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The miserably low savings and incomes of the impoverished population were wiped out shopkeepers would frequently double prices between the morning and afternoon, leaving workers’ pay almost valueless by the end of the day. President Mugabe issued edicts to ban price rises, of comedic value were it not for the devastation that hyperinflation wrought upon the people. The country’s central bank could not even afford the paper on which to print its worthless trillion-dollar notes. The Bank of England worries if inflation in the UK goes over 2% a year in Zimbabwe it hit 79.6 billion per cent. When the Zimbabwean dollar first came into existence in 1980 it had a similar value to the US dollar, writes Patrick Collinson. The disappearing currencyĪ Zimbabwean lady with a basketful of cash Photograph: Tsvangirayi Mukwazhi/AP In an extraordinary irony, the 100 trillion dollar note – a symbol of financial mismanagement on a colossal scale – has turned into one of the best-performing asset classes of recent years. In percentage terms, it is – close to 1,500%, compared with the miserable 5% rise in the FTSE 100 over the same period. Most 100 trillion dollar notes fetch close to £20-£25 on eBay, but set against the £1.50 paid by Wolstencroft in 2011 it is a striking return.
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According to Vishal, it’s quite a step up from his previous venture selling old toys at a local market stall. Vishal is responsible for the listing, photographs, posting, packing and advertising, while father John supplies the goods. He talked his father into a joint venture. Vishal Wolstencroft, John’s 12-year-old son, noticed late last year that these same 100 trillion dollar notes were now changing hands on eBay for as much as £40 each. He would then sell them on for several times the price. Frank Templeton, a retired Wall Street equities trader, bought “quintillions of Zimbabwe dollars” (that’s thousands of trillions) for between $1 and $2 each, via a broker from the Zimbabwe central bank.
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The Wall Street Journal reported in 2011 that David Laties, owner of the Educational Coin Company in New York, had speculated about $150,000 (£104,000) importing the notes from Zimbabwe, sensing they would become “the best notes ever”. Wolstencroft wasn’t alone in seeing the potential of trillion dollar notes. “Over the long term, cash loses its value.” “One of the independent financial advisers used to give the notes out to prospective clients to show why they should invest away from cash in a diverse range of assets, such as real estate, gold, stocks and shares,” he says. When he returned to Britain he gave some to a financial company he works with. He gave some out to members of the club, as promised, and kept the rest. The price had already risen since his first purchase they were £1.50 each. Wolstencroft went away and bought several hundred more notes.
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John (left) and Vishal Wolstencroft sell trillion dollar notes from the defunct Zimbabwean currency to collectors I realised then these notes were going to become a collector’s item.” I tried to explain they were just a gift, but they just upped their offer. “People started offering me money for them. “I didn’t have enough notes to go round,” he says. He brought a handful of the Zimbabwean notes along to his first meeting to give out as a way of saying thank you for letting him join the club, but there were more people there than he was expecting. At the time, the great central banking experiment of quantitative easing and a 0% interest rate policy was making a lot of people nervous. In 2010-11, Wolstencroft was living in New Zealand where he joined an investment club, made up mostly of locals and US expats. “I always found they were a good conversation starter,” he says. John Wolstencroft, a private investor, bought a batch of them to give away. However, it’s thought that only a few million of them were ever printed. You needed a bale of notes just to buy a few household essentials. At one stage a hundred trillion dollar note would not even cover a bus fare.