Canada unveils the new polymer $20 bill

Canada’s $20 banknote is a favourite of counterfeiters. But beginning this November, the Bank of Canada will begin circulating a new polymer $20 bill that it says will be harder to duplicate. The banknote’s design was unveiled in Ottawa Wednesday morning.

In a press release, the Bank of Canada said the main reason it is issuing the new $20 bill “is to stay ahead of counterfeiting threats.”

The front of the bill has a new portrait of Queen Elizabeth and the back has an image of the Vimy Memorial in France. The $20 bill accounts for over half of all Canadian banknotes in circulation, according to the Bank of Canada…

New $100 polymer banknotes went into circulation in November and then $50 polymer notes began circulating in March. New $5 and $10 banknotes should be out in 2013.

While the critical advantage of polymer over paper currency is that they are expected to be more secure, they are also supposed to last 2.5 times longer than the paper banknotes…

In 2004, the Bank of Canada introduced new security features to the Canadian Journey series of banknotes. The holographic stripe as well as a ghost image watermark, security thread, see-through number, raised ink and fluorescence made the currency harder to copy…

The polymer notes are part of a strategy the Bank of Canada adopted to respond to the increase in counterfeiting. The bank also put more effort into helping retailers recognize counterfeits, as well as into working with police…

Both the Bank of Canada and the RCMP stress the importance for people to quickly become familiar with the new notes, because periods of currency transition are often an opportune time for counterfeiters.

Training people running checkout cash registers has to be the single most important way to catch counterfeit currency. Unfortunately, that’s often one of those lowest common denominator jobs.

Of course, here in the GOUSA, we still haven’t figured out what to do about pennies.

America’s Renminbi Fixation

For seven years, the United States has allowed its fixation on the renminbi’s exchange rate to deflect attention from far more important issues in its economic relationship with China. The upcoming Strategic and Economic Dialogue between the US and China is an excellent opportunity to examine – and rethink – America’s priorities.

Since 2005, the US Congress has repeatedly flirted with legislation aimed at defending hard-pressed American workers from the presumed threat of a cheap Chinese currency. Bipartisan support for such a measure surfaced when Senators Charles Schumer (a liberal Democrat from New York) and Lindsey Graham (a conservative Republican from South Carolina) introduced the first Chinese currency bill.

The argument for legislative action is tantalizingly simple: the US merchandise trade deficit has averaged a record 4.4% of GDP since 2005, with China accounting for fully 35% of the shortfall, supposedly owing to its currency manipulation. The Chinese, insists a broad coalition of politicians, business leaders, and academic economists, must revalue or face sanctions.

This reasoning resonates with the US public…

“Enough is enough,” President Barack Obama replied, when queried on the renminbi in the aftermath of his last meeting with Chinese President Hu Jintao. Obama’s presumptive Republican challenger, Mitt Romney, has promised to declare China guilty of currency manipulation the day he takes office.

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Will Iceland adopt the loonie?

Will the loonie soon be flying high in … Iceland?

For months, Icelanders have been toying with the idea of ditching the tarnished krona, which has never fully recovered from the collapse of the financial system four years ago. But one of the intriguing suggestions floating around the North Atlantic island is that instead of the adopting the euro — a natural fit given that Iceland has taken initial steps to join the European Union — it might cast a furtive eye to the Canadian loonie.

This is not as outlandish as it sounds. Canada’s banking system is something Iceland’s is not — sound — and the Canadian economy, with its mooring in much-desired natural resource wealth, is among the most stable and predictable in the advanced world.

Canada also does not have the massive overhang of sovereign debt that will trouble Europe or even the United States for years…

Bank of Montreal economist Douglas Porter says the feat can be accomplished. Iceland would need to buy sufficient Canadian currency to do the trick, which likely will initially put upward pressure on the loonie.

But the impact on Canada would be small, he said, since Iceland’s population is only about 317,000 and the economy is less than one per cent of Canada’s…

Frankly, I think we should take it as a great compliment. I know everybody thinks of Iceland as a basket case, but they are beginning to turn things around,” Porter said.

“It shows you how far we’ve come in the past 10 years that people are even talking about this.”

I think it’s a great idea. Probably add futher currency to the idea of Americans moving to Canada for the opportunity to live in a stable, sensible nation that offers reasonable healthcare and a good education.

Yes that was a deliberate pun.

Thanks, Honeyman

Xi confident on Chinese economy – discounts Bears and book peddlers

Xi Jinping with Joe Biden, LA Mayor Antonio Villaraigosa
Daylife/Reuters Pictures used by permission

Chinese Vice President Xi Jinping said on Friday the Chinese economy would experience stable growth and avoid a hard landing this year, discounting a scenario economists fear may upset the global economy.

The Chinese leader-in-waiting, turning to courting American companies and governors hungry for a slice of his nation’s growth, told a business forum in Los Angeles that the world’s No. 2 economy will continue to push domestic demand while directing investment toward the United States.

Xi said “2012 will be a crucial year in driving the 12th five-year plan. China’s economy will maintain stable growth … there will be no so-called hard landing.”

“We will encourage more consumption, imports, and outward investment,” he told a business forum in Los Angeles on the final leg of his five-day U.S. visit, drawing light applause…

Xi is poised to become China’s next leader after a decade in which it has grown to become the world’s second-largest economy, while the United States has endured the deepest recession since the Great Depression of the 1930s…

Scores of executives from major U.S. and Chinese companies, from Intel to Microsoft, lined up to sign a plethora of deals after Xi’s address at the economic forum on Friday. Those included “Kung Fu Panda” studio Dreamworks Animation’s venture to make films from Shanghai, and Chinese telecoms giant Huawei’s pledge to award $6 billion of contracts over three years to Qualcomm, Broadcom and Avago.

The Chinese trade delegation this week also inked deals to buy a record 13.4 million tonnes of U.S. soybeans, valued at $6.7 billion. Before Los Angeles, Xi visited the heartland farm state of Iowa, where Chinese soybean buyers announced they would buy more than $4 billion in U.S. soybeans this year…

“China has become the United States’ fastest growing export market,” Xi told an audience of business executives and policymakers on Wednesday. “Speaking frankly, an important aspect of addressing the imbalance in Chinese-U.S. trade is the United States’ own economic policies and structural adjustment…”

A prosperous and stable China will not be a threat to any country,” he said.

None of this differs especially from the analyses of most economists and analysts doing business on the global stage. Of all the information strolling across the electronic stage – all week – the majority reflects this theme.

Professional bears, trying to influence their short-selling egos try to counter reality. And a couple times a week some minstrel show mug will get five minutes interview time trying to sell the latest book on the imminent collapse of China. With or without a secret cabal of lizard people [and a wink to Eddy Elfenbein].

Appreciation in China’s currency unnoticed – especially by politicians

With little fanfare, China’s currency has appreciated significantly in the last year and a half, leading many economists to question whether the exchange rate is still the most important economic issue for the United States to press with China’s leaders.

The rise of the renminbi — up 12 percent since June 2010 on an inflation-adjusted basis and 40 percent since 2005 — has helped American companies by effectively reducing the cost of their products in China. In the last two years, American exports to China have risen sharply…

In his Oval Office meeting on Tuesday with Xi Jinping, China’s vice president and likely next leader, President Obama discussed the currency as one of the trade practices that concerned the United States. That meeting — and tough public comments by Vice President Joseph R. Biden Jr. — continued a three-year campaign by the administration to convince Chinese leaders that a stronger currency is in their interest…

Administration officials and members of Congress have chosen not to emphasize the appreciation publicly, partly to keep pressure on China. Widespread discussion of the change could reduce support in Congress for a bill that would impose sanctions on Chinese imports to the United States and that Beijing strongly opposes…Passing legislation based on a lie doesn’t upset Congress or the White House at all.

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Italian village proposes minting their own money

Daylife/Reuters Pictures used by permission

A small town in central Italy is trying to go independent and mint its own money in protest at government austerity cuts.

Filettino, set in rugged hill country around 100 km east of Rome, is rebelling against a proposal to merge the governments of towns with fewer than 1,000 inhabitants to save money. Filettino has only around 550 people, but instead of merging with neighboring Trevi, mayor Luca Sellari is trying to go it alone and set up a “principality” along the lines of the famous republic of San Marino to the north.

He has started minting Filettino’s own bank currency, the “Fiorito,” with his photo on the back, which he says is already being used by the townsfolk.

“We aim to achieve real autonomy from Italy and we have the financial resources to do it,” Sellari said in an interview on the town’s website…

Mayors plan a protest in Milan Monday although media reports say the government is preparing significant changes to the budget, including a substantial dilution of the proposals on local government.

It’s a truly stupid series of proposals from the government. But what else would you expect from Berlusconi?

Why not pass Fiorito’s idea along to the Kool Aid Party, Ron Paul and the truly nutball Republicans who think this would fit their definitions of libertarianism?

All they need to do is to return to printing bills from the Confederacy. It’s where the heart of their ideology resides.

Con artist claims magic potion can double your money

An African man who claimed he could double your money simply by applying a magic potion to currency notes has been arrested at a Madrid bar where the Ecuadorean owner nearly fell victim to the ploy, said Spanish national police.

Police arrived in time to catch the suspected thief, from Cameroon, with 1,120 euros that had been handed over by the bar owner. The suspect, 28, alleged he had run out of magic potion and would need to go home to get some more, a police statement and spokesman said…

He told police the suspect had come to the bar a week earlier claiming he could double currency notes by applying a magic potion, the police statement said.

Taking a chance, the owner provided a 20 euro note, and the suspect mixed it with various white papers, applied a brown liquid and white power, and mixed it up with cotton. Presto, and there were soon three 20 euro notes visible, the owner told police.

“He returned my 20,” said Tepan, who’s lived 16 years in Spain and has owned the bar in central Madrid for 11 years. When the suspect came back last Saturday, the owner provided 1,120 euros in various currency notes, after the owner and the suspect agreed on how to split up the proceeds from the doubled money, the police said.

The suspect put the bills in an envelope and sealed it with tape. Then he applied the alleged magic potion, repeating this various times, but finally told the bar owner he had run out of the magic potion and would need to go home and get more. But he promised to leave the sealed envelope at the bar…

“I realized he was trying to take the money,” Tepan told CNN. A neighbor called the police and Tepan’s adult son arrived and locked the door to the street, with the suspect inside the bar.

The police arrived and opened the sealed envelope but found only white papers inside. Then they searched the suspect, and found the 1,120 euros hidden in his clothing, the police statement said.

This is one of the oldest cons in the world. Usually the bait is a bit more rational sounding – like found money. Falling for a magic potion is more than gullible.