When money becomes worthless ?

Money cannot buy happiness, goes the adage. If you were living in Zimbabwe in the early 2000s, there were a lot more things that money could not buy. In fact, the currency was so worthless at one point that using it to make crafts or as toilet paper was cheaper than using it to buy goods with it. This was the era of hyperinflation in Zimbabwe. Many countries have suffered from hyperinflation in the past, pushing their citizens to the brink of starvation. What caused the hyperinflation in Zimbabwe?

Excess money can be a bad thing!

Governments decide how much money they can print based on complex calculations. One of the important factors they consider during this process is the Gross Domestic Product (GDP). In simple terms. GDP means the monetary value of all finished goods and services within a country. When a country is producing more. Its GDP goes up and vice versa.

Zimbabwe was under the control of an authoritarian leader called Robert Mugabe between 1980 and 2017. In the early 2000s, the country was spending more than it was earning as revenue Mugabe's money managers came up with the not-so-brilliant idea of printing more currency to overcome the money shortage. This backfired.

How money works

The real wealth of a nation is not the money they print but the goods they produce and the services they offer- aka the GDP. Money is only an indicator of that wealth. So, when a country prints more money and distributes it to people, it drives up purchasing power-or the demand- while the amount of goods produced- or the supply-remains the same. Ergo, the cost of goods goes up, leading to massive price rise.

People in Zimbabwe, therefore, had a lot of money which could not buy them what they wanted. The government responded by injecting more money into the country. The consequence was so drastic that the prices were doubling every 24 hours. The rate of inflation reached an astronomical level- to 89.7 sextillion per cent per month! The government had still not leamt its lesson. It kept issuing higher denominator bank notes.

In July 2008, inflation hit its crescendo when the government issued a one hundred trillion dollar note (Zimbabwean Dollar). Its value. however, was just equal to 0.40 US dollars. In fact, the only time it fetched more was when it was sold as a novelty item on the internet. When inflation hit 230,000,000% in 2009, the country's reserve bank declared the U.S. dollar as its official currency.

Savings vaporised

Hyperinflation had devastating consequences for the people of Zimbabwe. Life became a daily struggle. as prices of essentials such food, medicine, and fuel became higher than the bills being printed. Within weeks and months, the cost of a loaf of bread went from hundreds of Zimbabwean dollars (2$) to millions At one point, it touched Z$550,000,000 in the regular market and Z$10 billion in the black market. With people being unable to afford consumption. businesses started failing. Unemployment soared. The money that people had saved in their bank accounts vaporised due to devaluation and in buying essentials.

The bubble bust

Unable to contain the inflation. Zimbabwe decided to abandon its own currency and began using foreign currencies for everyday transactions, including the US dollar, the South African rand, and the Indian rupee. This, along with government reforms. helped the country stabilise its economy to a large extent. The inflation came down to 0%, but it did not last long.

In 2019, the Central Bank of Zimbabwe abolished the multiple-currency system and replaced it with the new Zimbabwe dollar, restarting the old problem once again. Earlier this year, inflation spiked to 175% before coming down to 77% in August. Zimbabwe's real problems are not just with the currency, but with its low economic output, social indicators, and constant conflict in the region. The African nation's experience is a good example to understand why printing more money is not the answer.

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How much did movie popcorn cost in 1929?

In 1929, a bag of popcorn cost only 5 cents (the equivalent of 62 cents after inflation) and a movie ticket cost 35 cents ($4.32 after inflation). And today, the average cost of a small popcorn is $4.75, and a movie ticket costs $7.20. Of course, modern day movie theaters make most of their money of concession purchases, because Hollywood movie studios take upwards to 70% of the opening weekend box office.

One could argue that the cost of operating and maintaining a movie theater has gone up, with surround sound systems, stadium seating and now digital projection. But others could argue that the addition of revenue from in-theater advertising has made up for those expenses. In theater ads generated $456 million in 2007, an estimated $1 – $2 per moviegoer. Also, digital projection has been proven to increase ticket sales by a rather large percentage, primarily due to 3D films, which also charge a 33% higher admission cost.

Credit : Slash Film

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Which country has highest no of billionaires?

The US tops this list as most of the world’s billionaires hail from the US. 724 Americans are now a part of the three comma club. The total net worth of all the billionaires in the country is $4.4 trillion. Furthermore, Bezos sits on top of this list with a net worth of $177 billion.

While the worldwide billionaire population was down 5.4% in 2018, it grew by almost 4% in the U.S., from 680 to 705 individuals, the report found. China, the country with the second-highest number of billionaires, has 285.

Though total billionaire wealth in the U.S. fell by around 5%, it still exceeded that of the next eight wealthiest countries combined, Wealth X found: The billionaires of China, Germany, Russia, the U.K., Switzerland, Hong Kong, India and Saudi Arabia have a combined total of $2.9 trillion, while U.S. billionaires have over $3 trillion.

“Against a backdrop of heightened market volatility, global trade tensions and a slowdown in economic growth, the combined wealth of the world’s billionaires dropped by 7% to $8.6 trillion,” the report states, adding that American billionaires fared better than others around the world thanks to tax cuts and “robust corporate earnings.”

Credit : CNBC 

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What is the most expensive dog collar in the world?

The final item on the list is the world’s most expensive dog collar, the diamond embedded Amour Amour dog collar. Once known as “the Bugatti of dog collars”, this hyper luxe collar is a 52-carat collar with 1,600 handset diamonds with a 7 carat, color graded, brilliant shaped centerpiece.

The 3.2 million dollar collar is also made of 18-carat white gold and crocodile leather. The collar has amassed acclaim from several media houses, blogs and has featured on a number of documentaries and TV shows.

In case you liked these dog collars and chains, you can check out the respective websites to source these perfect little gifts for your precious pet dogs.

Pet parents are constantly looking for ways to dress their babies and it is obvious that you would want the best of what there is for your dog. There are a large number of brands that design and produce adorable canine accessories that will give your dog the perfect runway look and you can easily visit their websites to order from them.

If you are a proud dog parent, then do create a profile for your dog at Monkoodog and share your friendship with the world. Dogs make for wonderful companions and it is a pleasure to watch them play and frolic around not only in real life but also, on our screens.

Credit : Monkoodog 

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What was the most expensive Barbie ever sold?

The most expensive Barbie doll in history is the Stefani Canturi Barbie, valued at a mind boggling $302,500. This highly prized collectible was manufactured in 2010 with elegant blonde hair and the traditional Barbie features. There are two things that make this Barbie so very special. The first is that her jewelry was designed by Stefano Canturi, naming the doll Stefani Barbie. He designed thee necklace she wears and it’s not cheap costume jewelry. The necklace is made of emerald cut Australian pink diamonds. Each is a carat. The rare stones are encircled with an additional three carats of white diamonds that glitter and sparkle. This Barbie sold for $302,500 at auction, but one of the best things about this special edition is that it was created to raise funds for the Breast Cancer Research Foundation, an extremely worthy cause.

The doll, first unveiled on 4 May 2010, during Australian Fashion week, was designed by world-famous Australian jeweller Stefano Canturi, who has also made jewellery for the likes of Nicole Kidman, Oprah Winfrey and Kylie Minogue. The designer was enlisted by Barbie manufacturer Mattel to help promote the launch of the Barbie Basics range in Australia, which features dolls wearing commonly available clothing.

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On average, how much money is spent on pets during the holiday season each year?

Surveyed dog owners in the United States stated that they spent, on average, 442 U.S. dollars on pet food per year in 2020. In comparison, cat-owning respondents claimed to spend an average of 329 U.S. dollars on pet food on an annual basis.

In 2019/20, dogs and cats were the most popular American household pets. There were approximately 63.4 million dog-owning households and 42.7 million cat-owning households in the United States. Other pets living in U.S. households included freshwater fish, saltwater fish, birds, reptiles, and horses. Due to the onset of the coronavirus pandemic in 2020 and the increased time spent at home, many Americans reported acquiring new pets. In a recent survey carried out in December 2020, 10 percent of respondents in the United States reported acquiring a new pet as a result of the coronavirus pandemic.

As Americans increasingly acquired more and more pets over the years, pet industry expenditure in the United States increased at an impressive rate, growing by over 500 percent between 1994 and 2020. Pet food and treats captured the biggest share of pet industry sales, followed by veterinary services and related products. In terms of pet food, the dry dog food segment generated the highest amount of sales, with around 5.3 billion U.S. dollars generated in 2020.

Credit : Statista 

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How did money first start?

MONEY

Before money existed, people traded by bartering, or swapping, different goods. The problem with bartering was that each trader had to want what the other trader was selling. Money was invented as a medium of exchange – something with a recognized value that could be used to buy other goods. Money is usually made of rare materials, such as precious metals or colourful feathers. The first written records of money date back to Mesopotamia (now in southern Iraq) where weighed silver was used about 4,500 years ago.

EGYPTI?? HOARD

In Ancient Egypt, payments were made with various metals and their value was based on weight not shape. This resulted in a wide array of bars, rings, and pieces of gold, silver, and copper.

BURMESE WEIGHTS

During the 18th century, silver weights called “flower silvers” were used as money in Burma (now Myanmar). Liquid silver was poured into a mould, and a floral pattern added.

TRADER’S MANUAL

Coins were regularly shipped overseas in the 16th century. To identify the different coins and their value, Dutch merchants used handbooks detailing foreign currency.

FEATHER MONEY

The Pacific Islanders of Santa Cruz used long coils made of feathers to buy canoes. The brightest and boldest feathers had the highest value.

CHINESE COINS

In 500 BCE, bronze coins in China were made to resemble tools or the cowrie shells of an earlier currency. The shapes were so awkward they were replaced by circular coins with square holes.

BANK NOTE

Paper money has its origins in 10th-century China. Handwritten receipts provided by merchants gained such importance that the government started printing paper receipts for specific sums.

WAMPUM

Native Americans created belts, known as wampum, from white and purple clam shells. These belts represented money and were used to seal deals.

STONE MONEY

Heavy currency was used by the islanders of Yap in the Pacific Ocean. The huge stone discs they used to pay for items were often too weighty to lift, some measuring 4 m (13 ft) across.

CHEQUE

An alternative to cash is a cheque - a form that details how much money should be transferred from one bank account to another. In medieval times, the Knights Templar issued cheques to pilgrims so they could travel across Europe without carrying money.

CREDIT CARDS

First used in 1920s America to buy petrol, many people now rely on plastic credit cards. Issued by banks and businesses, cards are a convenient alternative to cash.

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How is foreign exchange rate determined?



When you visit the U.S. and go shopping, you need dollars to buy things. You can acquire dollars by exchanging your rupees for them. There is a rate at which you can buy the American currency with Indian rupees – for example, you need to give around 71 rupees to buy one dollar.



The exchange rate reflects a country’s economic conditions. It may be controlled by the government for a period of time or be flexible, determined by the market forces of demand and supply. India’s exchange rate was controlled until 1991 after which the government opted for a flexible exchange rate system.



The flexible or floating exchange rate is determined by various factors like inflation, political stability, export-import trade, interest rates etc. These factors determine the demand for a particular currency and its availability around the world. When the demand for a currency rises and supply does not rise correspondingly, then each unit of that currency becomes costlier to buy.



Some governments prefer a controlled exchange rate to create stability in the value of their currencies. In this system, the rate does not fluctuate daily – it may be reset on particular dates known as revaluation dates.



 



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What is the history of the Pound?



A lot of people think that the British pound is the oldest living currency in the world. There is enough proof they say. The Britishers took their currency across the world when they went looking for new places to trade in and colonise. Strangely, the pound originated in continental Europe. The word “pound” derives from the Latin word Libra for weight or balance. An ancient Roman unit of measure, Libra Pondo together stands for “a pound weight.” The word “Libra” no longer stands for the “pound”, but it has left its indelible mark in the symbol for the pound. You have the  (pound) symbol, an ornate L, and the abbreviation for the unit of mass, lb.



Along with the Roman name, the Anglo-Saxons borrowed the sign, an ornate letter ‘L’. The crossbar came along later, indicating that it is an abbreviation, and a cheque in London’s Bank of England Museum shows that the pound sign had assumed its current form by 1661, even if it took a little longer for it to become universally adopted.



What about the word “sterling” for the pound? The coin was called the joachimsthaler, which was then shortened to thaler, the word then proceeded to spread around the world. Use of the word “sterling” came about after the Norman Conquest, and it originally referred to pennies not pounds. It perhaps came from esterlin, a Norman word for little star, or lesterling, an Arab word for money.



The value



The value of the pound originally was equated to the price of a pound of silver. A pound was divided into 20 shillings and 240 silver pennies. The Anglo-Saxon King Offa is credited with introducing the system of money to central and southern England in the latter half of the 8th Century. He minted the earliest English silver pennies that had his name embossed on them. These 240 pennies varied in weight together. So pounds and shillings were used as units for accounting.



The first pound coin appeared in 1489, under Henry VII. It was called a sovereign. The shilling was first minted in 1540. Banknotes began to circulate in England soon after the establishment of the Bank of England in 1694. They were initially hand-written. Gold coins were minted in 1560, and by 1672 some were made of copper.



The system of dividing the pound into shillings and pence was complex. So the government decimalized it in 1971.



Pound’s value through the ages



One pound could buy 15 head of cattle in the year 980 during the reign of King Aethelraed the Unready. From the 15th century to the year 2000, the pound’s value declined. Its purchasing power fell four-hundred-fold. In 1999, the House of Commons library concluded that between 1750 and 1998, prices had risen by about 118 times. In other words, you could buy more with a penny (decimal) in 1750 than what you could buy with a pound in 1998. The value of the pound came down after 1945.



In modern times, many attempts have been made to manage the pound, including the Gold Standard, the Bretton Woods system and the European Exchange Rate Mechanism. Now the value is determined by supply and demand.



The quality of the coins



King Henry I punished currency officials who did not make good-looking coins. Half minters in England got punishment for producing sub-standard or counterfeit coins in 1124. Henry II improved the quality of coins and in 1282, under Edward I, testing the purity of coinage was formalized in the “Trial of the Pyx”, an annual ceremony which contributes to this day.



The coins’ silver content had been reduced to 92.5% to improve durability. “Sterling silver” tells you how pure the silver is in the coin. Henry VIII drastically reduced the silver content of coins minted in his reign in what became known as the Great Debasement. But Elizabeth I restored its value in 1560. It remained so till the 19th Century.



For centuries, thieves clipped off the edges of the silver coins to make money. “Penny pinchers” really lived! They would pass off the rest of the coins for its original value. In the 1660s, minting of coins was mechanized, and features like edge lettering were introduced to stop the clipping. Today “penny pinching” is an idiom referring to those who cut down essential expenses to save money.



The pound has continued as independent currency, though Europe adopted a single currency, the euro.



 



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What is the controversy over electoral bonds all about?



As per the HuffPost India articles, the government ignored the objections raised by the RBI and the EC. Only when the EC’s reservations became public knowledge due to an affidavit it field in the Supreme Court in March 2019 did finance minister raised by the EC even before the scheme was passed in the Lok Sabha.



(In 2017, the then RBI Governor wrote to the then Finance Minister that “allowing any entity other than the central bank to issue bearer bonds, which are currency-like instruments, is fraught with considerable risk and unprecedented even with conditions applicable to electoral bonds.” The RBI wanted to be the organisation issuing the bonds. In addition, it wanted the bonds to be digital rather than physical.



The EC wanted that electoral bonds would allow illegal foreign funds to be routed to political parties. Objections by the two independent, constitutional institutions that were consulted on this matter were overruled and the scheme was passed in the Lok Sabha in 2017.)



According to the HuffPost article, the Prime Minister’s Office asked for the rules governing electoral bonds to be bent before the five state Assembly elections in 2018. Electoral bonds were issued outside the stipulated 10-day window that year.



The report states that the PMO forced the banks to accept expired electoral bonds during the special window kept open prior to the elections.



Other sticking points:



Bonds are traceable



While the electoral bonds do not have the name of the donor or the receiving political party, the bond issuing authority, the State Bank of India, says all KYC norms applicable to general bonds will be applicable too electoral bonds too. Besides, it can ask for additional information if needed. The rules allow the information to be given over to investigation agencies or courts if necessary. In turn, the government can easily discover who is buying and donating them. This means there is a possibility of the donor’s anonymity being compromised.



The news website Quint reported that the bonds, the physical papers, carried a secret alphanumeric code visible under ultraviolet light. The Huffing ton Post reports say the State Bank does indeed track who bought the bonds and which party redeems them.



Only encourages black money



Anonymity conferred on the donors would make electoral bonds a convenient channel for black money, say experts. Though the SBI knows the details of the bank accounts from which the electoral bonds are purchased, it is not responsible for looking into the sources of funds of the donor.



Corporate funding



The earlier 7.5% ceiling on political donation by companies has been removed (by amending the Companies Bill 2013). This allows for unlimited donations. Big companies can influence the parties with their huge funding.



 



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What is the supposed aim of the scheme electoral bonds?



To curb black money: The government claims that electoral bonds are aimed at checking the use of black money for funding parties. Most of the political funding is done in cash often from anonymous sources. But with electoral bonds, as the donations are made through a bank, the money becomes accountable.



To protect the identity of donors: The government claims that electoral bonds allow anonymity, thereby donors from political victimization. This is also important because a central issue in political funding is the question of whether a winning candidate or party will work for the public or for those who have funded them.



 



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Why is political party funding?



Political party funding is the means which a party raises money for its functioning and campaigns. Party members, individual supporters, organisations which support a party or its ideologies or which could benefit from the party’s victory, contribute to this funding. Political parties can also receive foreign funds.



Parties need money to reach voters, to advertise in print, electronic and social media, to pay party workers and to organise election rallies. (in the 2019 general election, a staggering Rs 55,000-60,000 crore was spent by the political parties on election-related activities, according to a study by the Centre for Media Studies (CMS), a not-for-profit multi-disciplinary development research think-tank. The Bharatiya Janata Party spent about 45% of this total amount!).



 



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How does Electoral bonds work?



Donors can purchase the bonds from the State Bank of India (SBI) by making payments digitally or through cheque. The SBI is the only bank authorised to issue the bond. An electoral bond can be purchased by any donor with a KTYC-complaint bank account. (KYC: Know Your Customer. It means that the name, address and contact details of the customer are available with the bank.)



The donors are then free to gift/donate the bond to a registered political party.



The political party has to encash the bond only through an account with the authorised bank, which is the SBI. Electoral bonds are essentially like bearer cheques. The issuing bank will remain the custodian of the donar’s funds until the political party redeems the bond.



Political parties which secured at least 1% of the votes in the recent parliamentary or assembly polls are eligible to encash these bonds.



The bonds can be purchased for any value in multiples of Rs. 1000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh and Rs. 1 crore.



 



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What are electoral bonds?



A recent investigation by news website Huffington Post India has revealed that the BJP-led Central government introduced the Electoral Bond Scheme, ignoring the objection of the Reserve Bank of India (RBI) and the Election Commission (EC). It passed a Finance Bill in 2017 and the scheme was launched in January 2018. An electoral bond is an instrument which can be bought by any member of the public or corporate to make donations to political parties anonymously.



Since its introduction, the scheme has come under sharp criticism. Various stakeholders have expressed their objection to the scheme, saying the system has several loopholes. It is alleged that the donation made through electoral bonds are, in effect, not as transparent as it is claimed to be. With the recent articles by HuffPost India, written based on documents furnished by a Right to Information activist, the controversy over electoral bonds are resurfaced.



Electoral bonds are a type of bearer bond instrument in the nature of promissory notes issued by banks through which as Indian citizen or a company established in the country can fund political parties anonymously.



A bearer bond instrument is a type of fixed-income security in which no ownership information is recorded and the security form to the purchaser. Whoever is in possession of the bond is entitled to the coupon payments.



A promissory note is a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.



When they can be bought?



Electoral bonds are available for purchase for 10 days each in the months of January, April, July and October. An additional period of 30 days would be specified by the Centre in the year of general elections.



 



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