The Federal Reserve is scrambling for answers after it was discovered that it misprinted over 1 billion new, high-tech $100 bills, rendering the the bills unusable and costing taxpayers about $120 million.
CNBC reports that the bills, due out in February 2011, are so complex and chock full of high-tech security measures that regular printers are having difficulty producing the bills. Those printing complications, a source told CNBC, led to 1.1 billion bills — the total number of new bills produced thus far — being quarantined in Texas and Washington, D.C. vaults.
At one point as much as 30 percent of the new bills rolling of the presses were flawed and carried a crease that when stretched out revealed a blank piece of the bill.
“There is something drastically wrong here,” a person familiar with the situation told CNBC. “The frustration level is off the charts.”
Since officials do not know what caused the problem, all the new bills have had to be quarantined. Sorting through them by hand could take “20 and 30 years,” says CNBC, leaving the government trying to develop a mechanized sorting system. Once the defective bills are discovered they will be shredded.
The bills reportedly cost 12 cents a piece to produce, meaning the government now has about $120 million worth of bills it cant use — $110 billion if one counts the face value.
The new bills were supposed to be the first ones bearing the name of Treasury Secretary Tim Geithner. Instead, the Fed is now printing “old” bills bearing the name of Bush Treasury Sec. Hank Paulson.
See the new bills here.