2008-07-14 12:22:44.803398+00 by ziffle 15 comments
This week the US government will buy Fannie and Freddie and for dessert, IndyMac bank by printing the money out of thin air. But this seems like an amatuer compared to Zimbabwe where the money has an expiration date, like milk.
[ related topics: moron Current Events Currency ]
comments in ascending chronological order (reverse):
#Comment Re: made: 2008-07-14 12:23:02.420279+00 by: ziffle
#Comment Re: made: 2008-07-14 13:59:52.796445+00 by: meuon
Per google: 100 USD = 746 ZAR (Rands) (South Afrika) and 100 USD = 151,080,967 ZWD (Zimbwawe).
As I'm dealing a lot right now with S. Afrika, all I can say is it's messed up. The people, the culture, the economy.. everything.
Apartheid may have been wrong, but it was working better than this.
#Comment Re: made: 2008-07-14 15:25:26.76944+00 by: Dan Lyke
That's one way to guarantee that your currency will not be the standard medium of exchange...
Of course with an exchange rate like that, I'm pretty sure that inflation gives it a de-facto expiration date anyway.
#Comment Re: made: 2008-07-14 17:16:17.219451+00 by: ebradway
meuon: Be careful - Google appears to be off by several orders of magnitude in it's exchange rate.
According to the LA Times article: 1 USD = 1,000,000,000 ZWD.
According to WikiPedia: 1 USD = 193,014,500,000 ZWD on the street as of this morning.
At current inflation rates, the exchange rate will keep going up at least an order of magnitude every month.
#Comment Re: made: 2008-07-14 17:42:48.333832+00 by: Mark A. Hershberger
Don't forget that in 1981 1 USD = 1 ZWD
#Comment Re: made: 2008-07-14 21:25:40.138395+00 by: meuon
Funny thing about doing business overseas in the 2nd and 3rd world.. They all want USD and will until our inflation rate zings up a bit more.
#Comment Re: made: 2008-07-15 19:14:10.281109+00 by: petronius
I read someplace that the latest blow against the Mugabe dictatorship is coming. The European paper mill that provides banknote stock to the Bank of Zimbabwe will refuse to continue the supply. They will be forced to print money on toilet paper, which is perhaps more apropo.
#Comment Re: made: 2008-07-16 14:11:31.183656+00 by: JT
Zimbabwe's inflation at 2,200,000% via BBC. It seems to compensate the government is starting to print larger and larger notes, as evidenced by the 10,000,000 marks they show on the picture in the article. Amazing to see an economy that far out of control, makes me wonder how far our economy will spin out before it starts to recover again.
#Comment Re: made: 2008-07-17 15:32:22.753009+00 by: ebradway
I wonder just how frequently the Zimbabwean dollar is being used. At the current inflation rates, it's really meaningless. I mean, when you can buy a gallon of milk for, say One trillion Z$ in the morning and it's worth Two trillion Z$ by noon, wouldn't the people just start trading in durable goods?
The inflation is more a reflection in the peoples' total loss of faith in the government. The money doesn't mean anything to them anymore. Fortunately for us (U.S.?!?), our dollar is valued not just by US citizens, but by other nations as well. That puts a lot of faith behind the buck!
#Comment Re: made: 2008-07-17 16:02:24.884036+00 by: Larry Burton
That puts a lot of faith behind the buck!
For now. I think a small part of the weakened US Dollar is the EUs desire to enhance the status of the Euro.
#Comment Re: made: 2008-07-17 17:42:58.141558+00 by: meuon
At the person to person consumer level, barter and trading in goods or time works. It's hard to do -business- that way. ie: I might barter for 20 gallons of fuel for my tractor/car, but it's harder to fill up the whole tanker truck that way. Possible, but harder.
What happens is -other- currencies get used, often the USD, but in some cases people actually print/make their own. Quite a few people on this list have bought a beer with a $5 Hoppy Coin, I've even used them at other places as the person at the cash registered recognized the value. It was backed by beer and beer at the Stone Lion was cheap, so it was a good value.
What Zimbabwe needs now.. and we may need.. is a coin backed by something of finite definite value. Like gallons of gasoline or diesel; or kWh of electricity (being just a little sarcastic, just go with the flow.. smile and nod.).
Of course, anything of common accepted value could be the backer of script.
#Comment Re: made: 2008-07-17 22:40:33.292902+00 by: ebradway
That's an interesting perpective, Larry: "the EUs desire to enhance the status of the Euro". The value of the Euro is enhanced in favor of the dollar, but are the economic effects due to specific actions by EU member nations? Or is it a matter of the economic strength of the EU and the collective acceptance of the Euro by EU members what has caused the Euro to have a greater perceived value than the perceived value of the Mark, Lira or the Pound?
The Dollar used to be sort of the "gold standard" of currencies. It was considered to be the strongest currency. The stability of the Euro, now, is based on the economic stability of multiple nations. I think there's alot to be said for that.
#Comment Re: made: 2008-07-17 22:47:50.424383+00 by: Mark A. Hershberger
The inflation is more a reflection in the peoples' total loss of faith in the government.
The inflation rate was caused by the government printing money at a rapid pace. It began when they decided to print 20 trillion dollars to buy foreign currency to pay debts to the IMF.
More recently Giesecke & Devrient (a German company) was being paid €500,000 to deliver Z$170 trillion EVERY WEEK. (http://www.bloomberg.com/apps/...16&sid=aO3baMKkEuPo&refer=africa)
You can print the money, but you can't make it mean anything.
#Comment Re: made: 2008-07-18 01:05:51.440629+00 by: Larry Burton
Like I said, Eric, it's a small part. A part of economic strength and weaknesses comes from perception. I think the EU has taken this opening to sell the Euro on the currency market as an alternative to the Dollar. The EU couldn't have done so without a stronger economy in their member nations, collectivey, than the US. I'm not blaming the EU for the weak Dollar I'm just saying that they took advantage of the situation to enhance the standing of the Euro which weakened the Dollar more so than it would have otherwise.
Just like speculation has had some effect on the price of oil I think currency speculators have had some effect on the value of the Dollar.
#Comment Re: made: 2008-07-23 23:49:34.661704+00 by: Mark A. Hershberger
Zimbabweans are ebay-ing 100 billion dollar bills to earn 20x the face value.