Randomly saw this article linked on Coinflation - http://www.bulawayo24.com/index-id-...+govt+agrees+to+supply+coins+to+Zimbabwe.html I'm not sure how credible the news source is, but I thought this concept was pretty interesting. What are your thoughts? One speculation I saw was that they would be receiving a large number of Presidential Dollar coins. Do you think that decrease in US-available supply would be enough to raise the value for any of the "rarer" Presidential dollars? The article content for those who don't like clicking strange links:
Another nail in the coffin of demise, for the Dollar. This Country is the most recent to suffer from extreme hyperinflation. Our debt plus theirs will deliver a severe blow. JMHO
I am having a little problem understanding the logic of the posts. Zimbabwe has been on the US$ since 2009, after the failure of its previous currency. From the way I read it is that Soiled US$ are returning here and some will be converted into US coins and soiled US$ will be destroyed and replaced with new US$. There would be no exchange rate as it would be the same if you had access to the Fed. Reserve or US bank, and took in $1M USD soiled bills and asked for 2 M quarters, 3M dimes, 3M nickels, and 5M cents. Jim
Jim, What's interesting is that if you go overseas where the US Dollar is the de facto currency, you'll find that older, worn bills are viewed with suspicion and oftentimes will trade at a discount for fear of counterfeiting. I don't see how Zimbabwe adopting the US dollar will hurt us myself, besides, it's still the foreign reserve currency of choice worldwide 2/3 of the time.
As far as I know Zimbabwe has not been on the US dollar, they simply allowed the people to start accepting foreign currency rather than Zimbabwe dollars. That has given them the problem of prices in one currency, payments in another, and maybe getting change in a third. (Not unlike the early years in this country.) Now they are scrapping their currency and the others and just going over completely to the US dollar. This should help break the hyperinflation because they can't just keep increasing the amount of dollars in circulation as they could their own. They would have to buy the US dollars from our treasury. If they have no money to buy more they can't dump more into circulation. Plus as shaky as we see the US dollar, to the Zimbabwe people it's as solid as a rock. It has worked in the past too. Ecuador didn't have hyperinflation but it was bad. They adopted the dollar, we shipped them Sac dollars and their economy stablized.
Overall this is very positive for the US. Think about it, it is an interest free loan for the notes, since we will eventually replace them, and pure profit on the coins except the nickels and pennies. Other countries using our currency is always a plus for us.
I was there in March of 2010. They were using Dollars then and I was warned not to except change in their old currancy.
An interesting point is that US travelers can frequently make money overseas by buying old US notes for a discount. If you think you know your currency so as to not accept fakes, older notes usually sell at a discount there. I am not sure why unless they are afraid of forgeries, but in Thailand I buy older $100's and $20's from banks, bring it back here and deposit it in my account. I hear the discount rate is even stronger in other nations.
That's the reason. The Supernote scare some years back got to a lot of people overseas and lead to a refusal of all US larger denominations unless they were new and crisp.
Actually the lower ones are discounted the most. 5, 10, and 20 have a higher discount rate to convert to local currency than 100's, and then they are further discounted as to series age. It is to the point I simply get baht out of an ATM, or take baht out of my Thai bank account, then go to local banks and see what kind of deals they have on US currency.
