15 ms·
Old bills in Yemen are worth 10% more than new ones
- ubac 6y ago"The rebels were not happy with the new notes. It's easy to guess why. Fresh money could be used to pay government fighters, not rebel fighters. This "blood money" would then cheekily flow north via trade. Since anyone who holds a banknote is by definition funding the government that issues it with a no-interest loan, the rebel north was financing its own enemies. (The technical term for this sort of financing is seigniorage)."
- adtac 6y agoIs it really a no-interest loan? Or is it a negative interest loan? The value of the bank notes the government gave you, presumably by printing it, is less than it was than a few moments ago by the sheer presence of more of it. And it's probably safe to assume that they'll print even more, furthering decreasing your payment's value.
- lopmotr 6y agoIf you measure interest in the currency you're lending, like everyone else does, then it's exactly 0% interest. Interest rates advertised by banks aren't adjusted for inflation either.
- lonelappde 6y agoThe country had a civil war and the money printing system was split into two. The two enemies don't trust each other's fiat money.
- deleted 6y ago[deleted]
- ronyfadel 6y agoYou’re forgetting what was mentioned in the article: one of the 2 enemies can’t/isn’t printing money at the moment, and is sitting on a deflationary currency.
- riffic 6y agoWhy doesn't blogspot automatically redirect http URLs into https ones?
- bakztfutur3 6y agoThis is the most HN comment ever.
- cwmma 6y agohonestly the more HN comment is somebody complaining that it does redirect http to https because <long rant about certificate issuers> and then somebody brings up lets encrypt and then it degrades into a big argument until eventually somebody brings up SWJs at which point that person lost the argument.
- jhhh 6y agoMaybe the second most HN comment is running argument simulations? This one is even complete with a base case (SJWs) that is self-ending because you yourself brought it up. Saved us the trouble.
- perl4ever 6y agoNo, they said SWJ, the journal dedicated to intrastate conflicts.[1] Not to be confused with the WSJ. [1]https://smallwarsjournal.com/ https://smallwarsjournal.com/
- beervirus 6y agoI'm mostly just happy that the site works fine with Javascript disabled.
- saagarjha 6y agoNo, not this again…
- 6y ago
- DC-3 6y agoThis blog is fantastic. I really enjoyed reading the linked articles within this piece about the Somalian currency.
- cesarb 6y ago> In the west, we take fungibility for granted. [...] The fact that a dollar is worth the same in Los Angeles as it is in New York, or Vancouver as it is in Halifax, is worth celebrating. I've experienced the opposite here in Brazil: someone who had leftover US dollar banknotes from a trip to Disney in the 90s decided to exchange them back to the Brazilian currency. Since they were old banknotes, the bank would only exchange them at a heavy discount (I don't recall how much, but it was at least 10%); if they were new banknotes, there would be no discount. So here we have the opposite of the situation in this article: new US dollar banknotes are worth more than old USD banknotes (this is not an isolated case, a quick web search shows that often old US dollar bank notes aren't even accepted for exchange).
- wolfgang42 6y agoI'm guessing this is because older bills have fewer security features and so are more likely to be counterfeited (ironically, especially so if they're in good condition from having been kept in a drawer for most of that time).
- jakub_g 6y agoI guess it's partly this; partly also the issue is that various USD emissions can vary visually a lot - it's probably also easier for the FX workers to just learn the most recent form and not dozens of them? AFAIK the 2012+ dollars are "travel-safe". Same for EUR. The 2002 emission is entirely different visually than the 2013 one. [1] On my trip to Central Asia last year I had a mix and the old ones were not accepted in the bank. On top of all that, it's generally best to have flawless banknotes. Ones worn out, with marks etc. are either not accepted, or accepted with a discount in some places. [1] https://en.wikipedia.org/wiki/Euro_banknotes https://en.wikipedia.org/wiki/Euro_banknotes
- vorpalhex 6y agoIn the US, that's generally prohibited (though I'm not sure whether it's technically illegal or just discouraged). Are the banks worried about being able to exchange older bills?
- ebg13 6y ago> In the west, we take fungibility for granted. The fact that a dollar is worth the same in Los Angeles as it is in New York, or Vancouver as it is in Halifax, is worth celebrating. Except that this is both blatantly false and also not at all analogous. First, a currency's "worth" is expressible solely in terms of what you can buy with it, and the price in dollars of a McDonalds Quarter Pounder is absolutely not the same in different locations. And second, the Yemeni city isn't the important distinction between the different Yemeni bills; the minting authority is. A comparison between French Euros and Spanish Euros would have been far more reasonable, as they're produced by separate minting authorities but still both Euros.
- mumblemumble 6y agoOne could argue that it's not that the value of a dollar varies by location, but that the value of a quarter pounder varies by location. And I think that might be a more practical perspective, since a variable-value dollar would present an easy arbitrage opportunity, whereas buying quarter pounders in Manhattan and reselling them in Peoria is a scheme that would run afoul of some technical challenges. I think that I like the way that the World Bank measures the value of the two rials better. The US dollar (or any other large stable foreign currency) theoretically represents a fairly stable measuring stick that's going to be a little bit more resilient to regional effects than a commodity good.
- thaumasiotes 6y ago> One could argue that it's not that the value of a dollar varies by location, but that the value of a quarter pounder varies by location. And I think that might be a more practical perspective, since a variable-value dollar would present an easy arbitrage opportunity, whereas buying quarter pounders in Manhattan and reselling them in Peoria is a scheme that would run afoul of some technical challenges. You could make that argument, but it wouldn't be a very good argument, since the value of everything is systematically higher (measured in dollars) in Manhattan than in Peoria. The obvious model is that the value of the dollar is lower in Manhattan. (Also, you seem to have mixed up where you would be buying the hamburgers and where you'd be selling them.)
- pjc50 6y agoFascinating. I believe there was a similar demonetization when the IRA stole a large fraction of banknotes issued by Northern Bank in 2005: https://en.m.wikipedia.org/wiki/Northern_Bank_robbery https://en.m.wikipedia.org/wiki/Northern_Bank_robbery The UK is quite unusual in retaining private note issue for banks in the different union nations.
- vinay427 6y agoThis was common practice on a smaller scale for the IRA (Provisional IRA, etc.) throughout the Troubles from what I understand, though the heist you're referring to is particularly notable due to its magnitude and later timing. It evidently proved to be a relatively easy way to raise money, especially as it was at the loss of their purported enemy.
- snug 6y agoThis is awesome, offtopic would be good to read more about Cubas dual currency system (Pesos vs Convertible Pesos). Why it was started, as well as what merchants will take, for example they would take my USD in place of the same number of CUCs
- gumby 6y agoAn interesting example of the opposite is the Lebanese pound: the central bank somehow managed not only to keep operating but to maintain the strength (stabilize the exchange rate) of the currency through the civil war. I believe the head of the central bank moved into the bank and didn't leave for years.
- ronyfadel 6y agoHere’s the more correct version: Before and during the war, up until the late 80’s, 1 USD was worth 3 Lebanese pounds (LBP). In the late 80’s (war ended in 90-91) the USD reached well over 1000 LBP, and reached 2500 LBP in 1992. In 1997, the LBP was pegged to the dollar at 1 USD = 1507 LBP. Fast forward to 2020, where the banking system has started showing cracks, and there are 3 exchange rates at the moment: - Official rate: 1 USD = 1507 LBP - Banks’ rate: 1 USD = 3000 LBP - Exchanger’s rate: 1 USD = 4200 LBP (changes daily)
- sulZ 6y agoForgive my naivety, but doesn't that mean there's an arbitrage opportunity?
- redis_mlc 6y agoSome currency factoids: 1) North Korea has nearly perfect USD$100 printing plates, and finances imports with them. There have been several news articles written about this. 2) In Indonesia, the USD is a parallel currency that individuals/business owners use as a hedge against instability. Typically they'll have a hardbound book with mint USD$100 bills between alternating pages. By mint I mean no holes, no wear, no ink stamps, post 2000. 3) I met somebody who had saved $15,000.00 in Indonesian Rupiah towards UK accounting school. Sadly, the month before, the Rupiah was devalued by 90% and he was left with only $1,500. See #2. Typically when you exchange USD$2,000.00 there, you get a brown lunch bag full of Rupiah note bundles. You almost need a duffel bag to do a large exchange or withdrawal. 4) The lowest amount, the 100 Rupiah note, worth less than 1 cent, has an orangutan on it. Coincidentally, the strongman Suharto was on the old 50,000 note, worth about $3, the highest amount at the time. Guess which one is called the monkey note? :)
- boomboomsubban 6y ago>North Korea has nearly perfect USD$100 printing plates, and finances imports with them. There have been several news articles written about this I believe there has only been one report of a "superdollar" found since 2008, and there has never been overly strong proof that North Korea were the ones producing them
- gst 6y ago> So by late 2016 we've got two different branches of the central bank, one controlled by the rebels and the other by the internationally-recognized government. This sounds a lot like the Bitcoin vs. Bitcoin Cash hardfork. The pre-fork UTXOs were recognized by both parties, while post-fork UTXOs are only recognized on one side of the fork.
- reidacdc 6y agoThere are fungibility surprises in the west, also. In the UK, one sometimes runs across banknotes issued by banks in Scotland, which generally circulate like those issued by the Bank of England, but have some technical differences. Many years ago, I had a cab driver in London who very adamantly refused to take a Scottish pound note by way of fare payment, and as I later learned, was well within his rights to do so. It's sort of the inverse of the situation described in the article -- Scottish and Bank of England notes are technically not fungible, but are mostly treated as if they are, with a few exceptions, whereas the article describes notes that technically are fungible, but are treated as if they are not.
- sleepychu 6y agoScot here, I mostly don't have problems with this in cities. Wouldn't have expected to find this in London (although generally I get some cash out in England once I'm there). My mum and dad's home town though, whole different ball game. The bank charges extra to businesses to take the notes into their account but will happily exchange them gratis for individuals so none of the shops will take them.
- Tsiklon 6y agoPull out a Stirling note in England from one of the several banks in Northern Ireland and most shopkeepers will look at you like you've come from the moon.
- jeffrallen 6y agoDiffering values for the same currency surprised me in Liberia too: https://blog.nella.org/my-favorite-things-all-at-once/ https://blog.nella.org/my-favorite-things-all-at-once/
- supernova87a 6y agoAnother interesting story is that of the US dollar bills that were overprinted with "HAWAII" during WW2. It was to protect against Japan invading and seizing currency, so it was marked for such an eventuality. https://www.futilitycloset.com/2015/08/21/hawaii-overprint-notes/ https://www.futilitycloset.com/2015/08/21/hawaii-overprint-n... https://en.wikipedia.org/wiki/Hawaii_overprint_note https://en.wikipedia.org/wiki/Hawaii_overprint_note https://gizmodo.com/the-us-issued-special-banknotes-in-case-japan-invaded-h-1736274265 https://gizmodo.com/the-us-issued-special-banknotes-in-case-...
- borumpilot 6y agoAnacdotal: Late 80's (cant pinpoint the exact year) I spend some time on the Sinai Peninsula and the local Bedouin would not accept freshly printed Egyptian Dollars but only the old ones. They figured we had be Israeli who printed our own money and tried to rip them off. We had to exchange (read: pay a 10% fee) the new bills with old bills from taxi drivers.