Usually, if you're carrying a big wad of dough you want to be as discrete about it as possible, but what if a metal detector could give you away. Researchers from the University of Washington have conducted independent tests and plan to share their results showing metal detectors could sense how much you have on you.
New Scientist reports that magnetic money has long been an "urban legend" to allow "shadowy government agencies [to] use metal detectors to track how much cash you are carrying." At least part of the legend is true as machines that take paper money, such as vending machines, verify the amount you inserted based on magnetic inks. Physicists Christopher Fuller and Antao Chen suggest there are other uses for these magnetic properties though, such as catching smugglers.
New Scientist has more on their research:
They found an ordinary handheld metal detector was able to pick up a dollar bill from 3 centimetres away, and placing the notes behind plastic, cardboard and cloth did little to block the signal. Adding further bills in $5 increments increased the strength of the signal, making it is possible to count the number of bills, though converting this into an actual dollar value would be difficult as notes of different denominations contain the same amount of magnetic ink.
Using larger metal detectors such as those found in airports should also increase the range of sensing, though detecting banknotes in such situations would be trickier as many other sources could interfere with the signal. "In a real situation the signal will be noisy and some kind of digital signal processing may be needed," says Chen. "The results published are from a feasibility study, and a lot of development work is needed to make it practical."
Here is a YouTube video demonstrating magnetic ink (Note: This video is unrelated to the study):
Markus Kuhn, a University of Cambridge computer scientist, suggested more specialized detectors that wouldn't get tripped up with signal interference. Gizmodo also states that as of right now it is not possible to differentiate via this method the type of bills one may be carrying.