Zimbabwe prints $100 billion bill

arbilad · Head Chef

Zimbabwe prints $100 billion bill

Cocobeem · Keeper of the Holy Grail

Holy mackerel! Makes you want to take your money out of the bank, doesn't it? I mean, when something like that hits, you could have a couple years' salary in there and it won't mean diddely squat. Pretty soon you won't even be able to buy a loaf of bread...

Does this make anyone want to have more hard assets and less liquid assets?

Jen · Senior Bucketkeeper

Do you live in Zimbabwe coco?

arbilad · Head Chef

We have really bad inflation, but we don't have hyperinflation. And hopefully we won't, although it looks possible.
Think of it this way: Congress is thinking of extending an unlimited credit line to Fannie Mae and Freddie Mac. Where will they get that kind of money? If they start failing, they hold $5 trillion in assets. The government can't just borrow that kind of money. They'd probably wind up just printing it. Imagine what that would do to inflation.

Cocobeem · Keeper of the Holy Grail

See... I think it's *possible* that money, as in cash in the bank, may someday not do us much good.

arbilad · Head Chef

Ah, come on, you don't mean that Zion's Bank, the Lord's bank, could ever fail, do you?

Cocobeem · Keeper of the Holy Grail

Teehee...

I lost faith in them when they sprung the "We're gonna' merge with First Interstate and change our name!" crap on us. Clearly they aren't following the Spirit.

Pt314 · Senior Member

Thats pretty big, but according to this wikipedia article on Hyperinflation , it has nothing on post WWII Hungarian currency.

The largest denomination banknote ever officially issued for circulation was in 1946 by the Hungarian National Bank for the amount of 100 quintillion peng²⁰). image (There was even a banknote worth 10 times more, i.e. 10²¹ peng, printed, but not issued image.) The banknotes however didn't depict the number, making the 500,000,000,000 Yugoslav dinar banknote the world's leader when it comes to depicted zeros on banknotes. The Post-WWII hyperinflation of Hungary holds the record for the most extreme monthly inflation rate ever 41,900,000,000,000,000% (4.19 × 10¹⁶%) for July, 1946, amounting to prices doubling every fifteen hours.

Heres some more

Hungary: Hungary went through its worst inflation in modern history in 1945-46. Before 1945, the highest denomination was 1,000 peng. By the end of 1945, it was 10,000,000 peng. The highest denomination in mid-1946 was 100,000,000,000,000,000,000 peng. The rate of inflation was 4.19 quintillion (4.19 x 10¹⁸) percent. A special currency the adópeng - or tax peng - was created for tax and postal payments [1]. The value of the adópeng was adjusted each day, by radio announcement. On January 1, 1946 one adópeng equaled one peng. By late July, one adópeng equaled 2,000,000,000,000,000,000,000 or 2×10²¹peng. When the pengo was replaced in August 1946 by the forint, the total value of all Hungarian banknotes in circulation amounted to one-thousandth of one US cent. ^[7] It is the most severe known incident of inflation recorded, peaking at 4.19 × 10¹⁶ percent per month (prices double every 15 hours). The overall impact of hyperinflation: On the 1st of August, 1946 400,000,000,000,000,000,000,000,000,000 or 4×10²⁹ (four hundred octillion [ short scale ] ) peng became 1 forint.

One source [2] states that this hyperinflation was purposely started by trained Russian Marxists in order to destroy the Hungarian middle and upper classes. The 1946 currency reform changed the currency to forint. Previously, between 1922 and 1924 inflation in Hungary reached 98%.

-- Edited by Pt314 at 09:36, 2008-07-22

LoudmouthMormon · Profuse Pontificator

I read a while back that the German company who has printed money for them for the last umpteen years, buckled to international pressure, and has quit printing. They're probably running rolls of toilet paper through a fax machine now.

Just think - last month's $1 billion dollar bills are almost worthless - all of your $100 million bills from January are worthless - last year's $1 million dollar bills are less than worthless.

Take a look at Ebay - you can buy a $5 billion dollar note for thirty-five US greenbacks.

Dang.

-- Edited by LoudmouthMormon at 12:00, 2008-07-22

lundbaek · Profuse Pontificator

Cocobeam, into what would you put your money if you took it out of the bank? One never knows when one will need cash in a hurry. And lots of it.

Monetary inflation = devaluation of a currency = loss of purchasing power = theft. "The Creature From Jekyll Island" by G. Edward Griffin gave me the best understanding of what is happening to US currency. Each chapter is summarized, if one dosen't want to flog thru the whole book. It exposes perhaps the greatest scam in American history foisted on the Americans.

lundbaek · Profuse Pontificator

Have a look at this, even just the first several paragraphs.

http://www.theantechamber.net/UsHistDoc/CreatureJekyllIsland.html

Pt314 · Senior Member

Look a bit further on that Ebay page, and you can see someone selling a 25 billion Zimbabwe dollar bill for 99 cents.

Cocobeem · Keeper of the Holy Grail

lundbaek wrote:

Cocobeam, into what would you put your money if you took it out of the bank? One never knows when one will need cash in a hurry. And lots of it.

Interesting, I've just been wondering about that. I'd have to say real estate (property and/or residences like duplexes or small apartments possibly, to help friends/family that may lose their homes) and food storage.

I heard when the inflation was so high (bringing it down to what this actually means to people) that if you didn't buy food with your paycheck on Friday, you couldn't afford the same food by Monday.

My concern is that you could feel pretty "secure" with cash, but once it's worth a tiny fraction of what you expect (a year's salary can now buy you a day's worth of food for your family?) ... you might have wished you'd bought more "hard assets" while you could. I'm thinking land and food might be the best approach...? What do you think?

arbilad · Head Chef

Coco, it depends on what you think is coming. If you simply want to preserve your savings through a coming dollar devaluation and recession or possible depression, then precious metals are a good way to retain the value of your savings over time.
If you see a "food storage" type situation coming up, then investing in food and other survival supplies would be wiser. You can't eat gold. Actually, I guess you can, but you don't really get nutritive value out of it.
You can try a mix of the above if you want to hedge your bets.
Praying about it would be a good course of action.

lundbaek · Profuse Pontificator

We have to think from a different prespective, from the perspective of Ma and Pa Kettle with kids and grand kids that might need to move in with us AGAIN, who might (no doubt will) need to pay cash for unexpected medical and dental repairs, who might need to bankroll one of our kids & family in event of a job loss, who might need to meet any of a number of other expenses a couple in their 70s could get hit with at any time, and who's fixed retirement income is just that: fixed.

Coco's idea of food concurs with what the Lord's top representatives here have advised us to stock up on. Land may be good for certain families, although there are possible expensive liabilities associated with owning land. Gold and silver should retain value provided whatever government we might find ourselves under does not confiscate it and prohibit its use as a means of exchange. That's happened before with gold, and although we do keep some, I expect it will happen again in our country. Investment in a business that will generate income (cash or barter) regardless of the economic environment might be a good idea. But believe me, that can be scary.  About 15 years ago we lost about $50K in today's 2008 $s in a business we had prayed and fasted over before getting into it, and had felt good about it until after it was too late.

I better mention here and now that during our 2 recent couples missions we had a positive cash flow. Not that I believe in trying to bribe the Lord, because I do not.  We knew of people who had to leave their mission because of laack of funds.

A ward member I am close to here, age 57, just lost his job, has hefty medical expenses ahead for both himself and his wife, has 5 kids that could come running home at any time, and has medical problems that will greatly hinder his finding a new job.  All he has to sustain him and his wife is a 401k that he figures will last about 4 years. A pretty desperate situation, although he has supportive family already gearing up to help.

So these are just some of the things one needs to think about.

Cocobeem · Keeper of the Holy Grail

The whole "can't trade a barrel of gold for a bushel of wheat" thing sort of turned me off of precious metals, although I have a little silver.

arbilad · Head Chef

Well, that and the fact that the Lord has told us to get our food storage, but he's never specifically told us (in this dispensation) to get gold. If gold is part of your financial independence strategy, that's great. If not, then you can still consider yourself to be living wisely without any gold.

LoudmouthMormon · Profuse Pontificator

Well, if there's no food, gold won't do you any good. Think of post-hurricane Katrina - those were a scary couple of days while the trucks were rolling in.

But if you think of the scope of hard times the human race endures, running out of food accounts for a tiny, tiny fraction of hard times.

For example, in the '90's, Argentina had the same sort of inflation Zimbabwe is experiencing. It's economy collapsed. One 'preparedness minded' guy who lived through those times in Argentina wrote an account about what life was like, and here's what he said about gold.
Someone hit me in the head please because I messed up about the gold issue.
Everyone wants to buy gold! I buy gold. Pay cash signs are everywhere, even on TV! I cant believe Im that silly!
I just didnt relate it to what I read here because they deal with junk gold, like jewelry, either stolen or sold because they needed the money, not the gold coins that you guys talk about. No one pays for the true value of the stuff, so big
WARNING! Sign on people that are buying gold coins.
Since it is impossible to determine the true mineral percentage of gold, small shops and dealers will pay for it as regular jewelry gold.
What I would do if I were you: Besides gold coins, buy a lot of small gold rings and other jewelry. They should be less expensive than gold coins, and if the SHTF bad, youll not be loosing money, selling premium quality gold coins for the price of junk gold.
If I could travel back in time, Id buy a small bag worth of gold rings.
Small time thieves will snatch gold chains right out of your neck and sell them at these small dealers found everywhere. This is VERY common at train stations, subways and other crowded areas.
So, my advice, if you are preparing for a small economical crisis, gold coins make sense. You will keep the value of the stuff and be able to sell it for its actual cost to gold dealers or maybe other survivalists that know the true value of the item.
In my case, gold coins would have been an excellent investment, saving me from loosing money when the local economy crashed. Even though things are bad, I can go to a bank down town and get paid for what a gold coin is truly worth, same goes for pure silver. But where I live, in my local are small time dealers will only pay you the value of junk gold, no matter what kind of gold you have. So, Id have to say that if TSHTF bad, gold jewelry is a better trade item than gold coins.

LM

Organist · Senior Member

What if people realized that gold has very little actual value? There's not much you can do with it unless you can convince others that "hey, this shiny piece of rock is worth a lot of money, give me food and shelter and work for it."

lundbaek · Profuse Pontificator

Gold and silver are of no value to us other than as a possible inflation hedge. For example, the little gold and silver we have would fetch about the double the greenbacks as we gave for it, although the greenbacks have about 1/2 the purchasing power as when we bought the gold and silver. Other than that, I guess it helps keep my teeth working.

It seemed to me that gold especially is a more common store of wealth in the mid-East and the area around the Med. I've seen a few natives out there carrying gold coins around with them of a necklace.

arbilad · Head Chef

Gold and silver have a lot of value in industrial applications. Also, colloidal silver has some value for preventing the growth of viruses.
But I still think that food storage has a lot more value. Back during WWII sugar was very rationed and had a lot of value. There are many instances when having a store of commodities has been quite valuable.
Food itself has been very valuable at times. In the Middle Ages, a pound of black pepper was worth a pound of gold. If international shipping is interrupted by natural disaster or war you'll see the price of a lot of spices shoot up.