HARARE, Zimbabwe (CNN) — Zimbabwe’s central bank says it will soon introduce a 100 trillion dollar note as the once prosperous country battles to keep pace with hyperinflation that has caused many to abandon the country’s currency.
The Reserve Bank of Zimbabwe said the new notes that includes 50 trillion, 20 trillion and 10 trillion would be released for the “convenience of the public,” according to statement released Thursday.
“In a move meant to ensure that the public has access to their money from banks, the Reserve Bank of Zimbabwe has introduced a new family of bank notes which will gradually come into circulation, starting with the 10 trillion Zimbabwe dollar,” the bank said in its announcement.
Wow! Everybody’s rich! Except … sadly, no:
The new 100 trillion dollar bill would be worth about $300 in U.S. currency. A loaf of bread in Zimbabwe now costs about 300 billion Zimbabwean dollars — and like most commodities, the price increases every day.
Earlier this month, Zimbabwe introduced a 50 billion dollar bill as the country battles to fight cash shortages stemming from the world’s highest inflation rate. The official rate was 231 million percent as of July.
The currency is in free fall, forcing traders to peg their prices to international currency to hedge against losses. The Zimbabwean dollar is facing extinction, with most traders now accepting other countries’ notes, claiming that they import their products.
In 1934, The Federal Reserve ordered the Bureau of Engraving and Printing to produce 42,000 Gold Certificates with the denomination of $100,000, bearing the portrait of Woodrow Wilson. The Wilson Gold Certificate is the largest denomination of currency ever produced by the United States, and was used exclusively in private circulation between Federal Reserve banks.
Today, though, one has to wonder if it would not be prudent for the Federal Reserve to produce a new $1 billion Treasury Bond Certificate, perhaps bearing the portrait of The One seated on top of a huge mountain of government debt. The back of the bill could have a group portrait of Barney Frank, Chris Dodd, Nancy Pelosi, Harry Reid, Ben Bernanke, Henry Paulson, and perhaps a few smiling Chinese investors. The bills could be circulated between The Federal Reserve, Wall Street investment banks, and the Big 3 automakers (although I would suspect that the ones headed for Detroit would mysteriously disappear, never to be seen again).
We’re not in economic freefall — yet. But the insatiable desire of our government to spend money, and simply print more when they seem to be running out, could very well lead to a repeat of the runaway inflation of the 1970’s, in which case a $100,000 bill might eventually be common-place. President Obama is reportedly poised to call on all Americans to be “responsible.” I hope that goes for the government as well, but I’m not holding my breath.