Printing Money: Canada’s Hundred Dollar Bill Problem
Does the Canadian $100 bill melt?
During November 2011, Canada started circulating state-of-the-art polymer $100 bills. Very tough to counterfeit and unusually resilient, plastic-based currency is supposed to be far better than the traditional paper (made from linen and cotton) bill. A problem surfaced though, when several people reported that $100 bills left in a hot car, on a toaster oven and in a tin box near a heater melted. (Those of you who have used Shrinky Dinks with young children will see the resemblance between news pictures of shriveled damaged bills (below) and Shrinky Dinks as they cook in the oven.)
On December 31, the Central Bank of Canada published a response. Sounding more like a “non-report,” it cited national security, had 134 “blanked out” pages and neither confirmed nor denied that a meltdown was possible. Essentially and rather logically, the Bank pointed out that in Mexico, Nigeria and Singapore, countries much warmer than Canada, the polymer bills are fine. Furthermore, the Bank said that it replaces any bills that are mutilated by mishaps.
Our bottom line: Neither figuratively nor actually is the Canadian dollar shrinking. It appears that the media is not really sure whether the reported meltdowns were entirely accurate. And, as for the more dangerous way that a dollar contracts, Canadian inflation, close to 1.5% during the past year, has been minimal.
Sources and Resources: To read about the challenge of designing functional currency, you might enjoy this econlife post and also this Huffington Post slideshow on the world’s most interesting currencies. For more about Canada’s $100 meltdown, this Quartz story was excellent while this Canadian news story presented the details on the December 31 Central Bank response.