Gold, Euros and Mattresses

It has been said that many European businessmen keep three sets of books: one for themselves, one for their partner and one for the tax collector. Those in the U.S. who believe income taxes should be replaced with consumption taxes should see how much time and effort Europeans spend on gaming their value-added taxes.

These ancient and less-than-honorable practices were used to explain the euro's nearly continuous descent between its January 1999 introduction and its reversal in the spring of 2002.

Dubbed by some the "mattress trade," it held that holders of francs, lira, pesetas, marks, guilders, etc., were swapping unreported cash holdings -- cash in the mattress -- in these legacy currencies for dollars. Once cash euros were introduced at the start of 2002, the trade would be reversed, selling dollars and buying the newly printed euros. ...