Newsbrief:
Plunging
Dollar
Loses
Favor
with
Drug
Dealers
1/7/05
The US dollar has long been the world's de facto common currency, but with it declining in value against the Euro and other currencies, it is beginning to lose favor with some cash connoisseurs including global drug dealers, Grant's Interest Rate Observer reported last month in a story picked up by Slate.com. With the dollar continuing to slide against foreign currencies, it is just not as handy as it once was for people who want to move large amounts of cash, Grant's reported. With more than half of the more than $700 billion worth of dollars in circulation being held outside the US, according to the Federal Reserve, the greenback has long been the favorite of drug dealers, black marketeers, arms dealers, and anyone else who would like to keep his transactions off the books and his assets in liquid form. But now, the dollar's reign as king of the cash economy is being challenged by the Euro. For the last two years, the number of Euros in circulation has been expanding faster than the supply of dollars, and it is becoming the currency of choice for those lovers of liquid cash. Part of the Euro's new appeal to the underground economy, Grant's reported, is its strength relative to the declining dollar. But equally important is the fact that while the largest US denomination readily available is the $100 bill, the European Central Bank has started in recent years to print 200- and 500-Euro notes. With a 500-Euro note worth $682 at today's rates, better those big Euro notes than bulky dollars. And those Euro notes are showing up in places where the dollar was formerly king -- such as the stomachs of drug couriers. Indeed, Grant's noted the October bust of a drug mule flying between Spain and Colombia, who was carrying $197,000 in Euros -- not dollars -- in his stomach. While most may not shed a tear over the loss of drug dealers and other unsavory characters as clients of the dollar, Americans might want to ask what has happened to our much-vaunted dollar to cause it to lose ground as the world's common currency.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
