Triple Digit Returns on Currency Investment
There are lots of ways to make money in the world. It’s up to us investors to find them. 😉 A couple of years ago I blogged about my investment in Zimbabwean dollars. I purchased some uncirculated $100 trillion Zimbabwean banknotes on the internet and paid CAD $5 for each one. 🙂
Back then I even made a prediction that these notes would be worth $25 each in 2016. Boy was I wrong, lol. It’s now been about 3 years since I purchased my investment. Here are some recent ones that actually sold on eBay within the last day!
Holy mackerel! 😀 Each of my Zimbabwean banknotes is worth over CAD $60 today. That’s at least 1,200% return on investment in just 3 short years. Financial independence – here I come! 😀 If the people who read my previous blog post purchased 15 or 20 of these notes, then they could sell their investments today and be thousandaires! 🙂
Due to runaway hyperinflation what you can buy for a Zimbabwean dollar these days is absolute non-cents. Around the year 2000 the government enacted a policy to redistribute land and resources. Foreign capital stopped flowing into the country. As a result the Reserve Bank of Zimbabwe printed huge amounts of money to pay for labor and services. The value of the Zimbabwean dollar dropped due to an oversupply of currency and prices began to rise. By 2008 prices of food and other goods were literally doubling every 24 hours! At its highest point the annual inflation rate was 230,000,000%. Savers were wiped out. And businesses didn’t know how much to pay their employees or charge customers because there was no price stability, including for labor. All this turmoil caused the country’s GDP to fall 18% in 2008. By 2011, about 72% of the country’s population lived below the poverty line. If the first president of Zimbabwe, President Banana, was still alive today, he would probably be very upset by all damage his successors have done to the nation’s economy. (yes, that’s his real name)
The Zimbabwe currency was abandoned by most people in 2009. Since then the country has stopped printing the currency, and consumers have been using the U.S. dollar and the South African Rand to conduct financial transactions. Last year the government decommissioned the Zimbabwean dollar completely and anyone who still had some could exchange it for American dollars at the official exchange rate set by the government: $1 USD = $35,000,000,000,000,000 ZWD, lol.