Archive for the ‘Money’ Category

Today’s big number encounter comes in the field of big money. Well, worthless big money. In Zimbabwe, they’re offering a nice deal whereby you can take 35 quadrillion Zimbabwean dollars and trade those in for $1 US.

This is the kind of wonderful thing that can happen to you when your country’s economy experiences hyperinflation. On steroids. While the US economy is going through an extended stretch of fairly low inflation, near 1% per year, in Zimbabwe the economy in 2008 was “rocketing” up (in a bad way) with an inflation rate of 500 billion percent. That can cause your hard-earned money to become worthless almost before you can run it to the store to buy something.

(Note for small number people: 1 quadrillion is 1000 trillion, 1 trillion is 1000 billion, 1 billion is 1000 million.)

To give some perspective on this exchange: If you managed to carry in the Empire State Building for an exchange in weight like this (35 quadrillion to 1), you’d walk away with about a quarter of an eyelash worth of weight. And the party that received the Empire State building would have some serious explaining to do to someone. Such as, Why is one of your eyelashes a bit shorter than the others??!!??

1400 bills for a cup of Starbucks coffee. Oops - hyperinflation. Now 1500 bills.

$100 Trillion Zimbabwe — a whole lot of nothing

Oddly, the 1-to-35 quadrillion rate only applies to money in the bank. If you happen to have your money in bills, you get $1 US for a mere 250 trillion Zimbabwe dollars. Which means that cold hard cash is actually 140 times more valuable than bank-account cash, using the word ‘valuable’ in its most worthless sense possible. See? Keeping your money in your mattress is a good idea after all. Never put it in a bank.

Currently these bills can be purchased through eBay; the $100 trillion bill is selling for a little over $30 US. It’s worth 40 cents. Plus some obvious sentimental value for owning a bill of such magnitude.

$50 disappearing money act

4 big Zimbabwe bills (worth 72 cents US). And a $1 Zimbabwe — worth 0.4 pico-cent

How much daily inflation (compounded daily) does it take to get an annual inflation of 500 billion percent? It’s a surprisingly low 6.31% daily inflation rate. So something that costs $1 one day costs $1.06 the next day, and $1.13 the next day. But after a year at this inflation rate? It now costs $5 Billion. That’s …

1.0631 x 1.0631 x 1.0631 x … [do this 365 times] … x 1.0631 = 5 billion

… which is 500 billion percent.

To put this in other terms, if you start with enough money to buy a new car (say $20,000) but take your time picking one out, then

  • After 3 months you can barely afford one cheap tire
  • If you waited another month you could just afford a new windshield wiper blade
  • If you waited yet another month, take the money inside the car dealer and hope there’s a gum ball machine somewhere

BUT (queue spooky music), it may have been worse than that. Much much worse. To about the 100th power. Big number people are going to like this other analysis of the Zimbabwe inflation numbers, HERE, which actually uses the number “6.5 quindecillion novemdecillion percent” in its title. That is a big number, 6.5×10108, which only occurs in print approximately once every quindecillion (1048) novemdecillion (1060) years. Meaning its last occurrence was long, long before the start of our universe.

If you are one of the 3 people on earth who actually cares about such big numbers, you can consult the wiki here to find your list of favorite things. Your first thought might be, why didn’t they call it 6.5 quattuordecillion (1045) vigintillion (1063) instead?? This is a deep mystery that one of you three should go investigate. In any case, this is much more intriguing because it gives a daily inflation rate of 96.2% — meaning prices double every day or so. The time between receiving your pay and spending it becomes critical in these circumstances. And for the weight exchange, rates may have been as high as $1030 Zimbabwe  to $1 US, meaning you get back maybe a molecule of hemoglobin (10-22 kg) from someone’s blood for the Empire State Building. So the current exchange rate is actually a real boon to consumers.

Now it’s time for the … Always-reliable-calculation review:

Empire State Building weight = 365,000 tons = 331.82 million kg

Exchange: (331.82 x 106) kg / (35 x 1015) = 9.5 nano kg = 9.5 micrograms

Weight of eyelash: somewhere around 35 or 75 micrograms.

So the exchanged weight is a quarter of an eyelash in weight, or less, more or less.

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