Never mind monetary policy, we can’t even get the printing of our greenbacks right.
Because of a problem with the presses, the federal government has shut down production of its flashy new $100 bills, and has quarantined more than 1 billion of them−more than 10% of all existing U.S. cash − in a vault in Fort Worth, Texas, according to CNBC.
"There is something drastically wrong here," one source told CNBC. "The frustration level is off the charts."
At the time, officials announced the new bills would incorporate sophisticated high-tech security features, including a 3-D security strip and a color-shifting image of a bell designed to foil counterfeiters.
But the production process is so complex, it has instead foiled the government printers tasked with producing billions of the new notes, according to the network.
An official familiar with the situation told CNBC that 1.1 billion of the new bills have been printed, but they are unusable because of a creasing problem in which paper folds over during production, revealing a blank unlinked portion of the bill face.
A second person familiar with the situation said that at the height of the problem, as many as 30% of the bills rolling off the printing press included the flaw, leading to the production shut down.
The total face value of the unusable bills, $110 billion, represents more than 10% of the entire supply of U.S. currency on the planet, which a government source said is $930 billion in banknotes. For now, the unusable bills are stored in the vaults in "cash packs" of four bundles of 4,000 each, with each pack containing 16,000 bills.
Because officials don't know how many of the 1.1 billion bills include the flaw, they have to hold them in the massive vaults until they are able to develop a mechanized system that can sort out the usable bills from the defects.
Sorting such a huge quantity of bills by hand, the officials estimate, could take between 20 and 30 years. Using a mechanized system, they think they could sort the massive pile of bills, each of which features the familiar image of Benjamin Franklin on the face, in about one year.
The defective bills — which could number into the tens of millions, potentially representing billions of dollars in face value — will have to be burned, they say. American taxpayers have already spent an enormous amount of money to print the bills.
According to the network, the bills are the most costly ever produced, with a per-note cost of about $0.12 — twice the cost of a conventional bill. That means the government spent about $120 million to produce bills it can't use. On top of that, it is not yet clear how much more it will cost to sort the existing horde of hundred dollar bills.