How to Become a Trillionaire
Did you know you can become a trillionaire with less than $20? In 2008 Zimbabwe was in a period of hyperinflation. Over a couple of years, the purchasing power of the Zimbabwe dollar dropped by an astounding 500 billion percent. By 2008 the “value” of money had so many zeros that a major bank’s automated teller machines began showing “data overflow errors” after customers withdrew too much money. This issue continued for years. By 2014 the Zimbabwe Central Bank allowed the U.S. dollar, South African rand, Botswana pula, British pound sterling, euro, Australian dollar, Chinese yuan, Indian rupee, and Japanese yen as legal tender. Soon after, in 2015, the bank began reducing the value of the Zimbabwe dollar in favor of replacing it with the U.S. dollar. At the end of the year, Zimbabweans began exchanging their currency for USD at a rate of 5:175 quadrillion.
What Is Hyperinflation?
To understand what led to this event, we need to understand the word “hyperinflation.” Inflation is when the purchasing power of a currency decreases. In simple terms, it means you get less bang for your buck. When prices rise over 50 percent each month, an economy has reached hyperinflation. You could buy beef for $5.75 per pound one day, $7 the next day, and so on. Side effects of hyperinflation include some interesting high-denomination bills.
Germany & Hungary
Another story of hyperinflation occurred in Germany after World War I. Germany surrendered and was forced to sign the Treaty of Versailles, which forced Germany to pay war reparations to the Allies. Thus, Germany began to print way too much money, and this led to the value of money dropping. Plus, Germany stopped backing its currency with gold, and the value of money dropped so low that the bill was worthless. To get the economy out of this downward spiral, Germany eventually introduced a new standard and several other changes.
The record breaker for hyperinflation occurred in Hungary after World War II during the Soviet takeover. In the peak days, prices doubled every 15 hours! The pengo underwent revaluation by the end of 1946. At that time, it was estimated that all the Hungarian notes in circulation were only worth 1/1,000th of a U.S. dollar!
Collecting Zimbabwe Notes
Numismatics is the study of currency and history, not just collecting currency. Learning why these things happen can prevent future economic crises. Even though these high-denomination bills can seem interesting and full of history, people suffered a lot during these times. On the paper currency collecting side, these bills are not particularly pricey, as residents of Zimbabwe sell some of these notes to tourists. Showing non-numismatists these notes can spur some very entertaining reactions.
The $100 trillion Zimbabwe bill, for example, normally sells for around $100. However, this price is dependent on condition. Many lower denomination Zimbabwe notes exist, like the $10 trillion and $100 billion, which collectors can purchase at a show for under $20. These notes are fascinating, with tons of history behind them. One of these bills can be an excellent piece to add to your collection, even if you do not usually collect paper currency.
Joshua Verley is a 15-year-old numismatist from Minnesota. He is a freshman in high school and has written articles for the ANA’s Your Newsletter and CONECA’s Errorscope. He also enjoys writing on the ANA Member Blog. He mainly collects error and variety coins, 19th- to 21st-century U.S. type coins, and copper coins.