The US authorities in Vietnam (and probably in many other, earlier theaters
of war) used "military payment certificates" (MPC) in just this way as a
device again the black dollar market there.

they wouldn't announce a date but every so often they would call in all the
outstanding bills and issue a new series. The old series would hyperinflate
in the space of a day, lose its value altogether in a week or two. I don't
know any literature on the topic but some surely exists. West Point?

david warsh
www.economicprincipals.com
1.617.666.3365

-----Original Message-----
From: Societies for the History of Economics [mailto:[log in to unmask]] On
Behalf Of Pat Gunning
Sent: Monday, September 27, 2010 10:33 PM
To: [log in to unmask]
Subject: Re: [SHOE] Dated currency

  I wish this thread made sense to me. Perhaps someone can clue me in?

Why on earth would someone want to hold money that is destined to die? 
If I were a speculator in such a system, I would short sell all of the 
nation's money today.  That is, I would borrow money from everyone and 
then use it to buy their durable assets, promising to repay the money 
the instant before it is scheduled to die. At that time, I could buy the 
money back for a song and repay my money debts. Ultimately, I would gain 
a bunch of real assets in exchange for my song.

Anyone who lent me money to buy goods would surely not be a shrewd operator.

Is it not true that money that is due to die tomorrow would, in a world 
of reasonably astute people, die today? How can an item be acceptable in 
exchange by shrewd operators today if they know it will not be accepted 
in exchange tomorrow?


On 9/26/2010 4:23 AM, Robert Leeson wrote:
> Is there any literature on dated currency (currency that has an expiry
date as legal tender) as an assault on the underground economy?
>
> Robert Leeson
> [log in to unmask]
>
>


-- 
Pat Gunning
Professor of Economics
Groton, Connecticut
http://www.nomadpress.com/gunning/welcome.htm