For the second time in two years, Zimbabwe’s central bank is slashing zeros off its largely worthless currency. This time 10 zeros will go, making $10 billion equal to $1.

The central bank’s governor Gideon Gono chopped 10 zeros off the Zimbabwe dollar and reintroduded coins which have been obsolete for years.

The highest denomination of Zimbabwe currency is currently 100 billion.

After the currency announcement, President Robert Mugabe warned in a televised event Wednesday that he will declare a state of emergency if prices continue to rise.

Officially inflation is at 2.2 million percent, but private sector economists estimate it is at least five times higher. Prices double every few days.

The purchase of a small packet of cookies can easily cost 400 billion Zimbabwe dollars. Bread, when it is available, is about 200 billion dollars. A few every day items can cost trillions of dollars, and houses for sale are advertised in quadrillions.

Comparing costs with South African groceries, using a combination of official and black market rates, groceries in Zimbabwe are between three and four times the cost for the same goods in South Africa.

Mr. Mugabe’s warnings about price increases came as South African president Thabo Mbeki arrived in Harare to mediate talks between the Movement for Democratic Change and ZANU-PF.

Mr. Mbeki will meet Mr. Mugabe, whom the opposition Movement for Democratic Change, or MDC, has accused of stealing the election earlier this year. (more…)

By John Mackie, Vancouver Sun

A rare $5 banknote from the long-defunct Bank of Vancouver has sold for a record $28,750.

Marc Verret of C&P Numismatics in Quebec City auctioned the note at the Canadian Numismatic Association convention in Ottawa on July 18. It had belonged to an Alberta collector, who purchased it in an auction in the United States about 15 years ago. Verret declined to give the buyer’s or seller’s names, citing client confidentiality.

The Bank of Vancouver was launched in the midst of a real estate and industrial boom in 1910 by some of B.C.’s most prominent capitalists, including the lieutenant-governor, James Paterson, and future Vancouver mayor William Malkin, of Malkin Bowl fame. But the boom went bust, and the bank went out of business on Dec. 14, 1914.

The bank’s headquarters was in the Flack Block, a beautiful heritage building at Cambie and Hastings that recently underwent a $20-million restoration.

It issued $5, $10, $20, $50 and $100 banknotes, but only a handful remain, and they almost never come up for sale.

“I’ve only ever seen one Bank of Vancouver banknote in 25 years in the business,” said Brian Grant Duff of All Nations Coins and Stamps in Vancouver.

“In the past I’ve only ever been able to find [uncirculated] proof notes where archives had them, and they came to market. I’ve had good success with those, but I’ve never seen a real banknote [for sale].” (more…)

Historic printing press plates used in the process of producing multi-subject 19th century “obsolete” paper money for ten different banks will be offered in a public auction conducted on July 27 and 28, 2008 in Baltimore, Maryland by Stack’s (www.Stacks.com) of New York City and Wolfeboro, New Hampshire. The unique, intricately engraved plates are from the legendary archives of the American Bank Note Company.

The number of subjects per plate range from two to eight, and the denominations range from five cents to $100. They are consigned to the auction by Archival Collectibles of Far Hills, New Jersey, which acquired the huge American Bank Note Company archives in 2005.

“We recently discovered these particular multi-subject, obsolete bank note plates among the thousands of one-of-kind, engravings in the archives. One plate was still in its original wax-sealed wrappers, apparently unseen for 149 years,” said Steve Blum, president of Archival Collectibles.

“It’s exciting to look at these original pieces of numismatic history that were so skillfully handcrafted more than a century ago.”

The plates and the denominations of the notes in the upcoming Stack’s auction are:

The Uncas Bank in Norwich, Connecticut, $3 and $10;

The Commercial Bank of Kentucky in Paducah, Kentucky, $5, $5, $10 and $20; (more…)

An elderly woman walked into the American Saving Bank in Munster, Indiana recently to make a deposit, a $2000  deposit that consisted of two 1934 $1000 Federal Reserve Notes.

Reports said that the woman, who was not identified for security purposes, arrived at the bank Wednesday morning and stepped to a teller window to make a $2,000 deposit. When bank workers saw the two bills, they weren’t sure what to make of them.

Bank teller who handled the deposit, Mary Ann Vlasich, thought to herself, “She’s going to need more bills because there is not nearly enough here for $2,000″, who believed the bills were hundreds.

When she looked closer, Vlasich was shocked to see they were $1,000 bills — a  denomination that no one at the bank had ever seen before, much less handled.

The deposit was accepted and the woman left the bank.

But soon afterward the transaction was brought to the attention of Michael Mellon, American Savings Bank’s president and chief executive officer.

“I’ve seen $500s before, but thousands, especially in this good of a condition, are just really rare. Everyone wanted to take a look at them,” Mellon said.

Realizing that the crisp 1934 bills were worth far more than their $1,000 face value, the bank called the woman and asked her to come down to the bank and pick up the banknotes. As Mellon recounts ….

“We explained it would be to the best interest of everybody if the customer picked up the bills and sold them to get a higher return,” he said. “We are a community bank that really looks out for our customers.”

When the woman came back to the bank she told Mellon the bills came from a relative a long time ago. Asked  what possessed her to bring them into the bank Wednesday she replied ” I have no idea”!

A unique discovery note will be auctioned by Spink’s in its Asian Banknote Sale to take place in Singapore on July 5th.

Sale 8014 Lot 0A: The $1000 “Government of the Straits Settlements” of 17 March 1911 has serial number A/1 000001. It is grey & black with crowned arms top centre flanked by a lion and a unicorn. The $1000 value in located in a black tablet at center of the note. The signatures of currency commissioners Brockman, Michell and David are visable and the notes value is also translated into  four languages, English, Chinese, Malay and Arabic around the edges of the note.

The Straits Settlements were a collection of territories of the British East India Company in Southeast Asia, which were given collective administration in 1826 as a crown colony,They were distinct from the native princely states, some of which later formed the Federated Malay States.

Initially, the Straits Settlements consisted of Penang, sometimes officially named Prince of Wales Island, Singapore with about a score of islets of insignificant size lying in its immediate vicinity, the islands and territory of the Dinding, Province Wellesley, the town and territory of Malacca and the islands of Labuan.

The colony was dissolved in 1946, when Singapore became a separate crown colony (ultimately independent), while Penang and Malacca joined the Malayan Union, which eventually became Malaysia.

The note was discovered by the consignor with an envelope titled SPECIMEN/ON HIS MAJESTY’S SERVICE and listing the serial number of the note in ink. (more…)