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Governments earn "seigniorage" by issuing physical currency, which functions as an interest-free loan. For the U.S., the $2.5 trillion in circulation represents a massive, interest-free debt obligation, creating a powerful financial incentive to continue printing large bills despite their use by criminals.
The process of running government deficits, which requires money printing, functions as a hidden tax on the populace via inflation. This devalued currency is then funneled primarily to those who own financial assets, systematically increasing wealth inequality.
While consumer cash transactions plummet, the circulation of large banknotes like the $100 bill is at an all-time high. This "paradox of banknotes" shows that the vast majority of physical currency isn't used for legitimate commerce, but as an untraceable tool for the global criminal economy.
When governments print money to cover debt, they don't take dollars from accounts but reduce what those dollars can buy. This "theft of purchasing power" is an invisible tax that citizens feel but often misunderstand, misdirecting their anger.
Unlike other countries, the U.S. can't truly become insolvent because, as the world's reserve currency, it can always print more dollars to pay its debts. The actual danger is that the government will devalue the currency through inflation, effectively stealing purchasing power from everyone.
Like in the legitimate economy, the U.S. dollar is the "lingua franca" of international crime. Despite other currencies offering higher-denomination notes, the dollar's superior liquidity and universal acceptance make the $100 bill the preferred instrument for criminal transactions worldwide.
The inherent complexity of economics serves as a shield, preventing the public from understanding that government debt and money printing directly devalue their savings. This functions as a hidden, non-legislated tax on anyone holding the currency.
The Federal Reserve's ability to print money is a direct mechanism to take value from every citizen without legislation. It is mathematically equivalent to government-sanctioned counterfeiting, devaluing currency and transferring wealth from the populace to the government, acting as a tax.
Central banks evolved from gold warehouses that discovered they could issue more paper receipts (IOUs) than the gold they held, creating a fraudulent but profitable "fractional reserve." This practice was eventually co-opted by governments to fund their activities, not for economic stability.
The production cost for any coin is roughly the same, regardless of its face value. This economic reality meant historical mints, often private firms, preferred producing high-value "big money" for merchants over low-value "little money" for daily use, leading to shortages and social unrest.
If the U.S. eliminated its $100 bill, criminals would switch to other large notes like the 200 euro. The U.S. would lose its seigniorage profits while the criminal economy continued unabated, creating a standoff where no single nation is willing to act alone.