Wednesday, November 09, 2005

P.W. "Roughing up counterfeits." Science News August 2005: 126-126

A credit card or sheet of paper might look smooth, but under a microscope, these surfaces teem with ridges, pits, and other irregularities. Now, researchers in England have devised a way to translate those random artifacts of manufacturing into unique identification codes. Such codes are difficult, if not impossible, to forge, the developers claim.

Russell P. Cowburn of Imperial College London and his colleagues describe their authentication scheme in the July 28 Nature. A London-based start-up company, to which some of the researchers have financial ties, is already manufacturing a laser-based coding system that applies the new strategy.

The system creates a code by measuring light scattered from a narrow strip of a paper or plastic surface illuminated by a laser beam. The measurements are sensitive to topographic features in the strip as small as hundreds of nanometers high, the researchers say. As the system detects variations in light intensity, it assigns to them 1s or 0s, depending on whether they are brighter or dimmer, respectively, than average for the surface. The result is a binary code identifying the surface.

Even after the researchers crumpled, soaked, baked, or scrubbed scanned pieces of paper, their codes remained readable.

To foil counterfeiting, a pharmaceutical firm might scan and record every package it ships, Cowburn says. Government agencies might scan passports or paper money.

Ravikanth S. Pappu of the Cambridge, Mass.-based company ThingMagic says that the new report validates earlier investigations into using physical features of objects to generate identification codes (SN: 10/5/02, p. 221). That's "an idea whose time has come," he says.

PHOTO (BLACK & WHITE): SKIN DEEP. Laser scans of microscopic surface patterns, such as the one that emerges in these paper fibers, are yielding identity codes for documents, credit cards, and packaging.

This tells me the new technology for anti-counterfeiting

Sunday, November 06, 2005

When somebody says money, what is the first thing you think of? Is it buying things? Is it getting a paycheck? Or is it shopping? No matter what it is, don't you think you need to know about it before you use it wisely? In my opinion, large amount of the population inadequately understands about money, especially the creation of money. Paul Krumm, the author of How Money is Created, Disappears, and Works, also has the same opinion:

“The matter of money creation is poorly understood. There is a common misconception that banks or governments create money. Governments only borrow money into existence from the banks. Banks can and do manage and redistribute money and wealth.”

Wouldn't it be great if you had as much money as you like? Well you are not the first one to think of that idea. Many people have tried to buy or sell things with counterfeits. From George Felkenes' point of view, he describes counterfeits as "the unauthorized duplication of any object, especially money, with the intent to defraud (cheat someone).” The kind of counterfeits I'm talking about is money. Counterfeiting is a serious crime and it's something that can make you serve in jail for a long time. Counterfeiting not only would make your life worse, but it also affects other people's lives.


so here are some of the questions I asked him and the things he answered.

How does the government, or anybody, controls the
production of counterfeits?

I believe that counterfeiting is dealt with by the Treasury department
and the Justice department. This is out of my area of expertise.

About how much money is produced in a year? Who
enforces the amount that will be produced in a year?

Money is created at two levels. The primary level is the Federal
Reserve Bank. The secondary level is commercial banks, Credit Unions
and Savings and Loans. They can create roughly 20 times the money that
they have invested in the Federal Reserve Bank. So the basic
"Enforcement mechanism" is at the Federal Reserve Bank. The Federal
Reserve Bank is an interesting institution. It is chartered by the
Federal Government, however its governors are paid by the commercial

Who produces money? Is it the United States Treasury?

If you mean bills and coins, they are produced by the Federal mint.
they go to the Federal Reserve Bank to be put into circulation. The
greatest portion of money is created in the process of making loans.
understand this it is necessary to understand that money is not
"stuff". Money is information, executive information. It gives a
person or entity permission to execute their desires.

A patron goes to a bank for a loan. the bank takes a lien on some
property (usually, although some loans are signature loans) and sets up
an account based on the value of the property pledged, offsetting that
with the principal of a loan to the patron. That credit is given to
seller of the property that the patron is buying.

Who invented money?

There are different kinds of money that have been invented over the
centuries. The first known examples are from Sumeria and Egypt.

In your opinion, how do you think our world will be
different if there wasn't money to trade things with?

If there wasn't any money, something would be chosen to act as money.
During WW2 cigarettes were used as money in Europe. In east Africa,
until less than 100 years ago, cowry shells were used as money. In
other cultures cows, stones, ceremonial axes, humans, and many other
objects, plants, animals, minerals and metals have been used as money,
as well as abstract money, i.e. pieces of paper that acknowledge that
one trader owes and another has a surplus in trading.

Thursday, November 03, 2005

Ok my outline is totally messed up. Can somebody please help me to improve it by commenting?

I Title: Money and Counterfeits

II Introduction: One paragraph
A. Basic facts
1. Money is used to trade things
2. Money is not created by Governments or banks
3. Counterfeits are often used to gain advatanges

III What is money?
A. Definition
1. anything that is for trade
B. The forms of money
1. bills
2. coins
3. gold and silver

IV Who creates money?
A. Bills
1.Bureau of Engraving and Printing
B. Coins
1. U.S Mint
C. Random facts

V Creating Counterfeits and Controlling Overproduction: How do people create counterfeits and how does the Treasury controls it?
A. Inflation
1. Increasing the value of money
2. Usually caused by the vast production of counterfeiting
B. Features of Money
1. Microprints
2. Special paper
3. Special ink
C. Punishments
1. Enforced by the U.S Secret Service
2. Serve in jail
D. Creating Counterfeits
1. Use computers and scanners and printers

VI Summary:
A.The Persuasion
1. Our life is mostly based on money
2. Money is not very easy to duplicate
3. The consequences doesn't only apply to you, but to other people too

Wednesday, November 02, 2005

I think I'm doing pretty well with my Blog progress. I have not changed my subject and my researches are pretty good. I found much information on how money is created and how counterfeits are prevented. It is very fascinating. It may not be enough to write my paper, but I think it’s enough to create 3 or 4 paragraphs. Right now, I’m trying to find the email address of a person who knows a lot about money. I can’t find the email of somebody at the Treasury, so I will find it at some random money site. I hope I can keep this pace up, so I can get a good grade.

Tuesday, November 01, 2005

Can you see the small letters around the S? They are called microprints and they are one of many features that prevents counterfeiting.

Other places on the Twenty Dollar Bill that has microprints.

Krumm, Paul . "HOW MONEY IS CREATED, DISAPPEARS, AND WORKS." How Money is Created. 02 Nov. 2005

The matter of money creation is poorly understood. There is a common misconception that banks or governments create money. Governments only borrow money into existence from the banks. Banks can and do manage and redistribute money and wealth. Only people and natural resources represent potential wealth. Only people can, by their labor, produce useful wealth, which can be traded, either 1) directly by barter, 2) thru the use of currency, or 3) thru the creation of money. Remember, all people who buy or sell, i.e. are producers or consumers, are traders.

Money is created when a trader makes a commitment, by buying goods or services from other traders, to place goods or services in the marketplace of equal value in the future.

In making purchases, traders borrow against their future production if they do not currently have a trading surplus. Money is created as evidence of that debt. Putting goods and services back on the market repays the debt, and extinguishes the money. In other words, money is borrowed into existence, and is extinguished as the loan is repaid. The effective lender, or guarantor of a loan is all the traders who trade with the borrower‑‑in short‑‑the community; the market.

This is how money is created, and extinguished. The stability of a money issue, then, is only tangentially related to any assets that might guarantee it.

Comments: This tells me that money is not created by Governments or banks.

Brian, Marshall. "How Counterfeiting Works." How Stuff Works. How Stuff Works, Inc.. 01 Nov. 2005

The allure of counterfeiting is obvious. If you could do it without getting caught, you would be able to print your own money and buy whatever you want with it. Counterfeiting is the ultimate technology for people who want to get something for nothing.

In the not-too-distant past, counterfeiting was a difficult and expensive endeavor. It required large printing presses and the ability to cut intricate designs by hand into metal plates. Today it is much easier to create counterfeit bills. As thousands of teenagers discover every year, you can create fake money with a PC, a scanner and a color inkjet printer in about 10 minutes.

Comments: This helps me to understand that it is easier to make counterfeits in modern days than back then.

Monday, October 31, 2005

For my primary source, I think I might eMail somebody who is an expert about money, like somebody at Secret Service. I will ask them questions about creating money and controlling the amount of money that people make in a year.

Wednesday, October 26, 2005

Felkenes, George T. "Counterfeiting." World Book Online Reference Center. 2005. World Book, Inc. 26 Oct. 2005.

"Counterfeiting is the unauthorized duplication of any object, especially money, with the intent to defraud (cheat someone). The printing and coining of money is the responsibility of national governments. In the United States, the Secret Service works to prevent the counterfeiting of U.S. currency.

The manufacture of imitation brand-name goods, including clothes, computers, and automobile parts, is called trademark counterfeiting or pirating. Counterfeit products are almost always inferior to the genuine products. Consumers are defrauded when they buy counterfeit goods, because they believe they are getting the real ones. The Trademark Counterfeiting Act of 1984 made it illegal to make or sell counterfeit goods."

Comments: This tells me that counterfeiting is not only for money, but for things that are duplicated to defraud.

Doty, R. G., and Stanley Fischer. "Money." World Book Online Reference Center. 2005. World Book, Inc. 26 Oct. 2005.

"Money is anything that is generally accepted by people in exchange for the things they sell or the work they do. Gold and silver were once the most common forms of money. But today, money consists mainly of paper bills, coins made of various metals, and checking account deposits.

Money has three main uses. First, and most important, it is a medium of exchange—that is, something people will accept for their goods or services. Without a medium of exchange, people would have to trade their goods or services directly for other goods or services. If you wanted a bicycle, you would have to find a bicycle owner willing to trade. Suppose the bicycle owner wanted skis in exchange for the bike and you did not own skis. You would then have to find something a ski owner or ski maker wanted and trade it for skis to give the bicycle owner. Such trading, called barter, can take much time. A modern, industrialized country could not function without a medium of exchange.

A second use of money is that it serves as a unit of account. People state the price of goods and services in terms of money. In the United States, people use dollars to specify price, just as they use hours to express time and miles or kilometers to measure distance.

A third use of money is as a store of wealth. People can save money and then use it to make purchases in the future. Other stores of wealth include gold, jewels, paintings, real estate, and stocks and bonds.

Any object or substance that serves as a medium of exchange, a unit of account, and a store of wealth is money. To be convenient, however, money should have several qualities. It should come in pieces of standard value so that it does not have to be weighed or measured every time it is used. It should be easy to carry so that people can carry enough money to buy what they need. Finally, it should divide into units so that people can make small purchases and receive change.

In the past, people used beads, cocoa beans, salt, shells, stones, tobacco, and other things as money. But above all, they used such metals as copper, gold, and silver. These metals made convenient, durable money.

Today, most money consists of paper. The paper itself is of little value, but it is accepted in exchange. People accept pieces of metal or paper in exchange for work or goods for only one reason: They know that others will take the same metal or paper in exchange for the things they want. The value of money therefore results from the fact that everyone will accept it as payment"

Comments: This tells me that back then gold and silver were the form of trade. It also tells me that money is mostly the modern form of trade.