Gosh, people send me stuff. Today I discovered a huge windfall. My friend and volunteer moderator DB Stealey sent me 100 TRILLION dollars in the mail today. Here’s a scan of the bank note:
I’m rich! I can fund my own climate research group, I can get that Ferrari! Now all I have to do is convert it to US Dollars…and um…plot like Dr. Evil here.
Oh, wait…
Seems it is worth about $30 in this January 2009 BBC article. Well at least I can buy a nice lunch.
Well, maybe not. McDonalds maybe?
Lessee…what’s the exchange rate today?
Maybe if I hurry, I can still buy a hot dog and a coke at Costco. I wonder why they bother putting a security strip in the banknote?
Well, it’s still worth more than this:
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Happy Friday everybody!
About twenty years ago I bought a 100,000 peso note in Mexico for 34 USD. A few years later they fixed inflation: they just lopped 3 zeroes off the notes. Problem solved …not.
E.M.Smith (16:15:01):
Zimbabwe currency on ebay: click
How much is a decillion? click
Not sure if this is OT or not, since it seems to me that it’s also tied in with inflation, etc. http://views.washingtonpost.com/climate-change/post-carbon/ Scroll down to get to the article: EEI, three oil companies to back climate bill; top 10 highlights of Kerry proposal
A really cute statement in the above article:
” 4. Oil companies will be subject to pollution allowances that will be retired over time, rather than a linked fee. In an effort to counter criticism that any sort of carbon limits on fuel sales constitutes a gas tax, the Congressional Budget Office will issue a document stating this provision will not constitute a tax. ”
Oh goody, goody! The money flowing out of our pockets and into “Fundamental Transformation” isn’t a TAX! How wonderful! Sure takes a load off my mind.
Hey buddy, best cash it in now before you forget where you put it for safe keeping and buy lottery tickets with it. Memory is a problem for us late era baby boomers, as was long term retirement planning.
http://en.wikipedia.org/wiki/Baby_Boom_Generation
I have a Zimbabwe $2 bill from when I went there about 12 or 13 years ago. I guess they have had a little inflation problem.
“a cardinal number represented in the U.S. by 1 followed by 12 zeros, and in Great Britain by 1 followed by 18 zeros.”
http://dictionary.reference.com/browse/trillion
That might help explain the difference!
In the old Weimar Republic of Germany, 100 trillion marks was worth $25 so Zimbabwe has a ways to go yet to match that exchange rate.
The way this country is going, we may face similar exchange rates against the Chinese Yuan.
R. de Haan (16:48:32) :
“Anthony, this all looks very funny but it is in fact a big tragedy.”
You beat me to it ! We can all have a giggle but the country was once the bread basket of Africa, dragged to its knees by its despot ruler. Before long it will be Nigeria following this ragged road!
Zimbabwe has not yet discovered a “trick” we have been using for years in Argentina: we print new bills taking out zeros as needed. The first time, in 1967 we erased two zeros from the Peso Nacional an renamed the currency “Peso Ley 18,188”; a few years later we took three zeros and renamed it “Austral”, then five years later we took another 4 zeros and renamed it as plain “Peso”. Curiosly, it was always done to make the American Dollar to be equivalent to $4 units of the new currency.
It means that our present Peso is worth 0,000.000.001 of the primitive Peso Nacional.
My hope is that in the next year we won’t be erasing five zeros from our present Peso and cope with the Zimbabwe devaluation…
Don’t forget that part of the GDP of Zimbabwe is the influx of aid $/sFr/Eu, etc. They won’t admit it, but that is a huge part of their GDP. It’s more than tragic.
For a real rundown on the history of money, download the pdf of the History of Money by Elgin Groseclose at the Mises Institute. The book is sadly out of print, but still available via pdf: http://mises.org/books/money.pdf
TomB (17:41:22) :
Is that, seriously, a picture of a pile of rocks on the note?
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Well, sure… they want to give the impression that their currency is “rock solid”. Wouldn’t you tend to wonder when it got to the point you couldn’t be sure what the denomination was? Pictures solve everything, ya know. Ask Mann–he’s a pro with this type of deception.
Thanks for this post. Anthony.
I normally only come here for the knife fights on science, but nice to see some topical financial advice.
Of course with this type of advice a disclaimer is advisable,
such as,
this information is provided to reader as commentary only on the benefits of Currency Hedging and carbon trading and is not intended as financial advice and the reader before making a decision should seek independent legal advice from a professional. Hint Al Gore and Mr Mugabwe and GS are not considered quality independent advice at this point time.
Caveat Emptor suckers.
You almost made me spit me coffee with this one.
mean financial advice not legal, however one may need legal advice in the future.
“The money is diluted and spread around” sounds good if you think that somebody has more money than you, or if you are young and have not worked and saved for a life time…
But when the money that you worked for, sacrificed for, didn’t go to the beach for, didn’t spend time with your kids while they were growing up for, sat in traffic everyday for, put up with crap from your boss for, strained your eyes for, stood on your feet all day for, bend over backwards for, etc.. so that you could have a little money when you were old and couldn’t work anymore… becomes worthless…
do you know what happens?
People stop working.
Then, go and try to find a doctor, or a nurse, or someone to run your train or serve your food or even grow your food or repair your car. Good luck.
James Cameron and Sigourney Weaver were recently in Brazil ( IIRC) to block the construction of a hydro-electric dam. That should help those poor stupid locals ( this last bit is sarcasm, FYI )!!!
Enjoyed Avatar, but clearly Cameron has lost touch with reality and fallen for the myth of the noble savage. Apparently he would like the rest of us to fall for it as well. Blinders here, get your Hollywood blinders here. *Caution may cause inflated feelings of importance and intellect*.
My connection to the topic is one of delusion. Hollywood is a delusion and money is an illusion. PRINT IT !! (as they say in hollyood, or they used to anyway,…. )
“I wonder why they bother putting a security strip in the banknote?”
I wondered about this too. It just makes no sense at all to spend so much money making money that has so little value.
Must be this guy missed Al Gore’s fact filled movie.
Some one send him a copy.
Thank goodness Al Gore and B. Obama will not do this to the U.S..
Following the divorce of Perth property developer, Warren Anderson, and the auction of his goods and chattels, you might be interested in blowing your new found wealth on the stuffed polar bear that is up for sale … the perfect addition to any sceptic’s home or office.
REPLY: I don’t think Dave would have sent it if it was that valuable -A
It was worth $7,859.43 USD when he mailed it.
It was worth $7.86 USD when you opened it.
But hey, it was the thought that counted. 🙂
Curiousgeorge (15:59:19) (et al)
It’s true that paper money is a more convenient way of representing of larger value, such as minerals or items of trade.
However,a Scotsman called John Law (who was on the run from a murder charge) discovered the trick of creating wealth and power out of thin air – paper money with no actual physical backing. The chosen Government was France, which was bankrupt and ready to try anything. The project was the Mississippi Company, which was setup as a way of selling shares in something of no value, and he issued both the currency to buy the shares, and the shares themselves. It all went very well, and he swapped the worthless currency for valuable Parisian real estate. But, all Ponzi schemes, bubbles and manias eventually end, and the currency became worthless, and the people chased him from France. He died in Venice a pauper with large gambling debts.
However, the astonishing act of creating something from nothing was not missed by other governments, and 300 years later that which was once considered an outrage against the people is now standard operating procedure for just about every government in the world. Sure, the politicians will tell you that everything is fine, and that the Gold backed currency (or similar) are relics of the past, but then they would say that, wouldn’t they? You can’t invent money to buy votes if you actually have to come up with the wealth through tough decisions and fiscal management.
Because now they’re trying to sell you on the idea of Carbon credits, and you don’t hear a lot of politicans bagging that idea, when it’s clearly just as much lunacy as unbacked paper currency was once considered to be, before everyone just got used to it and no longer questions why.
Of course, the events of the Mississippi company bubble affected the United States greatly in two ways : First, the founding fathers knew the dangers of unbacked paper money and thus forbade it in the constitution. Second, the bankrupt French government eventually handed over the entire French holdings in the Louisana Purchase.
Thus the USA was on a Gold standard, which it managed to not only keep but consolidate after the second world war with the Bretton Woods agreement (the British dropped the link to silver after massive war debts after the first world war) and established the USD as the de-facto global monetary standard.
This was all well and good until governments do what politicians like, and that is to start wars and invade people either for land, kicks, religion, some sort of ‘ism’ or just plain old glory on the battlefield. The war of choice for the newly powerful USA was Vietnam, and of course they spent so much money that foreign debtors around the world looked like they might ask for Gold in replacement. Nixon took one look at the amount of currency circulating vs the pile of Gold in Fort Knox, and said ‘no gold anymore’. Thus kicked off rampant inflation in the 1970’s. So much so, that a 1970 dollar is worth about oh, 5 cents today. Given the exponential growth in debt since then, you can be pretty much assured that your 2010 dollars are going to be worth about, oh, 5c in 2030? That’s if you’re not already using Yuan to buy your groceries in 203 like they use USD in Zimbabwe.
And if you’re tempted to swell with national pride and say ‘it can’t happen here’, then you might like to look at the list of countries where it has happened in the past. All proud, powerful nations at one point – you mightn’t think so today necessarily, but before their currency devaluation they certainly were. Kind of like how a Cadillac doesn’t seem a big deal today, but once it really meant something. Germany, Italy, Brazil, Mexico, Argentina, Zimbabwe.. the list goes on and on.
BTW – the above poster who said something about the Russians having all the Gold – I imagine this was the political line spun at the time, but it’s not the main factor in the version of history as I understand.
Let’s look at the bright side. Maybe when cap & trade or a carbon tax passes we could ask for those trillions it’s going to cost us to be paid Zimbabwe money.
Over the long run, governments only have two ways of paying their bills.
Taxation or inflation
Ha ha funny! Wait a minute… what is the US dollar based on again?