Article continued below (note the line about devices being embedded into paper money, etc......

"Driving home in that new Cadillac?If so, you're probably taking advantage of the global positioning system like Smith's because, after all, it's pretty nifty technology. At home, you can't resist buying that sweater or book or "sensual gift" from a catalogue for your spouse. And when you call the 800 number to order, their computers are recording and taking note of everything: your phone number, name, voice, and key words that you use. That's because the phone, linked to computers, has become a sensor, too.It's no stretch to say the future of data collection - one part of it, anyway - is embedded in the rubber casing of Smith's Volvo key. It's a radio frequency tag built into the key as part of an anti-theft system. Without the key in hand, thieves would have a much tougher time starting the computer-laden car. It's a modest example of a much larger trend. In just a few years, these tags have become cheaper and better, and they're spreading fast. That's in part because they don't need a power source to work. Unlike the transponders used for electronic tolls, the tags need only to be scanned by a low-power device. They echo back the information they contain, extraordinarily long strings of unique numbers and codes. Those codes provide links to files already on computer servers, enabling someone doing the scanning to know precisely what object or person they have encountered. The latest tags can hold 128 bits. That's a very big number - bigger really than you can imagine. It means, Smith said, that virtually everything in the universe could be labeled with a tag containing a unique number.There's no end to the potential use of these things, which means that there is no end to the kinds of product monitoring or personal surveillance by companies, law enforcement, or private investigators. Such thinking has naturally stoked industry expectations. Some observers estimate spending on the tags will jump from $91.5 million in 2003 to $1.3 billion in 2008. Even discounting for hype, that's a lot of tracking. Like 6 million other people, for instance, Smith also has something called Speedpass to automatically pay for his gas at Exxon. Manufacturers are already putting RFID on pallets to ease logistics. Instead of having to read a label and record something in a computer, a worker only has to pass a wand within a few feet to record exactly what's on the pallet, where it came from, where it's supposed to go. (Indeed, when linked to databases, there's literally no end to the information that could be appended to the ID code at the moment a wand apprehends it.) In 2003, retail giant Wal-Mart mandated that suppliers begin using RFID starting in 2005 to improve efficiencies and cut down on costs. The Defense Department followed suit, saying that its own top suppliers had to begin using the technology in January 2005. The Food and Drug Administration, meanwhile, said it is studying the feasibility of putting the devices in drug containers as part of a "track and trace" program to prevent counterfeiting. Casinos are in on the new technology. Gambling chip makers have begun manufacturing chips containing the ID system both to fight fraud and to monitor high rollers.Radio frequency chips and readers likely will also be components in the "virtual border" to be created as part of the border surveillance program called U.S. Visit. Accenture, the giant consulting firm that won the enormous contract to build the system, used its familiarity with RFID to help distinguish itself from other contractors.Some companies already are talking about embedding the devices into paper currency. Hitachi produces a chip that appears suited to that task. The Japanese company sent out a vial containing perhaps one hundred of them. At first glance the vial looked empty; only on closer inspection was it apparent the chips were in there, off to one side, black and minute. They looked like fleas."