Sunday, July 20, 2008

Zimbabwe Introduces $100 Billion Banknotes

HARARE, Zimbabwe (CNN) -- Zimbabwe's troubled central bank introduced $100 billion banknotes Saturday in a desperate bid to ease the recurrent cash shortages plaguing the inflation-ravaged economy.

As high as they are, though, the bills still aren't enough to buy a loaf of bread. They can buy only four oranges. The new note is equal to just one U.S. dollar.

Once-prosperous Zimbabwe has seen an unprecedented economic meltdown since it gained independence in 1980, with the official inflation rate now at 2.2 million percent.

MP: The entire U.S. money supply of currency is $770 billion.

HT: Ben Cunningham

6 Comments:

At 7/20/2008 9:56 AM, Blogger Sophist said...

MP: The entire U.S. money supply of currency is $770 billion.

How to you measure money suppy? Do you mean $770 billion is the hard currency in circulation?

According to some official measures, about 200 million Americans are over the age of 21. Thus, according to your figure, the average currency holdings per person is $3,850. What does this mean?

(1) There many poor people in the US

and/or

(2) There is a lot of virtual money issued in the US

and/or

(3) There is money circulating not accounted for in your figures

and/or

(4) your figures are wrong

and/or

(5) you think of it...anything goes...but something is wrong here...

 
At 7/20/2008 10:41 AM, Blogger holeydonut said...

Sophist - if it makes you feel any better, the Federal Reserve Bank of New York shows M1 money supply at 1.4 trllion.

http://www.newyorkfed.org/aboutthefed/fedpoint/fed49.html

But keep in mind that... "M1, is restricted to the most liquid forms of money; it consists of currency in the hands of the public; travelers checks; demand deposits, and other deposits against which checks can be written... more than half of which consisted of currency."

So the prof is right - the currency supply is probably close to $770B in the USA.

Not that it matters since the point was to show how stupid it is to have a $100B bank note.

 
At 7/20/2008 12:21 PM, Anonymous Anonymous said...

Sophist, it's currency, coin and cash. Do you have $3800 in bills laying around? I know i don't.

 
At 7/20/2008 12:41 PM, Anonymous Anonymous said...

"Do you have $3800 in bills laying around? I know i don't."

What would happen if everyone wanted to have their bills laying around pal?

 
At 7/20/2008 3:42 PM, Blogger BlogDog said...

Wow. That Mugabe is making more billionaires than anyone else.

 
At 7/20/2008 4:50 PM, Blogger Mark J. Perry said...


Link here for Currency Component of M1
from St. Louis Fed.

 

Post a Comment

<< Home