Counterfeiting

Counterfeiting of money probably initially was attempted a couple days after the first real money was distributed. Since early forms of money usually contained a significant quantity of gold or silver, the counterfeits had to be produced from less valuable metals. Reproducing metal coins required a mold and a stamp.

These days, counterfeit coins mostly are limited to old and rare specimens that are not widely recognized. In the case of paper money, the case is quite different. Throughout history it has been much easier to produce bogus dollars, particularly in the era when state banks all produced their own currency. Experts estimate that as much as one-third of all money in circulation at the time of the Civil War was counterfeit.

Warfare

Using counterfeit money to attempt to undermine a nation's money supply has been a warfare tactic that dates back at least to the Revolutionary War. That was the first time the United States printed paper money, called "Continentals," and the British produced bogus versions. Unfortunately the paper money was not popular anyway and the value was greatly diminished regardless of the counterfeiting.

The tactic again was attempted by the Nazis during World War II, as they used concentration camp labor to forge British pounds and American dollars with a ploy known as Operation Bernhard. Although the fake bills were hard to distinguish from the real thing, it was never circulated. More recently, there have been efforts by North Korea, Bulgaria, and Syria to undermine the United States’ economy with counterfeit dollars but those also did not succeed to any degree.

New Money

These days the newly designed American currency is said to be much more difficult to counterfeit. The inks and engraving used are much more sophisticated and the new bills contain holograms and metal strips implanted in them to deter the efforts.

Despite these efforts, clerks who handle the bills apparently do not pay careful attention because counterfeiting of the redesigned notes shot up soon after their introduction. This could be in part due to the advances in printing technology and the development of color copiers that have high resolutions. Most recently, counterfeiting efforts have shifted to the new European Union currency, the Euro.