Zimbabwe offers new exchange rate: $1 for 35,000,000,000,000,000 old dollars

http://www.theguardian.com/world/2015/jun/12/zimbabwe-offers-new-exchange-rate-1-for-35000000000000000-old-dollars

by shahocean • 11 years ago

88 92 11 years ago

theguardian.com

voidz• 11 years ago

They say quadrillion; shouldn't this be quintillion?

white-flame• 11 years ago

No, quadrillion in the common short scale:

  35,000 = thousand
  35,000,000 = million
  35,000,000,000 = billion
  35,000,000,000,000 = trillion
  35,000,000,000,000,000 = quadrillion

In the long scale, this would be a "thousand billion" (or apparently also a "billiard" according to wikipedia), so not a quintillion there either.

It boils down to denoting thousands of thousands, not just the raw number of triplet zeros in the number.

Sealy• 11 years ago

Zimbabwe. A prime use case for Bitcoin?

"At the height of the country’s economic crisis, Zimbabweans had to carry plastic bags bulging with banknotes to buy basic goods. Prices were rising at least twice a day."

Bitcoin is often cited as being volatile. Its never been anywhere near as volatile as that ^ (at least not in the last 2 years)

robzyb• 11 years ago

Zimbabwe. A prime use case for Japanese yen?

"At the height of the country’s economic crisis, Zimbabweans had to carry plastic bags bulging with banknotes to buy basic goods. Prices were rising at least twice a day."

Japanese yen is often cited as being volatile. Its never been anywhere near as volatile as that ^ (at least not in the last 2 years)

tormeh3• 11 years ago

The Yen is volatile? Except for the last two years, there hasnt been any valuation change for a decade.

SideburnsOfDoom3• 11 years ago

Zimbabwe. A prime use case for Bitcoin?

As is well known and is mentioned in the article, what they actually used was other countries' currencies. Namely the South African Rand and the US Dollar. South Africa is the economically largest neighbour, and is stable by comparison. The US Dollar is the "global reserve".

Grue3• 11 years ago

Yeah, all the poor people without access to electricity would love Bitcoin.

zo1• 11 years ago

Not even just poor people, almost all people have trouble getting electricity there. Of course, excluding the politically connected and powerful.

</used_to_live_there>

mrb• 11 years ago

Most people in Zimbabwe have electricity. Zimbabwe has 97% mobile penetration: http://afkinsider.com/20015/report-zimbabwe-has-97-mobile-pe... Last time I checked their phones didn't run on magic, but on electricity :) And all you need to use Bitcoin is a cellphone (a $20 smartphone).

(No I am not seriously suggesting Zimbabwe uses Bitcoin. I am just pointing out you seem to incorrectly think all people in African countries live in huts or something.)

dagw• 11 years ago

More like a prime use case for foreign currency. Most affluent people in Zimbabwe use South African Rand or US Dollars to conduct busies.

taejo• 11 years ago

Most everybody. The Zim dollar is not legal tender any more; it's not printed any more. This is just the bank trying to get rid of its reserves.

Sometimes Botswana Pula and Zambian Kwatsha are also used (esp. near the borders) but ATMs dispense USD.

gadders• 11 years ago

Anyone got a spare 1Trillion note they could send me?

Evgeniuz3• 11 years ago

You can just buy some on eBay.

I once made a wager (which I lost) with a friend for "a million dollars" as a joke, but then found that you can just buy trillions (at the time) of zimbabwean dollars easily, so I bought some and delivered :) Funnily, they sell it on eBay at a price higher than their exchange rate (and that's excluding shipping).

nostrademons• 11 years ago

Doesn't that allow an arbitrage situation, where you can buy Zimbabwe dollars through official channels and then sell them on E-bay for more than they cost you? Or maybe the "official" exchange rate is depressed through shortages and risk in completing the transaction.

knocte• 11 years ago

Funnily, they sell it on eBay at a price higher than their exchange rate

Doing the opposite of that would mean a man delivering letters with money in them with nothing in return. Sounds too philanthropic, especially when we're talking about money here.

kevinbluer• 11 years ago

There's a shop near my office here in Hong Kong that sells 100 Trillion Zimbabwean notes (amongst other old notes, coins, jewelry, etc). I bought quadrillion worth, although I guess it's worth a bit less now :)

https://www.facebook.com/photo.php?fbid=10152998973018758&l=...

jetskindo• 11 years ago

Guinea is working is way up there slowly but steadily. We are at $1 = 7249.95 franc. And you basically spend it at the same value. It's time to reset a large part of Africa.

seszett• 11 years ago

Doesn't the franc have a fixed conversion rate with the euro ?

Oh ok I see, that's the real Guinea you're talking about, not one of the other Guineas. Do you know the reason why Guinea doesn't just use CFA francs ?

brianmcconnell• 11 years ago

Zimbabwe: proof that even when shit goes completely off the rails, people can be cowed into putting up with it. At least they didn't go on an international ethnic cleansing binge like the Nazis did.

Varkiil• 11 years ago

http://www.dailymail.co.uk/news/article-1099467/Mugabes-geno...

You are right, this cleansing is only within their borders...

TheOtherHobbes• 11 years ago

I know people there.

Brilliant country with a lot of potential. Psychotic leadership - it's far worse and more violent than a lot of people realise. (As in - throwing dissenters down mine shafts violent.)

The West is partly to blame. Mugabe and Zanu-PF aren't going anywhere while Zim remains a cheap under-the-counter source of diamonds and minerals.

allendoerfer• 11 years ago

The hyperinflation ended in 1924, the Nazis took over in 1933.

pessimizer4• 11 years ago

The Beer Hall Putsch (the first attempted coup by the Nazis) was in 1923.

sschueller• 11 years ago

I wonder how quickly the US dollar would inflate if it was no longer the "global reserve".

We print and waste an enormous amount of money compared to other countries that don't have that luxury.

rtpg4• 11 years ago

This is false. Japan has been doing QE long before we have, and is fine (actually they weren't even able to get inflation for a very long time).

Printing money doesn't necessarily mean inflation is going to happen. There are so many factors involved, and the fact of the matter is the market cares about other things more than supply.

tn13• 11 years ago

Printing money in US context however is indeed going to cause pretty serious inflation. Also in a world where we worry too much about inequalities, those american who do not have fixed assets are likely to get hurt even more.

ghshephard3• 11 years ago

Printing money, and putting it into circulation, in values that exceed economic growth always results in inflation.

Inflation is trivial to cause. Deflation takes a bit more work and discipline, and is subject to the requirement that economic growth exceed increase in money supply - but the method behind it is well understood.

The challenge is to keep your inflation at a low, reasonable level - say 3-5%. I don't think anybody has figured out a repeatable method to do that.

ekianjo2• 11 years ago

Printing money doesn't necessarily mean inflation is going to happen.

LOL. Come to Japan and see for yourself if prices don't rise. Your comment is a big lie.

tiatia2• 11 years ago

How do you measure inflation? What is assets inflation?

bayesianhorse2• 11 years ago

The US government can "print" staggering amounts of money, because the Dollar economy is staggeringly bigger than any amount they would want to print.

turshija• 11 years ago

Yugoslavia also had huge hyperinflation in the 90s - http://www.rogershermansociety.org/yugoslavia.htm

Between October 1, 1993 and January 24, 1995 prices increased by 5 quadrillion percent. That’s a 5 with 15 zeroes after it.

leugim• 11 years ago

It is not new thing, it happened in Germany, Turkey, Yugoslavia... but yes, in Zimbabwe is exaggerated. I bought some bills of hyperinflated currencies through Ebay:

One hundred trillion dollars of Zimbabwe.

50 million marks of between wars Germany.

Some millions of Turkish lira.

laumars• 11 years ago

The ironic thing is a million Zimbabwean dollars is worth far more as a novelty note sold on ebay, than it is as currency in it's own country.

praxeologist• 11 years ago

I bought one early in the bitcoin era when 1BTC was ~$1, probably spent over $3,000 at least in today's BTC or something.

pessimizer4• 11 years ago

"The hyperinflated, worthless Marks became widely collected abroad. The Los Angeles Times estimated in 1924 that more of the decommissioned notes were spread about the United States than existed in Germany."

https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...

Turing_Machine• 11 years ago

My late mother had a two billion mark stamp from Weimar-era Germany, though I see from Wikipedia that's not even close to the record (they have a picture of a five billon mark example in their article).

It had gotten so bad that they didn't even bother printing new stamps; they'd just overprint the new value on the old stamp in black ink.

donretag• 11 years ago

It is strange using an ATM in Zimbabwe in that it dispenses US dollars. Unlike most US ATMs, it will dispense fifties and hundreds. Larger notes are mostly clean, but dollar bills are absolutely filthy. They are used until they fall apart.

Notes are US, but coins are South African rands.

Symbiote• 11 years ago

Ecuador also uses the US dollar as currency, cash machines dispense $20s and $50s.

Tourists from the USA should bring $1 coins and leave $1 notes at home, people don't like the notes as they get dirty.

Ecuador mints coins (1, 5, 10, 25, 50¢) which are the same shape as US ones, and interchangeable in Ecuador.

mithras• 11 years ago

Cambodia as well.

technofiend• 11 years ago

That would be nice, but with weight restrictions being what they are particularly on international flights, toting along an extra two pounds of $100 in coins is unlikely.

darkhorn• 11 years ago

They need to use exponential notations! 10^20.

emersonrsantos• 11 years ago

Brazil did this in the 90's but with a twist: they created a transition currency, the URV (Real unit of value), and the people believed when they introduced (1:1 to URV) new currency (R$ or Real).

http://www.npr.org/sections/money/2010/10/04/130329523/how-f...

kokey2• 11 years ago

I think Greece should introduce a currency like that and pay pensions and government employees in it. It should have a floating exchange rate to the Euro. They should call it the 'faux'

jacobolus• 11 years ago

Please don’t bring this kind of comment here. It’s pretty much impossible for a flippant joke about shredding a large group of people’s pensions to result in productive discussion.

lerouxb• 11 years ago

I still really want to get a few bags full of Zimbabwean notes and use it to wallpaper a room one day. You'd think that would be easy living in a country right next to them..

bayesianhorse2• 11 years ago

It probably doesn't help that education systems in countries like Zimbabwe is barely able to teach basic numerical skills to a large part of their population.

(I don't want to imply this is necessarily the case in Zimbabwe, or everywhere in Africa, but I've heard in some MOOC that people in developing countries tend to have numerical problems with prices)

nevi-me• 11 years ago

Unless the standard's changed in the years, we (South Africans) view Zimbabweans as having a very good education system, extending to math literacy. Perhaps that view might be biased as most of the Zimbabweans we would be exposed to (or any other country really) would be the 'cream of the crop' due to the best and able affording to get scholarships to study in other countries.

BTW, I'm 25, so I'm talking about things that I've seen in varsity from 7 years back to this day where I interact with varsity students.

tragomaskhalos2• 11 years ago

You have to do the Dr Evil voice when reading those denominations aloud

shogun21• 11 years ago

At what point is the paper/materials worth more than the money printed on it?

dtech• 11 years ago

That's already the case for the US penny.

copsarebastards• 11 years ago

I'm pretty sure that happened a long time ago. But the latent value of the materials is hard to recover--you could recycle the paper, but that requires a lot of expensive equipment, and there are many accessible sources of pulp which are easier to collect. Such an endeavor would inevitably fail because it lacks the efficiencies of scale.

As an interesting aside, US pennies minted before 1982 contain $0.018 worth of copper. It's not nearly the problem that Zimbabwe has, because pennies makes up so little of the US currency in circulation. But one might think an enterprising entrepreneur could profit from this. But again the problem falls to inefficiencies of scale: you simply can't harvest and sort enough pennies quickly enough to make the effort worthwhile (machinery even exists for this purpose).

lmm2• 11 years ago

I remember someone observing that physical currency from 100 years ago was worth more than you'd've made by investing it in stocks, property, or any financial instrument you care to think of for those 100 years.

chiph• 11 years ago

I bought a couple of the $100tn notes as a gift a few years ago. The frame I put them in cost more.

Curiously, the eBay price is higher now than it was then ($34 vs. $6.25). So they'll be back to being worth a trillion in about ... 185 million years at the current rate of increase.

jokr004• 11 years ago

That happened around 2009

http://www.theguardian.com/media/2009/jun/23/zimbabwean-cann...

amelius• 11 years ago

Romania changed their currency way back, but they kept the name of the currency equal, and they even kept using the old currency for some time.

So, there I was, getting money from the ATM, thinking I had hit the jackpot :)

jacquesm2• 11 years ago

It's super confusing, even today.

In France something similar happened, one day a poor man came up to me and asked me 'Tu n'as pas cent balles?' or something to that effect, I thought it a bit curious that he'd ask for 100 euros but in fact he was asking for 100 'old' francs, which would translate into roughly 25 eurocents.

Zimbabwe offers new exchange rate: $1 for 35,000,000,000,000,000 old dollars

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