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Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins. Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Super dollars because of their high quality and likeness to the real US dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the US dollar.
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Some of the ill-effects that counterfeit money has on society include a reduction in the value of real money; and increase in prices (inflation) due to more money getting circulated in the economy – an unauthorized artificial increase in the money supply; a decrease in the acceptability of paper money; and losses, when traders are not reimbursed for counterfeit money detected by banks, even if it is confiscated. Traditionally, anti-counterfeiting measures involved including fine detail with raised intaglio printing on bills which allows non-experts to easily spot forgeries. On coins, milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off.
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A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. An example of this is the Portuguese Bank Note Crisis of 1925, when the British banknote printers Waterlow and Sons produced Banco de Portugal notes equivalent in value to 0.88% of the Portuguese nominal Gross Domestic Product, with identical serial numbers to existing banknotes, in response to a fraud perpetrated by Alves dos Reis. Similarly, in 1929 the issue of postage stamps celebrating the Millennium of Iceland’s parliament, the Althing, was compromised by the insertion of “1” on the print order, before the authorised value of stamps to be produced (see Postage stamps and postal history of Iceland.)
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A batch of counterfeit A$50 and A$100 notes were released into the Australian city of Melbourne in July 2013. As of July 12, 2013, 40 reports had been made between the northern suburbs of Heidelberg and Epping. Police spokespersons explained to the public in media reports that the currency notes were printed on paper (Australia introduced Polymer banknotes in 1988) and could be easily detected by scrunching up the note or tearing it. Additionally, the clear window within the notes was also an easy way to identify fake versions, as the “window appears to have been cut out with two clear plastic pieces stuck together with stars placed in the middle to replicate the Southern Cross.” Police also revealed that fake notes had been seized in June 2013 in Melbourne’s eastern and western suburbs. According to the Australian RBA figures, during 2014-15, the number of counterfeit $50 currency detected in circulation has more than doubled from the previous year, and more than 33,000 fake notes were removed from circulation.