PERSPECTIVES
Ubiquitous Ben
While we're paying Iraqis in small bills, ol' Ben has quite a following abroad.

David M. Fine | April 17, 2003

The U.S. announced recently that it is flying millions of dollars over to Iraq to pay Iraqi civil servants. Since the Iraqi Dinar is now hardly worth anything, the U.S. Dollar will become the preferred currency in Iraq until things become more stable. The U.S. emphasized that it would be paying Iraqis in "lower-denomination" bills. Nothing bigger than a twenty, please. We wouldn't want to cause a stampede.

While flooding Iraq with dollars may have an air of the monetary colonization of Iraq, in fact, the Federal Reserve estimated at the end of 1998 that, of the 500 billion of U.S. dollars in circulation, 50 to 70 percent of them reside abroad. And when it comes to Benjamins, it is estimated, as of 1998, that 71 percent of these are expats as well. With all of us Americans using Mastercard and Visa, who needs cash anyway?

Is the world becoming dollarified? Argentina is home to nearly 25 billion worth of them and Russia has nearly $60 billion; Korea has $15 billion, and Turks possess 10 billion greenbacks. A whole bunch of other nations have a billion here or there. Some countries, like Ecuador, operate on the dollar. Argentina briefly adopted the U.S. Dollar as its currency, but the romance didn't last. If your government cannot print money in a pinch, what good is it?

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