The penny may be worthless, but let’s keep it anyway

There has been a growing war on cash in an attempt to curb terrorism and tax evasion.  Much of the focus has been on abolishing large bills, such as the decision to eliminate the €500 note from circulation.  However, politicians are also targeting smaller forms of money for elimination.  U.S. Senators John McCain and Mike Enzi introduced legislation in March 2017 to eliminate minting of pennies and switch the dollar from paper to a coin only. Continue reading

Money, Iraq, ISIS and Power in the Middle East

How much hard currency is held in the Iraq Central Bank?  This is a very important question because the news is currently filled with stories about the dramatic takeover of large amounts of Iraqi territory by the Islamic State of Iraq and al-Sham, called ISIS.  There are pictures of mass executions and of the Iraqi army abandoning cities.  ISIS only came into existence three or four years ago.  Standard US policy is to fight extremist groups by a two-pronged approach.  One is to physically fight the groups (either directly with troops or indirectly by arming opponents).  The second approach is to starve the groups financially.   Knowing the amount of hard currency is important because if the Iraq Central bank has a lot of hard currency and ISIS can take it, then the approach of starving the group financially will not work and the only option is a military one.

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