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Thread: A Simple Question.

  1. #1 A Simple Question. 
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    hey guyz...i have a question which confused me for decades...i wish you guyz can give me good answer for this question..why some countries are issueing big notes like 50000 for example indonesia...i just dont get it ...why dont they issue a smaller note instead...


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  3. #2  
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    called need...

    in the US we had a 10k bill for a long time and dropped for lack of use.
    the most often used is now the 20.00 bill.

    most country's value a unit to buy a dollar or a Euro. in Japan, for instance you need several hundred yen to buy one dollar. to buy a 100.00 it would take the proverbial wheel barrel. a TV on sale at their local Best Buy would take a truck of yen, if in single units and so on.....

    inflation or deflation of a national currency over time has created this phenomenon. currently only China has not allowed their unit value to float in the world markets and their money is tied to the US dollar.


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  4. #3  
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    There used to be $100k bills in the US, back before your could move large amounts of money around via computer.

    Think about it...each US bill weighs exactly 1 gram. If you need to move $100 million from one bank to another and all you have are $100 bills, you will have to move a metric ton of money...not very convenient. That's also something to think about the next time you see people in movies walking off with "millions of dollars" in bags.
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  5. #4  
    Universal Mind John Galt's Avatar
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    There are four reasons:

    1) Inflation

    2) Inflation

    3) Inflation

    4) Inflation
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  6. #5  
    Forum Bachelors Degree charles brough's Avatar
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    As Orophite says, "inflation." I lived in Indonesia for three years and can verify the inflation there first hand. Smaller bills would be worthless. It takes a several thousand bill to equal a dollar. I carried a briefcase to the bank when cashing my paycheck and had to stuffed it with cash each time. No one used coins; they didn't even make them.

    It is going to be like that here in less than a decade because both the rich and the poor really do not care about the nation as a whole. The middle and lower classes are desperate and resentful of what the society is doing to them and the rich prefer to use it to better themselves. We are so divided and feel so little unity that we are all forced to think only of ourselves.

    What we and civilization itself needs is a whole new system to divert us from the dismal, downhill course we are taking.

    charles, http://humanpurpose.simplenet.com
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  7. #6  
    Forum Professor Pendragon's Avatar
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    Yea it's all about inflation. Most currencies probably started at normal values (like 1 rupee or rubel for 1 bread), but are then driven to sometimes enormous levels by inflation. Ofcourse the central bank of a country can always take off a couple digits (happens all the time), but it's a lot of hassle and doesn't really change anything. So the number of digits you find on a banknote doesn't really say anything. A country with huge inflation can have banknotes of 1 unit, but then people only earn a couple units of currency every week.

    Economists are only interested in the real value of money: what can you buy with it? So if someone says "I used to have 1000 dollars", I wouldn't have a clue how rich he was because I don't know how much inflation there has been since that moment (in other words, I don't know how many breads he could buy with that money back then).

    By the way Charles, please always make explicit what you mean by 'here', 'we' and 'us'. You probably exclude about half the forum's members by not making it explicit that you're only talking about the US (if I understand your post correctly).
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  8. #7  
    Forum Bachelors Degree charles brough's Avatar
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    Quote Originally Posted by Pendragon
    By the way Charles, please always make explicit what you mean by 'here', 'we' and 'us'. You probably exclude about half the forum's members by not making it explicit that you're only talking about the US (if I understand your post correctly).
    You are right of course. I hope I can remember to do so, but I do forget. Please do not be offended if I forget again; I will welcome being reminded.

    charles
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  9. #8  
    Forum Professor Pendragon's Avatar
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    Thanks, no problem :wink:
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  10. #9  
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    As Orophite says, "inflation." ...
    The government may drop zeros from the money and derive a new unit. We have done this in Turkey recently. 6 zeros are dropped from our unit.. TL called YTL. Y there is the first character of the "new" in turkish.
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  11. #10 denomination in Poland 
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    Quote Originally Posted by casperl82
    As Orophite says, "inflation." ...
    The government may drop zeros from the money and derive a new unit. We have done this in Turkey recently. 6 zeros are dropped from our unit.. TL called YTL. Y there is the first character of the "new" in turkish.
    We also had denomination in Poland in more less 1992. The new zloty was worth 1/1000 of zloty eversince and the two currencies functioned for some time paralelly.

    Wojtek
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