Wednesday, August 19, 2009

Zim$, eBay, Inflation and something for free.

Stacks of worthless Zim$$ in my office

Yesterday I bought 7300 notes of ZIM$ from a friend from Zimbabwe. Needless to say, the notes only have collectors value. But it is fascinating, the kids had a ball when all the notes were on the table. We threw them in the air and after repacking them my sons (13 + 10) said : "dad, let's split up and meet in a few months time in the Bahama's". This says as much about the time they spend behind the TV (we insist: only in the weekend) as about our parenting skills. My Zim friend spend 1 1/2 hours counting the notes with 3 people. We spend 1 hour stacking them with the whole (5) family.
Included were old and new notes, with/without scribblings and telephone numbers on them, expired notes, agro-cheques, all colours of the rainbow, etc, etc. I am not a collector but am thinking hard what to do with them.

Now here is a tricky question for you. I will promise to send the first ten (10) correct answers a note of min. 100.000.000.000 (100 Billion) Zim$ per snail mail. No questions asked. For fun.

The question is:

"If I would offer these 7300 notes to eBay to sell, the price per note would drop, no? I mean: this is supply & demand. Easy!
But inflation is the increase in money supply! My offer of 7300 additional Zim$ notes on eBay is an increase in money supply which means the price per note has to go up!
My offer is inflationary!
Ehh.....
So what will happen according to you?"

Confused? You shouldn't be.

Read also the excellent piece on inflation of mr Janszen of iTulp.

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