Posts Tagged ‘money’

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.


Read Full Post »

Billionaire Paul Allen has shown his seasoned business skills  as he tries his hand at an autobiography. Namely, he’s using the best practice of trash-talking about someone famous in his upcoming book, and getting that word out to generate interest ahead of the release date, in order to maximize sales. A recent article (click here) on the book gives a reasoned, thoughtful analysis by immediately jumping to and focusing on the Bill Gates / Paul Allen conflicts. (The book excerpt is in Vanity Fair, here.)

Click on pic and imagine the fun

A quick re-cap for those who have forgotten: In the glory years of the Microsoft wealth generating machine, founder Bill was the winner with several bazillion dollars, or roughly enough to build an escalator to the moon. Founder Paul was the loser since he got a few bazillion less, so he can only build a staircase to the moon. But at least it’s lighted and plays music the whole way, with periodic updates on Allen’s professional sports teams.

The newspaper article / book preview dwells at some length on an intriguing episode with these two. It turns out that one of them (Paul) had a bout with cancer and allegedly came to the insight about his partners (by hearing them say it) that they were contriving ways of cutting him out of the wealth machine.

One should always be cautious about embracing everything an author says about himself, especially when the impression is created that the author is thereby due for some Nobel Prizes and a sainthood or two. But that caution should be cast to the winds if the story is juicy enough. Which this is.

I am sure that there are some good potential sequels to this story, so we should now jump in and anticipate what they might look like. In Star Wars fashion, the future editions could be about the past.

Quick disclaimer at the advice of my legal counsel: Any apparent connection in the rest of this post to actual incomprehensibly rich people who could sue me into oblivion is purely coincidental. Characters and their names are fictitious and were chosen randomly from common names like Bill and Paul. I love everything about these ficticious characters, especially if they want to hire me at a generous, non-fictitious salary.

So here are some possibilities. The first few paragraphs of that review will give some context if desired. These are autobiographical pieces from fictitious-Paul’s perspective.

Chapter excerpt: The Lemonade Stand Adventures

When we were about 8 or 9 years old (before we had actually met, guaranteeing the fictitious nature of this story), we created a lemonade stand business. Bill tended to be pushy with the customers and staff, while I was more logical and kind. He was a real wizard at making lemonade but became irritated with me when I got distracted by mosquitoes or dirt or the occasional snake that would slither by. One day I got delayed because I was saving a kitten from drowning and helping feed a family recently made homeless by a meteor strike. When I got to the lemonade stand, Bill was stuffing all of the week’s proceedings into his pocket.

I couldn’t believe he would do that just because I was a little late that day. And I think I forgot to mention: I had been further delayed that morning because I had to drag an old lady off the road, where she had fainted crossing the street and was about to be run over. Sure, there was some personal risk, but I didn’t dwell on it.

In any case, Bill pulled out a few quarters and handed them over to try to appease me. We argued for a while (him passionately and irrationally, me calmly and coolly with an emphasis on piercingly clear logic) and finally Bill reluctantly agreed to give me an additional $2. That meant he only kept $17.12 for himself that day. I knew this was an important victory for me. He left with a faraway look in his eyes, muttering something about escalators.

Chapter excerpt: Sand Castle Days

I recall an even earlier event (we around 5 or 6), when we happened to be on the same sandy beach one warm weekend. I had been having fun building sand castles for a while. Even at that early age I approached this with reason and logic. A scrawny wild haired kid wandered up and watched me for a bit. “I’m sure I can build a better sand castle than you,” he stated matter of factly. I shrugged my shoulders.

The boy, who I later learned was named Bill, jumped in passionately. But not always with my reflective demeanor to spot potential problems before it was too late. An occasional big wave would sneak up and knock out part of his castle, leading to minor fits of rage directed at the ocean. I tried to help with a few perceptive observations, such as how he could use a moat and a wall on the ocean side to reduce some of the wave’s impact.

After a while Bill got the idea to try making money off our castles. When someone wandered by he would ask them if they wanted a tour, and when he was done he had a way of suggesting they share a tip. It usually worked; most people weren’t used to being hustled like this by youngsters, and they thought it was cute. Mostly they wanted to inspect my castle area, and Bill was happy to share “our” development.

After we had received several tips, Bill asked if my eye was sore. I didn’t know what he was talking about. But he insisted that I was obviously in pain and that I should go over to my mom and get it taken care of — that it looked really bad. So I wandered off to my mom but she didn’t see any problem. When I got back to the castle area, I found that only my castle had mostly been destroyed. Bill said it was a wave but it didn’t seem wet there. “Dried fast” he said.

Then he went on to describe how we should share the money. “Well, your castle didn’t hold up too well,” he remarked. Then he showed off some of his early grasp of mathematics. “70 – 30 split” he suggested. When I didn’t respond immediately, he quickly went on, “I mean 80 – 20. Yes, I could live with 80 – 20.” He seemed to be talking to himself. I was about to ask him about this when he said he heard his father calling, and he immediately ran off after giving me a dollar.

I bought licorice.


Well if you “know” of any other adventures of this highly fictitious pair, send them in and enlighten the rest of us.

Read Full Post »

%d bloggers like this: