Fake Money

Reach in your pocket and take out that big roll of bills. Depending on how many of them you have you feel pretty good. BUT did you know they are not worth the paper they are printed on? Huh? Let me explain.

Yes, those bills are legal tender because those guys in Washington passed a law stating they must be accepted for payment. They are Federal Reserve Notes and it states right on the bill, “This is legal tender for all debts, public and private”. That is OK, but if you go to the U.S. Mint will they redeem it in gold or silver? Years ago they did, but not since 1971.

Almost everyone has bought stock in a company. The company issues shares and each share represents a portion of the ownership in that company. buy counterfeit money for sale is against the best interests of the stockholders to issue additional shares unless something of equal value is added. Why?
Let’s keep it very simple. Suppose the company is worth $100,000 and it has issued 100,000 shares of stock. The stock has a book value of $1.00 per share. If the officers of the company decide to issue another 100,000 shares to hire security guards (like soldiers), lease (not buy) an airplane, increase the accounting staff (these folks do not increase production) and pay the executives more (who will produce the same amount as they are now) you will notice that all these expenses do not add to the company’s profits. The value of all shares is now 50 cents per share because the value of the company has remained the same. $100,000 divided by 200,000 shares is 50 cents per share.

 

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