Here is an email from one of my readers:
I love your book on Hyperinflation. Ditto on football and baseball. It's amazing how awful clock management still is in football.
You mention counterfeiting in the book and I thought I could offer you some insight on it.
I used to be a Special Agent with the Secret Service in the Western United States. In 1993 Mexico issued the "New Peso". It was issued due to hyperinflation. Surprised??? No you are not.
Anyway counterfeiters of US currency counterfeit foreign currency. I used to encounter a lot of counterfeit Mexican currency during our warrants in a very large southwestern city along with US and Mexican identification documents. This was in the late 90's. They counterfeited the New Peso. They did this because most people did not know their currency and assumed it was genuine since it was that "new" bill.
I offer to you the quick and dirty "Agent" counterfeit note detection. Like anything, the KISS method is best and common sense prevails. To detect counterfeit you must know real. Get a trusted note from a bank or bank ATM when it doubt. Compare known genuine to the questioned document.
Ditto for license or certificate or anything.
For US currency, here is what Agents do in the field to be fast. I will try to teach you by email.
Get any US note. Look at the portrait side. To either side of the President's portrait there is a blank space. Scratch the unprinted portion of the bill. You will feel nothing or what we Agents would call "FLAT".
Now look at the President. Look at his coat lapel and notice the detail. Scratch the lapel with your fingernail. It should feel rough. That is the quick and dirty check of genuine currency. The printing is engraved and is also known as raised printing, also known as Intaglio. Fake is flat, real is rough. Print something on your inkjet or laser printer. Scratch it. Flat. Fake.
Some of America's greatest "friends", North Korea and Iran, have such printing presses. Yea!
When a country changes the currency, the counterfeiters take advantage and counterfeit it. Most people get a genuine new note and remark to themselves, this looks fake, oh it's that new note and take it. People don't know genuine from counterfeit.
When Mexico changed to the new peso, they incorporated all types of security features. I remember one in particular, which was bright silver magnetic dots embedded into the New Peso. The clever counterfeiter just printed blank circular spaces on his note and then used an inexpensive silver metal sharpie pen to fill in the circle and voila, a new counterfeit Mexican Peso note. Looked good enough to pass, which is all they needed. Actually really good.
As far a US Notes, South Americans have successfully counterfeited the following:
Defeat the counterfeit pen – spray the bill with a chemical or bleach genuine US notes.
Mimic the OVI- Optical variable ink – The denomination number that changes color. It's not as good, but works and changes color a little. A comparison to real would detect it – again know genuine.
The security strip – They tape a good simulation to the back in the appropriate location.
The paper, they use either bleached foreign or bleached US lower denomination (100 printed on $5 or $20 – I think now there is no strip in a US $5 – now you know why – raise the cost)
Their attempt at simulating raised printing – not so good. It is offset printing (old school - Live and Die in LA printing) and their attempts to rough it up can be detected because its not that good(At least in 2007).
In closing, when a new currency is issued, counterfeiters will take advantage of ignorance. Compare known good to the questioned document. Most counterfeit is Offset or inkjet and is "flat".
The counterfeit detection pen is ok, but is easily defeated.
A black light works on the paper. Printer paper is wood pulp based and irradiates (glows) much more than cotton based paper. Doesn't work so well on bleached genuine currency paper.
The security strip on US notes move depending on denomination. Most people just look to see if it is present. A $5 strip is a bad omen on a $100 note. It may not glow- clue, but most people don't have a black light nor know the correct color.
The watermark won't match. Clue! Seeing a watermarked Lincoln on a $100(Ben Franklin) - Clue.
Scratching works fast. I believe the first "Supernote" was detected this way by a cashier in the Far East. She said it didn't "feel" right. They even use engraved printing on that one.
I could talk to counterfeiters and sort their money and detect the fakes while looking them in the eye. They didn't like that and it was a funny situation – for me.
Reed note: I discussed how to tried to avoid counterfeit currency when I bought my Swiss franc cash in Canada in my web article Swiss francs in an outside-the-U.S. safe deposit box.
John T. Reed