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Old 08-01-2008, 08:57 AM   #1
Bagor
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Default Economists: How does this work?

I spent a bit of time in Zimbabwe in 1996 when the $Zim was approx 18-1 to the $US. Now they're running about with notes like this:



The exchange rate at the moment is about $256bn to one $US. Also the government seems to be adding and taking away zeros at the drop of a hat.

Quote:
At midnight, my bank stripped me of my trillionaire status - the Z$5 trillion sitting in my account became Z$500.
http://news.bbc.co.uk/2/hi/africa/7535782.stm

And most worrying of all:

Quote:
In bars, the price of beer goes up between rounds.
http://news.bbc.co.uk/2/hi/africa/7528974.stm

Is this basically a government trying to ignore inflation (15 million %) by printing money and adding zeros at will?
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