Zimbabwean currency == wallpaper

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A newspaper called the Zimbabwean has made an epic advertising. Since it was cheaper, they use Zim Dollar notes instead of paper for billboards and wall murals. What a statement, what a sign of inflation!

While most businesses refuse to accept zim Dollars the currency still exists and apparently again losing its worth rapidly after Gideon Gono (or rather the central bank, he is in command of if you do not like metynomys) removed 12 zeroes.

So... how awesome is this campaign? and what do you think can be done against the FUBAR Zimbabwean economy?

I want some

Nice way of getting people's attention. It reminds me of that episode of the Simpsons, when Mr. Burns was trusted with the trillion dollar bill to help Europe out of a recession in the postwar.

Are they seriously suggesting that people should paint their walls with this tasteless crap?

Apparently it was cheaper to use these banknotes than paper.

Nothing really new - During the hyperinflation 1923 in Germany it was cheaper to use money for heating than coal:



Sometimes banknote were recycled. This banknote of July 1923 has on the front page a face value of 500'000 Marks, which became worthless in Nov. 1923, so a local saving bank used the back of the banknote to issue its own handwritten banknote of 50'000'000'000 Marks on 03 Nov. 1923. When the inflation has been stopped on 15 Nov. 1923 according to the official exchange rate the 50'000'000'000 Marks were worth something like $0.005:





In 1914 the exchange rate was roughly 1$ = 4.20 Mark.

You know, this may be a good plan - just from taking all that out of circulation it may help combat the inflation a little .

I'd just hate to think of how many more thousands of times more valuable the ink and the paper its printed on is worth - what a waste... , really hope they're able to get this piece of work out of power soon.

That was exactly what they did 1923: The old banknotes were declared void and exchanged against new ones to a rate of 4'200'000'000'000 to one new one. This new banknote were issued against the value of nominal credit on all commercial real estate in Germany. The new central bank was only entitled to issue banknotes according to the amount of the credit. This was on 15 Nov. 1923.

Later in 1924 it was also allow to issue banknotes against letters of exchange issued by certain companies of sound structure and size. This mechanism balanced the amount of money and the industrial production and worth of the country per definition.

It worked very well till Hitler started to manipulate the system by allowing the central bank to issue banknotes against letter of exchange of a extra founded company called MeFo. MeFo was owned by some companies of the arms industry, but quarantined by the government and the Reichsbank issued banknotes against this letter of exchange, that again money was printed without a real value in the economy.

This lead 1938 to an inflation, which could be only stopped by price control, which consequently followed a shortfall of consumer goods on the market ("cannons instead of butter"). In Sep. 1939, even after plundering the central banks of Prague and Vienna, this system was to collapse. So Hitler needed the war to save his house of cards. Or better the other way around: Hitler build this house of cards to prepare for the war.

In 1948 it was therefore necessary to make a further currency reform and the introduction of the "Deutsche Mark", which was remarkable stable till the introduction of the Euro, because the central bank, the Deutsche Bundesbank, was independent from the Government.

Yeah, we have a similar house of cards being built over here, not for war but for big government and national socialism. I really hope something smacks the hell out of people over here, I never had the slightest inclination that a President could support a 10 trillion dollar budget over 4 years and smack the nation debt out of the ballpark but apparently style, personality, and liberal self-flagellation really go a long way.

I think it is more complex.

Two things can happen with the Dollar:

1) The package will rescue the economy and the real grow of the economy will start to balance the surplus money created by FED, Congress and Administration. In consequence foreign central banks will be keen to hold Dollar as a reserve currency and will absorb the the extra amounts of "printed" money.

2) This will fail and the US will devalue the dollar against other currencies to pay the debt and will raise inflation.

Both can happen and I will not make any predictions here.

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I already mentioned: There is a big difference between the US/UK and the countries of the Euro-zone. The US/UK can "produce"/print as much Dollar and Pounds as they need in a situation of nearby state default. The countries of the Euro-zone can't - no one can give the European Central the order Bank to print money.

the title to this topic rules

I don't know... I guess I still can't comprehend how you can create value out of nowhere. Its always seemed to me like you can vastly increase the monetary supply and water it way down, in that case everything gets far more expensive to us. Our problem would be that if we did a lot of stupid things to deflate our dollar we'd have rapid devestment by other countries and we'd end up in really bad shape of that. The U.S. is something like the Las Vegas of the world, everyone puts their money in because its been seen as a great investment - that's floated us for quite a while and we're burning up goodwill by the minute. China of all countries is starting to tell us that we're overspending .

Money is not "value" in the strict sense - it more a voucher to get value. A banknote (or a number in an account) is something worth, because the state and society agreed that those figures represent value.

Real value are the good and service within the society. So they are not constant, therefore it reasonable to have a currency which can be adjusted according to the needs of the market. Perhaps have a read of John Maynard Keynes, The General Theory of Employment, Interest and Money, Chapter 17, Paragaraph III:

http://www.marxists.org/reference/subje ... y/ch17.htm

The problem raises, when this adjustments are made not in line with the goods and service on the market. Than an inflation can raise quite quickly.



To go back to my two possible outcomes of Obama's politics: In the first case China would be well off, in the second case China would loose significant wealth. It is therefore not surprissing that China is warning.

China has an other problem: There is no alternative reserve currency around. The ECB will everything to avoid this status for the Euro. Beside the benefit to pay bills internationally with the printing press, a reserve currency means vast amount of your currency outside your control (aka with other cnetral banks). The ECB want avoid such an situation, when the stability of the Euro would be in the hand of China.

Right. The notion I'd had about fiat money was an equation something like Total Goods and Services / # of dollars available in circulation roughly equaling the value of a particular fiat currency, and yes - blowing one out of proportion with the other has drastic effects usually to a negative end (deflation great for foreign investors but causes huge capital losses for individuals and business, rapid inflation being good for equalizing the value of a currency in our case to the world around us but making us much less attractive to foreign investment). I had a chance to take a look at at least the first summary point of the link you gave, definitely want to read a bit more about it.

That said though I won't claim to be an economic whiz, I like to think I can sort out the talking heads though somewhat. I have a feeling that if I go back to school I'll quite likely be seeking my masters in econ just because I think its vitally important and it blows my mind that something this scientific gets batted around (even by the supposed experts) as if it were as loosely corellated to being a strict science as religion or metaphysics - I still can't get my head wrapped around that part of our cultural behavior.



Even if hypothetically the correct members of congress have the most influence and are able to make certain that the spending is on items with high return ratios; it seems like our current powers that be who are putting this together are very serious about making us a wellfare state (Universal Healthcare, government centered economics) - I really would like to think that they won't get their way on that, otherwise yes - China's looking at a much higher probability of the second outcome and of course we're looking at taking on a lot of problems that the much of Europe even is begging us not to make the same mistake on.

is there anything useful in that country
all I am hearing is "YOU WILL BE A KING THERE WITH A FEW THOUSANDS"

Am I right lol

You can run a welfare state quite successfully in term of economics, but only under certain parameters, as to see in Scandinavian countries. Most important you need to get your people to understand that it has to been paid by high taxes. If they are not willing, it will end in disaster.