Yes, there really is a one hundred trillion dollar Zimbabwe bank note (ZWD). When the Zimbabwean government allowed it’s citizens to exchange ZWD for the USD, one of these fetched about $0.40. No, I am not trolling.
I’ve been tempted to buy one myself, the going rate where I’m at currently, the Kingdom of Bahrain, is about 20 USD. I want it strictly as a momento for why bitcoin is such a revolutionary invention…but it’s hard to justify trading my piece of paper for a more worthless piece of paper (that could fetch me 0.0025 BTC after all). There is quickly coming a day where such manipulation of the monetary medium will no longer feasible by the ruling governments.
If you follow crypto news, or just world news in general, you may be aware that Zimbabwe recently banned the use of, sale, and transactions in and for cryptocurrency across the nation. This is for two, very specific reasons.
- To prevent the flow of what little capital remains in the hands of Zimbabwean’s into a borderless, sound money.
- To allow for continued forced taxation on the wealth of the Zimbabwean people.
It is a common practice for governments to inflate the supply of their federally mandated legal fiat tender to meet debt obligations, finance wars, or fund phony space programs. The unfortunate reality is that such a mechanism of control on the financial system removes the burden of wasteful spending off of the backs of big government and places it squarely on the backs of the tax payer, the working man, and the prudent saver. As such, fiat money, is not a hard or sound money, and only functions in a market due to its demanded acceptance.
As the supply of the currencies increase, the relative value of each dollar earned goes down, thus robbing the wealth from those who have denied themselves the gratification of spending money in the present to save for the future. This not only is a hidden tax on the working and saving man, but a robbery on their future families and a destruction of the very livelihoods that make economies possible. But how can we expect, wasteful, bureaucratic machines to resist the temptation of robbing wealth from their citizens, much like the mosquito requires the blood of its host, the modern western government has devolved into a nameless, faceless, emotionless corporate entity, marching in cadence to the endless pounding of progressivism and collective ideology. The only way to circumvent such a machine is by ingenuity that circumvents or short circuits its lifeblood.
Acts of hyperinflation, like this, are not unique to Zimbabwe, but this is one of the most recent and violent examples of such an occurrence, and whether governments recognize, or not, that they are on the edge of a new financial revolution, the dominoes have already begun to fall. Bitcoin cannot be stopped, it cannot be uninvented, and markets will find a way for those who wish to find a sound, hard store of value for their wealth. Markets are historically very good at providing a will and a way where the demand is strong enough.
Much like an infectious virus, bitcoin will creep its way, at first unnoticed, into the nations of the world. It will latch onto its host so strongly, governments will only be able to fight its symptoms, and for how long, as their source of parasitic lifeblood is slowly sapped of its vital nutrients.
Watch closely to what happens here, this is history in the making. We have seen how quickly demand for bitcoin, as a store of value, can go up in nations experiencing rapid inflation or political instability. Now let’s see how effectively it can be fought.