<p>The initial effect would be great inflation, likely hyperinflation, devaluing the US dollar. </p>

<p>Some counterfeiters have had extensive operations, running in the tens or hundreds of millions of dollars. Legalizing these operations would likely lead to a great increase in the number and extent of these operations. </p>

<p>Having more and larger "counterfeiting" operations, or under the proposed law, simply additional printing presses, would cause the US to lose all control over its monetary policy.</p>

CC BY-SA 4.0
2018-06-26T19:24:17.807Z
2018-06-26T19:24:17.807Z
RegressForward
<p>Something close to this happened to the <a href="https://en.wikipedia.org/wiki/Somali_shilling" rel="nofollow noreferrer">Somali shilling</a> after the central bank collapsed around 1991</p>

<ul>
<li>counterfeiters concentrated on the largest denomination 1000 Sh.So. note</li>
<li>the value of these notes fell to the physical cost of producing quality counterfeit notes, about 4 US cents per 1000 Sh.So. by 2008</li>
<li>large transactions required a prohibitively large number of Somali notes and so foreign currency notes were used instead</li>
</ul>

CC BY-SA 4.0
2018-06-27T00:30:16.453Z
2018-06-27T00:30:16.453Z
Henry
<p>If today the United States legalized counterfeiting, what would be the effect on the economy? The counterfeit must look authentic to be legal, thus requiring some skill.</p>

<monetary-policy><money-supply>
What would be the effect on the economy if the United States legalized counterfeiting?
TheAsh
# What would be the effect on the economy if the United States legalized counterfeiting?

(Asked by: username_0 on 2018-06-26)

If today the United States legalized counterfeiting, what would be the effect on the economy? The counterfeit must look authentic to be legal, thus requiring some skill.

**Tags:** monetary-policy, money-supply


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## 2 answers

### Answer by username_1 on 2018-06-26. Score: 2

The initial effect would be great inflation, likely hyperinflation, devaluing the US dollar.

Some counterfeiters have had extensive operations, running in the tens or hundreds of millions of dollars. Legalizing these operations would likely lead to a great increase in the number and extent of these operations.

Having more and larger "counterfeiting" operations, or under the proposed law, simply additional printing presses, would cause the US to lose all control over its monetary policy.


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### Answer by username_2 on 2018-06-27. Score: 1

Something close to this happened to the [Somali shilling](https://en.wikipedia.org/wiki/Somali_shilling) after the central bank collapsed around 1991

* counterfeiters concentrated on the largest denomination 1000 Sh.So. note
* the value of these notes fell to the physical cost of producing quality counterfeit notes, about 4 US cents per 1000 Sh.So. by 2008
* large transactions required a prohibitively large number of Somali notes and so foreign currency notes were used instead


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