
Zimbabwe offers new exchange rate: $1 for 35,000,000,000,000,000 old dollars - shahocean
http://www.theguardian.com/world/2015/jun/12/zimbabwe-offers-new-exchange-rate-1-for-35000000000000000-old-dollars
======
emersonrsantos
Brazil did this in the 90's but with a twist: they created a transition
currency, the URV (Real unit of value), and the people believed when they
introduced (1:1 to URV) new currency (R$ or Real).

[http://www.npr.org/sections/money/2010/10/04/130329523/how-f...](http://www.npr.org/sections/money/2010/10/04/130329523/how-
fake-money-saved-brazil)

~~~
kokey
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
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.

~~~
meric
It's a serious idea, presented in a sarcastic way.

Defaulting on all Euro debts, exiting Europe, bankrupting the banks, issuing a
new currency is a viable solution. Yes it's a horrible hang over to live
through but it means removing the horrendous debt burden for the next 50
years. See how Greece is having trouble with every IMF payment in the past few
months? If the EU has its way Greece will continue paying chunks of cash like
those for decades to come. Better to burn everything down and start over. They
might even pick up some Russian and Chinese financial support along the way.

~~~
kokey
Well I was thinking mostly of what options does Greece has if it is not
allowed to print money to get out of debt. The Brazilian virtual currency,
named the opposite of virtual, was an interesting idea. Another alternative
could be for them to have an aggressive sales tax domestically while giving
tax relief for exports, basically making them competitive internationally
while their money doesn't go as far locally, but I think EU rules forbid this
sort of subsidy.

~~~
tomjen3
Another idea would be to multiply pension plans with whatever the drachma to
euro ratio ends up being - that way only the world bank suffers and the
pensioners can keep their standard of living. They would likely have to do
something similar for employees and business owners, but that would still be
manageable.

~~~
honksillet
Ultimately everyone is going to take a haircut. Creditors and pensioners.

------
leugim
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
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.

~~~
pessimizer
"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...](https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic)

------
brianmcconnell
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
[http://www.dailymail.co.uk/news/article-1099467/Mugabes-
geno...](http://www.dailymail.co.uk/news/article-1099467/Mugabes-genocide-The-
images-despair-reveal-horror-Zimbabwe.html)

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

~~~
TheOtherHobbes
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.

~~~
tragomaskhalos
The book "The scramble for Africa", a history of colonialism in Africa written
in 1991, has this upbeat assessment of Mugabe as representative of a new breed
of progressive African leaders: "his creed was pragmatic African nationalism
.. he told the new nation that the 'wrongs of the past must be forgiven and
forgotten'. Mugabe was a statesman in the making." How depressing that this
turned out to be so wide of the mark.

~~~
lmm
A friend reminded me of
[http://www.petertatchell.net/direct_action/mugabe.htm](http://www.petertatchell.net/direct_action/mugabe.htm)
. How much could've been avoided if we'd been willing to enforce our laws?

------
sschueller
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.

~~~
rtpg
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.

~~~
ghshephard
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.

~~~
tormeh
It is trivial to cause inflation, but central banks are either not allowed or
ideologically opposed to effective means of putting money in circulation. Many
central banks have printed enormous amounts of money and inflated the currency
less than they would like to because they're buying second-hand bonds with the
printed money. They've been really frustrated with the inefficiency of this,
which I find amusing and slightly suspicious. Just printing money and giving
it away doesn't necessarily cause short-term inflation. The way in which it is
done is the key.

~~~
ghshephard
I absolutely guarantee you that if the US government just started cranking out
a tax return to its citizens, inflation would return with great efficiency.

------
shogun21
At what point is the paper/materials worth more than the money printed on it?

~~~
copsarebastards
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).

~~~
lmm
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.

~~~
JorgeGT
Maybe if you have a rare and beautifully printed treasury bond, it's worth
more than the (now antique) cash it cost!

------
donretag
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
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.

~~~
technofiend
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.

------
amelius
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 :)

~~~
jacquesm
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.

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

------
lerouxb
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..

------
jetskindo
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
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 ?

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

~~~
Evgeniuz
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).

~~~
knocte
>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.

~~~
Evgeniuz
I haven't thought about it this way, this actually makes sense. Insane margins
threw me off.

------
darkhorn
They need to use exponential notations! 10^20.

------
turshija
Yugoslavia also had huge hyperinflation in the 90s -
[http://www.rogershermansociety.org/yugoslavia.htm](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._

------
Sealy
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)

~~~
Grue3
Yeah, all the poor people without access to electricity would love Bitcoin.

~~~
mrb
Most people in Zimbabwe have electricity. Zimbabwe has 97% mobile penetration:
[http://afkinsider.com/20015/report-zimbabwe-has-97-mobile-
pe...](http://afkinsider.com/20015/report-zimbabwe-has-97-mobile-penetration/)
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.)

~~~
SideburnsOfDoom
> Most people in Zimbabwe have electricity. ... you seem to incorrectly think
> all people in African countries live in huts

I know people who live in good houses in affluent parts of one of the largest
cities in South Africa, and they don't have electricity 24/7
[http://loadshedding.eskom.co.za/loadshedding/description](http://loadshedding.eskom.co.za/loadshedding/description).

~~~
akhatri_aus
It's quite likely your friend uses a generator or inverter. It is quite likely
24/7.

Load shedding's occurrences have also only been something more recent (past
few months).

~~~
SideburnsOfDoom
Generators are still fairly rare in the suburbs. Load shedding has been in SA
for several years now.

~~~
akhatri_aus
It's been there for several years conceptually as a plan to deal with limited
capacity. Meaning it comes and goes.

For the good part of the last 3 years it's hardly been there (so unnoticeable
one would probably say power is hardly/never cut). Its just been more
impactful in the past few months & the last few months of last year.

Generators/Inverters aren't rare in the suburbs or in the further outlying
areas. At least not anymore. Not everyone, but one could hear someone else's
close by/a neighbors.

------
voidz
They say quadrillion; shouldn't this be quintillion?

~~~
white-flame
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.

------
bayesianhorse
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
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.

