Would it be wise or foolish to invest in Zimbabwean currency?

Question

Most people know by know the Zimbabwean currency is in freefall mode under the corrupt regime of Robert Mugabe, however the question I am pondering is considering that $1US will buy over $1000 in Zimbabwe currency, would it be smart to buy up this money in the hope that one day in the future fortunes will change in Zimbabwe and the currency will return to an "normal" value and by buying up the money whilst it is basically has no value, could I expect to win big doing this if I hold onto it and things do change? I know it could get worse of course, but in principle in my thinking correct or would I basically be throwing away money? That's my fear but is there a possibility something could be gained by taking this risk?

Answer 1

I would think you would have no chance of making money and a reasonable chance of losing your entire investment.

First, you quote an outdated exchange rate. According to the article cited below (follow the link for the complete story), as of March 9, the Zim dollar was trading at $9500 / US$1. If you had bought on 1 August 2006, you would already be out 95% of your investment, with no end in sight.

http://allafrica.com/stories/200703090533.html

I would also say that another remonetization of the type that took place on 1 August 2006 is inevitable. If that happens, you would only have a short period to convert your money or lose everything. Remember that in August, the populace only had three weeks to convert their money.

Bottom line: Very risky and almost no chance of an upside.
Good luck.

Added later: The Zim dollar free fall continues. Now $17,500 to the US Dollar as of 16 March 2007. Please see the link below for more (It appears that the Central Bank, which outlawed the black market in currency trading, is now the black market's biggest customer, driving the Zim dollar down even faster).

http://allafrica.com/stories/200703160389.html

Answer 2

I understand your angle, if you had done this in a country like Argentina you would be smiling. Unfortunately Zimbabwe in my opinion doesn't fall into the same category. The whole ruling party is corrupt, and maybe the future one is just as bad. If you go back on the Zimbabwe dollar you will see that it was worth a lot back in 1980/82 and has a bad run ever since. This is not surprising. The British put an incompetent leader in (Mugabe) and ever though the world has poured millions into the country it is still in free fall. Don't think that the good rates of the eighties are what it should go back to, those rates where because the former Rhodesian Government ran the country well and honestly. This situation will never return as these Rhodesians are now scattered around the world because of the situation there.
A beater plan for you is to visit Zimbabwe and buy local goods from there and sell them in a first world country.

Answer 3

I know this question is pretty old but it's safer to invest in the stock market than in Zimbabwe or any country like Zimbabwe invest in yourself or your family go learn some new skills take a family vacation don't worry about investing in a currency that still does not exist anymore.

Answer 4

With all currency if it goes through a huge change(if the value skyrockets) the old currency is considered obsolete and new currency is issued. If you want to buy something for a long term investment start buying some gold or silver rounds, that way in the end you wont be stuck with worthless paper.

Answer 5

I'd pass. I understand your "risk to return" way of thinking, but there's no way I'd recommend investing any of your hard earned money in this.

I would like to recommend a book. The Richest Man in Babylon by George S Clason. Under $10, paperback, short, fun read. Changed my financial life 20 years ago. I've bought over 20 copies for friends over the years. For more info, look at reviews on Amazon.com. Good luck to you!

Answer 6

Would be wise to cash out with what's left of it since they are blindly following the Mummy back to the graveyards with it in planet of apes.

Answer 7

BS