Money

Money and Currency in the Bahamas

The Bahamas’ unit of currency is the Bahamian dollar ($B) which is based on the U.S. dollar. One Bahamian dollar equals 100 Bahamian cents (pennies).

As the Bahamian and U.S. dollars are equivalent (1 $B = 1 $US), residents or visitors may spend either Bahamian or U.S. dollars in the Bahamas, though outside the Bahamas, Bahamian money is not too valuable (trading at times at nearly half its face value), except as a popular collector item, so make sure to get rid of all your Bahamian dollars before you leave. (To understand more about money read this article on the gold standard. If the Bahamian politicians were honest — and rational — enough to implement such a program, the Bahamian dollar would be worth 20 times that of the U.S. dollar within 5 to 7 years.)

Security features on Bahamas notes include:

  • Watermark of the Spanish Galleon: All Banknotes
  • Security threads: All Banknotes
  • See-through feature of the Sand dollar: All Banknotes
  • Hologram: Bahamas $100 banknotes only
  • Series: All banknotes (except B$3 banknotes)
  • Foil: $10, $20, $50 100%
  • cotton banknote paper: All banknotes
  • Security fibres fluorescent green or yellow: All banknotes
  • Latent image: All banknotes (except B$3 banknotes)

Bahamian dollar banknotes are printed by De la Rue, Basingstoke, Hampshire, England, while coins are minted by the Royal Canadian Mint, which is located in Ottawa, Ontario, Canada.

Editorial Commentary on Fiat Money and Exchange Controls

Fiat money supply: Unfortunately, like the United States, the Central Bank of the Bahamas is not on a gold standard (gold cannot be counterfeited, and as such, a system based on the gold standardĀ is not susceptible to inflationary pressures of debt-ridden governments in search of loot), and free-marketĀ  banking, or “free” banking, is illegal (as it is in every other country). Like the United States the only alternative is the Central Bank of the Bahamas (which is the Bahamian equivalent of the United States Federal Reserve and Central Banking system).

Like the U.S., with a Central Banking system the Bahamian government can produce fiat dollars and inflate the money supply (inflation is a hidden – indirect — form of taxation). However, if the Bahamian government wishes to keep the Bahamian dollar on par with the U.S. dollar, it is by necessity restricted in its ability to create dollars “out of thin air” to matching that of the United States government’s legalized “counterfeiting operation”. The Bahamian government must do this less Bahamian money fall into disrepute and become worth less then the paper it is printed on.

Bahamas Exchange Controls: Like communist countries, like Cuba, the Bahamas does have strict exchange controls on its citizens, (and less so on foreigners as it is difficult to keep a leash on people who can easily leave the country — thus the animus against foreigners by the demagogue in power).

According to the Bahamas Central Bank:

The Bahamian Government’s decision to continue to maintain Exchange Controls after the dissolution of the Sterling Area reflected a desire to ensure disciplined use of the country’s foreign currency reserves and to assist in its Balance of Payments. Such concerns were understandable given the structural character of the economy–a small, open, developing, export-oriented economy–whose export sector is dominated by tourism; the Government’s goal of economic diversification, and the funding requirements of such diversification. Tourism provided then, as it does now, most of the foreign exchange needed to play an important role in funding the import requirements of the economy and, in the absence of a strong agricultural and industrial base, there is high reliance on imports for consumption and capital development.

In this planning process, Exchange Control is used as a tool of economic and monetary policy, to:

  • Preserve the country’s external reserves and safeguard the balance of payment
  • Maintain the fixed rate parity of the Bahamian Dollar with the United States Dollar
  • Control expansion in the money supply, as well as speculation in the Bahamian currency by non-residents
  • Provide a statistical means of monitoring the inflows and outflows of foreign currency to/from The Bahamas

In the overall macro policy mix of tools available to the Bank in the management of the economy, therefore, the Exchange Control arrangements enable a clear differentiation between the domestic and offshore sectors.

If the above sounds like fluff, it is because it is. Essentially what it says is that private Bahamians do the work in getting foreign currency, and then must fork over that money to the government who decides what is done with it. This is socialism/communism. The truth is that a government does not, cannot, and should not “plan” economic activities–those activities should be left to entrepreneurs and capitalists as guided by the market (i.e., Bahamian citizens not in government, i.e., the people). All that is required of government is to protect individual rights, including property rights, which is precisely what the exchange control rules violate. Such “laws”, like all laws based on the principle of slavery, should be abolished. If the government wants U.S. dollars for its activities it should purchase them on the free-market by providing value for them in return.

For further reading:

Gold and a Free Market: The Solutions to Our Financial Crisis
Get the government out of the money creation business…

“Francisco’s Money Speech”
“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money?