Currency Degradation

Currency Degradation is utilized world wide by most bank, ATM and armored vehicle companies. Currency degradation systems are designed to stain money when it is stolen. Smoke packs and dye packs are the most commonly used types of currency degradation.

Many systems emit tear gas as well as smoke in order to hinder a criminal's escape. Currency degradation systems offer an effective way to prevent the theft of large sums of money. Once activated, there is nothing a criminal can do to prevent the degradation device from marking the money. And once the currency is marked, it cannot be spent.

In 2006, over 7,000 attempted thefts involving financial institutions, totaled more than $70 million in cash taken in the United States alone. Twenty percent of the affected institutions utilized smoke packs, dye packs or some other form of currency degradation system. Likewise, twenty percent of all cash stolen was recovered. Currency degradation systems provide an effective method of theft prevention.*

Stored Energy Concepts has over 20 years of experience in currency degradation. Our research and development focuses primarily on igniters for smoke packs. We also manufacture and assemble both smoke packs and dye pack gas cylinders. Stored Energy Concepts has been at the forefront of currency degradation systems since it's founding in 1996. Contact us or request a quote to see what we can do for you.

*All figures taken from the Federal Bureau of Investigation's Bank Crime Statistics for 2006

MARKED MONEY

A Graphic Timeline of the History of Money

Money has been used for something like 3000 years. City-states in the ancient near east had extensive trade from city to city, and they used precious metals as a medium of exchange. When trades were settled a certain amount of metal could be used to settle the difference. There was a problem of quality control, however. There were problems of determining that the quantity and purity of the metal was as agreed.
The answer was quality control and certification. The early kings of Lydia standardized the hunks of metal and guaranteed their quality by stamping the king's picture on them. These were the first coins. This guarantee of quality by the Lydian kingdom -- already a rich and powerful one -- was very successful, and made the Kingdom of Lydia even richer, indeed proverbially rich. Croesus and Midas -- of all kings the most proverbially wealthy ones -- were among the kings of Lydia.

But what Lydia could do, other kingdoms could also do. By 1000 AD, metallic coin monetary systems had spread through much of the old world.

As in so many other things, the Chinese were the innovators for the next step. The Chinese invented printing, and not too much later, they also invented paper money. It was widespread in China by around 1000 AD, but the Chinese abandoned it after about 1500, in the general decline of Chinese society after the Mongol conquest.

Time Value of Money

Simply put, time value of money is the value of money figuring in a given amount of interest for a given amount of time. For example 100 dollars of todays money held for a year at 5 percent interest is worth 105 dollars, therefore 100 dollars paid now or 105 dollars paid exactly one year from now is the same amount of payment of money with that given intersest at that given amount of time. This notion dates at least to Martín de Azpilcueta of the School of Salamanca.

All of the standard calculations for time value money derive from the most basic algebraic expression for the present value of a future sum, "discounted" to the present by an amount equal to the time value of money.

For example, a sum of FV to be received in one year is discounted (at the rate of interest r) to give a sum of PV at present: PV = FV — r·PV = FV/(1+r).

Some standard calculations based on the time value of money are:

• Present Value The current worth of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows. Determining the appropriate discount rate is the key to properly valuing future cash flows, whether they be earnings or obligations.
• Present Value of a Annuity An annuity is a series of equal payments or receipts that occur at evenly spaced intervals. Leases and rental payments are examples. The payments or receipts occur at the end of each period for an ordinary annuity while they occur at the beginning of each period for an annuity due.
• Present Value of a Perpetuity is a constant stream of identical cash flows with no end.
• Future Value is the value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.
• Future Value of an Annuity (FVA) is the future value of a stream of payments (annuity), assuming the payments are invested at a given rate of interest.

The History of Money

The history of money spans thousands of years. Numismatics is the scientific study of money and its history in all its varied forms.

Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads etc., as well as many other things that are thought of as having value.

The history of money and banking are inseparably interlinked. The multiplication of money really took off when banks got into the business. Inspired by the success of the London goldsmiths, some of which became the forerunners of great English banks, banks began issuing paper notes quite properly termed ‘banknotes’ which circulated in the same way that government issued currency circulates today.

In England this practice continued up to 1694. Scottish banks continued issuing notes until 1850. In USA, this practice continued through the 19th Century, where at one time there were more than 5000 different types of bank notes issued by various commercial banks in America. Only the notes issued by the largest, most creditworthy banks were widely accepted.

The script of smaller, lesser known institutions circulated locally. Farther from home it was only accepted at a discounted rate, if it was accepted at all. The proliferation of types of money went hand in hand with a multiplication in the number of financial institutions.

Banknote

A banknote (often known as a bill, paper money or simply a note) is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender.

Along with coins, banknotes make up the cash or bearer forms of all modern money. With the exception of non-circulating high-value or precious metal commemorative issues, coins are generally used for lower valued monetary units, while banknotes are used for higher values.

These banknotes were a form of representative money which could be converted into gold or silver by application at the bank. Since banks issued notes far in excess of the gold and silver they kept on deposit, sudden loss of public confidence in a bank could precipitate mass redemption of banknotes and result in ‘’bankruptcy’’.

The use of bank notes issued by private commercial banks as legal tender has gradually been replaced by the issuance of bank notes authorized and controlled by national governments. The Bank of England was granted sole rights for the issuance of banknotes in England after 1694.

In the USA, the Federal Reserve Bank was granted similar rights after its establishment in 1913. Until recently, these government-authorized currencies were forms of representative money, since they were partially backed by gold or silver and convertible into metal under certain circumstances.

Fiat Money

Fiat Money, type of currency issued by governments as legal tender, the value of which is based solely on decree or law rather than on actual coin or precious-metal reserves (called specie), and the redemption of which is not guaranteed by the government.

Such money was issued in quantity in the United States during the American Revolution and during the American Civil War. The Civil War currency, known colloquially as greenbacks, was made redeemable in specie by the Specie Resumption Act of 1875.

The issuance of fiat money frequently results in a steeply spiraling inflation, as specie-based currency is withdrawn from circulation, causing a sharp rise in prices.

Weight of a Dollar bill

The basic unit of weight in the metric system is called a gram, and it is equal to the weight of one cubic centimeter of water. This is a very small amount, but it is easy to comprehend.

Just pick up a U.S. dollar bill (or any bank note), and its weight is one gram. Because the gram is too light to be a convenient standard of weight, a larger unit has been chosen. This unit is 1,000 grams.

Following the regular pattern of metric naming, it is called one kilogram. One thousand grams of water occupy a volume of 1,000 cubic centimeters or one liter. So a person need only pick up a plastic one-liter bottle of water to understand how heavy a kilogram is.

Very heavy objects are weighed in tons of 1,000 kilograms each. One thousand kilograms is equal to one metric ton and is not the same as the usual American ton of 907.2 kg.

Mark Money

Mark (money), former monetary unit of Germany, from a Norse term for a unit of measure that probably dates as far back as the 3rd century ad. It was employed as a monetary unit by the Goths and then the Germans.

It was given a uniform value (0.35842 metric grains of fine gold) throughout the German Empire in 1873. After a period of inflation it was again stabilized as the reichsmark in 1924. It was reestablished (1948) as the deutsche mark in West Germany and the ostmark in East Germany.

When Germany unified in 1990, the deutsche mark, divided into 100 pfennige, became the national monetary unit. The deutsche mark was replaced by the euro, the monetary unit of the European Union (EU), on January 1, 2002.