the toll on taxpayers.

By Jason Notte Aug 15, 2013 9:23AM
Newly redesigned U.S. $100 note (Courtesy of the US Treasury)When your solution to the nation's economic woes involves printing more money, it pays to at least get the printing part right.

The Federal Reserve originally planned to put a redesigned $100 bill into circulation by 2011. It was going to have tiny 3-D bits that moved when you tilted the bill, a revised hidden message on Ben Franklin's collar and a Liberty Bell that changes color.


Instead, the project has been plagued by setback after setback and, according to The New Yorker, yet another production error has postponed the new bills again. Take your time, Fed: It's not as if the $100 bill is one of our nation's biggest exports or anything.


A massive printing error, in which some notes were left with a blank spot, prevented the new $100 from going public in 2011. Now, the Bureau of Engraving and Printing (BEP) says the latest batch of bills have been scuttled by "mashing," which occurs when too much ink is applied to the paper and the artwork's lines aren't as crisp as they should be.


Recent batches of cash from the Washington, D.C., plant contained "clearly unacceptable" notes mixed with passable ones, according to a July memo to employees from Larry Felix, the bureau's director. The Fed is returning more than 30 million $100 notes and demanding a refund, while another $30 billion dollars' worth waits to be examined.


The Fed has told the BEP that it won't accept any $100 notes made at the Washington, D.C., facility until further notice.


Thanks to the quality-control breakdown, the bureau now has very little breathing room to hit an Oct. 8 deadline for delivering this year's cash orders and getting the new $100 bill into circulation. The country's other money printer, in Fort Worth, Texas, has been ordered to step up production and given a harsh ultimatum from Felix: "If the BEP does not meet the order, the BEP does not get paid."


This currency conundrum has far more costly consequences. Taxpayers are on the hook for inspecting, correcting, producing, transporting and securing all the reprinted money, as well as disposing of the errant bills. A far higher cost could be the erosion of trust in the denomination that's quickly become a global favorite.


Roughly 84% of the new cash in circulation since 1990 has been in the form of $100 bills. They made up 77% of the value of all cash in circulation in 2012, up from just 52% in 1990. Basically, anyone who wants to stash $1 million away from Uncle Sam or exchange it for something the government doesn't like only needs a bunch of $100 bills, a large briefcase and some motivation.


Meanwhile, the amount of U.S. currency being held abroad has jumped from $280.4 billion in 1990 to more than $454 billion today. The Commerce Department considers it an increase in foreign-owned assets in the U.S. -- kind of like a zero-interest loan. But folks in financially troubled countries like Greece and Cyprus are using U.S. currency as a hedge against the euro, and a Federal Reserve study says 65% of all $100 bills in existence circulate outside the U.S.


The Fed is already having a tough time making friends at home, where a growing number of angry voices press it to justify its existence. If these printing slip-ups disrupt the wrong people's cash flow abroad, a tea party might seem charming compared to what awaits it around the globe.


More on moneyNOW

44Comments
Aug 15, 2013 10:00AM
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Can the government do anything right?  And now they are in charge of our health care. What could possibly go wrong?
Aug 15, 2013 12:09PM
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Shoddy? Anybody else notice that a lot of things are getting that way in the USA? Building, service, just to name a few.

Aug 15, 2013 11:15AM
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I've read that the problem of bulk currency storage for drug cartels is already severe.  Perhaps the largest denomination should be $20 in order to compound their difficulties.
Aug 15, 2013 11:35AM
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I never see $100 bills in Costa Rica, I'm sure someone uses them here, but the largest most folks will take is a $20. Ditto for Panama where the buck is the local currency. Ecuador and Liberia also have it as their currency. The $100s are probably used by dope dealers and  U.S .politicos The foreign politicians are buying Miami.
Aug 15, 2013 10:07AM
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When you make 99% profit i think you can afford some hiccups. No business is more profitable than printing money at .09 a piece and getting people to pay you $100 for it. A quick estimate shows the BEP earns, after costs, about 50 billion annually doing this. 
Aug 15, 2013 12:04PM
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Can't the government get anything right,the govt sucks.
Aug 15, 2013 11:27AM
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We can seem to get the tracking system right on the $100.00
Aug 15, 2013 11:55AM
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Check out a $10.00 bill. There are at least 3 different ones.
Aug 15, 2013 12:16PM
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Well, Federal Reserve, while you are fixing this blunder...please consider dropping penny production and save a little on non-'cents' expenditures.
Aug 15, 2013 1:30PM
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Should do like Canada, print plastic money and drop the useless penny.
Aug 15, 2013 12:54PM
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Send them to Wall Street. Maybe the Cocaine will keep the inks in place?
Aug 15, 2013 3:44PM
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US Government should SELL these to collectors to make a small dent in our budget deficit, betcha they would pay more than $100 a bill for each to have a "misprint".
Aug 15, 2013 1:08PM
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That first sentence is incorrect.  When the Fed buys mortgage-backed bonds and Treasuries from primary banks via quantitative easing, it pays for those securities by electonically crediting their reserve accounts at the Fed.  Banks accept this as payment based on the full faith and credit of the US Treasury.  No physical bills are exchanged, just electrons.
Aug 15, 2013 1:40PM
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If the Bureau of Engraving and Printing doesn't "meet the order" they won't get paid?!?!  Really?  They're PRINTING the money for God's sake!  They could just print out a few hundred extra sheets and bam, they're paid!
Aug 16, 2013 9:53AM
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Maybe they switched to RFID paper so the printing quality is slightly compromised....and of course, with the hot issue around surveillance now, they wouldn't want to let the public know.

With RFID embedded paper all of your money in your pocket and wallet can be counted and tracked. Think about how useful that information is to any store you frequent.

And if you're a plastic card holder, don't think technology hasn't worked on a method to wirelessly obtain your credit limit. If you think I'm just paranoid do a google search for this article:
“Smart shelves” - The store shelf of the future

While some of us are concerned and angry that our phone calls, emails, internet behavior, and snail mail are tracked and scanned, think about all of your financial info also being out there as soon as you walk through ANY door.



Aug 15, 2013 1:53PM
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When only few control the printing of money, it means the rest of us are just being controlled.
Aug 16, 2013 11:56AM
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Enough is Enough with the $100 Bill printing problem. Just distribute them as is, with the small strip problem. Or burn them and print them correctly. People are not aware how this is affecting the economy. If the new bills are not put into circulation, the Gold price will not be able to go back up. The Reason is, Gold Prices are related to how much US currency is in circulation. This is the root of many other Economical US Problems. You take a minute and search with the information, I have just given you. You will see the Link of Related Problems is Endless.
Aug 16, 2013 11:28AM
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why the hell do we taxpayers have to pay for the governments mistakes.  haven't we done enough to bail them out.  with everything going up and up we are going broke.  no wonder why 4 out 5 families are on state assistance or homeless.  maybe the government should be broke and homeless and see how they would feel.  but I don't think that would happen they are living very well off of us and I think it is disgusting.
Aug 15, 2013 1:18PM
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Everything the Obamans put their hands to turns to sh+t.......
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ROFL

Quote "Thanks to the quality-control breakdown, the bureau now has very little breathing room to hit an Oct. 8 deadline for delivering this year's cash orders and getting the new $100 bill into circulation. The country's other money printer, in Fort Worth, Texas, has been ordered to step up production and given a harsh ultimatum from Felix: "If the BEP does not meet the order, the BEP does not get paid."End Quote

 

What is to keep them from using the badly printed money and putting it in the Cayman Islands and bring back old worn out $100 notes back into the USA??

 

 

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