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The second component of the outside money stock is currency,which is supplied in the United States at almost $1,000 per every man, woman, and child. More than half of the currency is made up of money that is held in denominations greater than $100. By almost anyone's guess, a very large fraction of that $100-and-up money is held by people who don't want their transactions to be visible. In fact, the inflation tax is primarily a burden on people who are holding illicitly received assets. I can't imagine a sillier aspect of the monetary policy problem than worrying about the Harberger triangle associated with the taxation of those transactions.
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