Inflation, or ‘funny money’


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Inflation, or ‘funny money’


Inflation, or ‘funny money’



Inflation, or ‘funny money’

  • This program is NOT about spending money, or saving money, or making money, or investing money, or even about giving it away.

  • It’s about the physical stuff that you can hold in your hand – and that you have in pocket, purse or bank account right now. .

  • and about what happens when there’s too much of it -- inflation



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’

  •     But, if there’s wild inflation, money loses its usefulness.

  • No one wants it, because no one knows what it’s worth – or might be worth tomorrow, when you cashed

  • a check.



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’

  • It’s a modern African country: here’s the capital, Harare, formerly Salisbury (Rhodesia).



Inflation, or ‘funny money’

  • It has a Central Bank, and central bank head:



Inflation, or ‘funny money’

  • It has industry, like this copper smelter:



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’

  • The first currency (1980) from the new Republic of Zimbabwe was this $2 bill:



Inflation, or ‘funny money’



Inflation, or ‘funny money’

  • These balancing rocks, in a park near Harare, appear on almost all Zim currency.



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money

  • By 2003, the nation was slipping into economic chaos. Money was hard to come by. The Cargill Cotton Co., printed bearer checks used as cash.



Inflation, or ‘funny money’



Inflation, or ‘funny money

  • Printing, in Germany on security paper, lagged, and special travellers’ cheques were issued --$5,000, $10,000 and $20,000.



Inflation, or ‘funny money

  • Here’s a $20,000 check, used this time but not countersigned.



Inflation, or ‘funny money’



Inflation, or ‘funny money’

  • The new money was dated August 1, 2006;. So sure was the government that it had whipped inflation that it also issued cents:



Inflation, or ‘funny money’

  • But inflation returned quickly:



Inflation, or ‘funny money’



Inflation, or ‘funny money’

          • In April 2007, along came checks for $25 million and $50 million. On May 5, they added $100 million and $250 million – and 10 days later, with inflation raging-- there was a $500 million check.


Inflation, or ‘funny money’

  • Bananas were somewhat costly:





Inflation, or ‘funny money’

  • So in July 2008, they lopped off 10 billion dollars – 10 zeros– and started over.

  • On August 1, there were new agro-checks for $1, $5, $10, $20, $100 and $500.

  • On September 11, the $1,000 bill arrived.



Inflation, or ‘funny money’

  • No stopping it now:

  • Sept, 29 – $10,000 and $20,000

  • Oct. 13 -- $50,000

  • Nov. 3 -- $100,000, $500,000 and $1 million

  • Dec. 4 -- $10 million, $50 million and $100 million. More More !!!



Inflation, or ‘funny money

  • On 26 June 2008, the Zimbabwe Independent reported annual inflation rose by 7,336,000 percentage points to 9,030,000% by June 20.

  • It was set to end the month at well above 10,500,000%.



Inflation, or ‘funny money’



Inflation, or ‘funny money’

  • Dec, 8, 2008 -- $200 million

  • Dec. 12 -- $500 million

  • Dec. 19 -- $1 billion, $5 billion, $10 billion

  • Jan 12, 2009 -- $25 billion, $50 billion

  • Jan. 16 -- $10 trillion, $20 trillion, $50 trillion, $100 trillion.

  • Oops! Start over again.



Inflation, or ‘funny money’

  • Yes, trillions:



Inflation, or ‘funny money’

  • Zimbabwe's Annual Inflation Rate is now 516 Quintillion Per Cent Dec. 2, 2008

  • Hyperinflation has Zimbabwe in the throes of a financial crisis The monthly inflation rate is currently running at 13.2 billion per cent …

  • The latest figures put the annual inflation rate at 516 quintillion per cent. That's 516 followed by 18 zeros.



Inflation, or ‘funny money

  • Hundreds of trillions, the highest denomination ever:

  • :



Inflation, or ‘funny money’

  • Feb. 2, 2009

  • Lop off one trillion – 12 zeros.

  • Start over with new notes

  • $1, $5, $10, $20 $ 50 $100 and $500.



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money’



Inflation, or ‘funny money



Inflation, or ‘funny money

  • Let’s put all the zeroes back:

  • 1 2009 new Zim dollar equals

  • (000, plus 0,000,000,000, plus

  • 000,000,000,000) or

  • 1,000,000,000,000,000,000,000,000+

  • of the dollars we started with in 2005

  • Wow!



Inflation, or ‘funny money

  • In Zimbabwe, they quit using security measures on high-denomination banknotes: the quality printing was too costly, and the notes almost worthless by the time they could be counterfeited.

  • Printing took place in Harare, by litho.

  • Most of the notes, even crisp uncirculated, are worth very little today.



Inflation, or ‘funny money

  • Two sets of notes are hard to find. They are the bearer cheques written on the Standard Chartered Bank, by Cargill, a cotton producer.

  • They circulated for a few months as currency.

  • Most were used and then cancelled.

  • .



Inflation, or ‘funny money

  • Soon thereafter the Reserve Bank of Zimbabwe issued a series of so-called “emergency travelers cheques”… which are also not too easy to find.

  • Then came government bearer cheques, and special Agro-cheques, in place of bank notes. They are common.



Inflation, or ‘funny money

  • Breaking News -- December 2010:

  • Zimbabwe's President Robert Mugabe says his country will nationalise all US and UK companies operating in the country unless Western sanctions are removed. He told a Zanu-PF party conference it was time to fight the sanctions imposed on him and party leaders. Mr Mugabe also said it was time to end power-sharing with the party of Prime Minister Morgan Tsvangirai. The agreement with the MDC, struck in 2008, is due to expire in February..



Inflation, or ‘funny money

  • It was that power-sharing agreement after contested elections in 2008 that finally put a halt to the ruinous inflation.

  • Stay tuned for updates in 2011.

  • -- B.E.




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