There's a lot of ruin in a nation


But ruin is not something in infinite supply in any nation:

From Monday, customers who held Zimbabwean dollar accounts before March 2009 can approach their banks to convert their balance into US dollars, the governor of the Reserve Bank of Zimbabwe, John Mangudya, said in a statement.

Zimbabweans have until September to turn in their old banknotes, which some people sell as souvenirs to tourists.

Bank accounts with balances of up to 175 quadrillion Zimbabwean dollars will be paid $5. Those with balances above 175 quadrillion dollars will be paid at an exchange rate of $1 for 35 quadrillion Zimbabwean dollars.

The highest – and last – banknote to be printed by the bank in 2008 was 100tn Zimbabwean dollars. It was not enough to ride a public bus to work for a week.

The bank said customers who still had stashes of old Zimbabwean notes could walk into any bank and get $1 for every 250tn they hold. That means a holder of a 100tn banknote will get 40 cents.

At some point simply running the printing presses does run into real problems. Our favourite little story from this whole disastrous episode comes from the final end days of the printed currency. Normally, currency printing is a very profitable occupation. Bit of paper, the price of some ink, and a banknote that is worth whatever the government says it is is created. Right at the end there it's said that the final decision to stop printing was taken one would accept a bank note of any denomination at all, or any number of them, in return for supplying the ink with which to print the banknotes.

There have been hyperinflations before and it's a near certainty that it will happen again, somewhere. But this is the only example we know of where seigniorage was ridden all the way down to the bottom, to the bitter end.