Counterfeit is a term with a negative connotation, and for good reasons. Without authenticity, the concept of trust is at stake, and that definitely rings true in economics. Luckily, there are several details that help you verify whether paper money is real or not, so that you can conduct transactions with confidence.
Recently, on a trip to Frankfurt, I was at the Geldmuseum of the Deutsche Bundesbank. As part of the Eurosystem, the Bundesbank is responsible for several services aimed at strengthening the functioning of the Euro. Some of these tasks include the evaluation of cooperation within the European System of Central Banks, conducting tests with cash processing, and informing the general public about different aspects of the Euro (see https://www.bundesbank.de for more info). Naturally, I was drawn to all three aspects but especially interested in the third one as a young financial.
For those who want to learn in details about the history of the Euro, I can highly recommend a visit. But to keep it simple, below you will find clues on recognising counterfeit Euro notes.
When looking at the first two pictures, your intuition probably tells you which note is real. If you look closely at the left picture, you will find the following features that make the note on the right pale in comparison: i) the drawing of the arches has a much higher colour contrast than on the right ii) the lines are much more refined iii) a pattern of red 'waves' can clearly be seen on the background iv) there is a thicker dark-red line among the arches, upon which you can find an inscription which reads like '10 EURO 10 EYPΩ 10 E8PO' in sequence (twice in fact, just look closely ;)) .
What else? On below two pictures you will find a piece of female aesthetics on the left. The hologram depicts - most likely - Europa, a Greek goddess famous for her beauty. The red checks run straight through the hologram without interrupting it. On the right ... none of that.
But what about below?
You may think it is the dust on my lens that clouds the picture on the left. Nope ... it really is the cheap quality of the signature. This time the right note is on the right, carrying the signature of the well known former central banker, Mr. Mario Draghi.
Now that you have a grasp of how to distinguish real from fake notes, you would almost think fiat currency has some serious intrinsic value. It may even change your perspective on spending next time you hold it at the counter. And last but not least, you just saw an important product category of black markets ... but that will be a topic another time ...
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