Replace the Dollar, give the world fits

[DanielX]

Here's something my dad actually thought of: if the US replaced all of its currency with a new design, and stopped accepting old bills after 6 months or a year, the effects would be enormous. Think about all the billions of dollars stashed away, in less-than-legal ways.

Criminal organizations, from Al Qaeda to the Mafia to your typical drug lord, are going to suddenly have deep problems - all the money they stashed away will be worthless, unless they can figure out some legal means to exchange illegal dough. And they'd have to switch to counterfeiting a new currency design, to boot, and for all bill denominations.

That was my postulation. My dad insisted the crooks were small fry. He said the move would destabilize entire countries - remember  how Saddam had billions of dollars stashed in vaults across Iraq? He pointed out that Iran, China, countless dictatorships around the world have similar collections of bills, most of which obtained through an illegal fashion. The resulting financial whirlwind could destabilize several nations - ones that Bush seems to want to destabilize, to boot.

And that's not mentioning all the bills buried in vaults, squirreled away in Swiss bank accounts, and all sorts of hidden bills. The cost to the treasury would be more than recouped by reduced budget and trade deficits.

There is one problem that i can see: economic instability might bite both ways. A lot of malefactors will, unable to get new bills, attempt to dump dollars for another currency, or else spend their stocks of bills, leading towards short-term inflation, to be replaced by deflation once the old dollars are out of commision.

Either way, the world economy would be in for one hell of a whirlwind...

[ATFFL]

The US military used to do something similar during wartime.  They would change the military scrip design and refuse to accept the old design to foil counterfeiters and black marketers.