L. Neil Smith's
Number 362, April 9, 2006

Free Market Money

Q & A: The New $10 Bill
by Pete Stephenson

Exclusive to TLE

We have received many inquiries about the new ten dollar bill. Here are some of the frequently asked questions. Please refer to this FAQ before sending us your questions.

Q: Why did the Treasury redesign the ten dollar bill?
A: To foil counterfeiters. Now it is more difficult for them to make realistic-looking ten dollar bills.

Q: Why don't we want counterfeiters to make ten dollar bills? Wouldn't they save the Treasury printing costs?
A: Counterfeiting is bad because it increases the money supply, which reduces the buying-power of your dollars.

Q: Aside from counterfeiting, does the money supply ever increase?
A: Sometimes. For example, the Fed's figures show the money supply increased by $2.94 trillion in the last 5 years.

Q: Does that increase of the money supply cause a loss in value of the dollar?
A: No.

Q: Why not?
A: Because it was done by the Fed, not by counterfeiters.

Q: How many ten dollar bills would counterfeiters have to print to match that increase in the money supply?
A: The counterfeiters would have to print 294 billion ten dollar bills. The bills would weigh 317 kilotons. If you laid them end-to-end, you would have to buy 95,000 gallons of unleaded gas to drive your Ford Fiesta to the other end, assuming your tires were properly inflated.

Q: So if counterfeiters printed 317 kilotons of ten dollar bills, the dollar would decrease in value?
A: Yes. But don't worry; counterfeiting is hampered by the new design. The dollar remains sound—thanks to the new ten dollar bill!

Pete Stephenson lives in California. He is saving $10 to buy gas for his Fiesta.


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