Zimbabwe currency crashes, inflation at 9,000 percent

[Cowperson]

An ongoing update of how not to run a country if you're a dictator . . . . actually, this will probably show up in economic textbooks at some point . . . . along with Iran and Venezuala eventually.

Zimbabwe has the world's highest rate of inflation, estimated officially at around 4,500 percent but calculated by independent finance houses at closer to 9,000 percent.

A hardware store in northern Harare closed its doors Monday through Tuesday to re-price all its goods. Supermarkets and other shops are planning to shorten opening hours to make price changes, enabling them to buy replacement stock at higher prices.

A journalist for Zimbabwe's official Herald newspaper reported that she had returned home from a week in South Africa to discover that during her absence the price of beef had increased 2.5 times, a bottle of cooking oil had doubled and bus fares had gone up between three and fivefold.

http://edition.cnn.com/2007/WORLD/af....ap/index.html

Cowperson

[troutman]

Apropos of nothing, a song that mentions Zimbabwe (Master Blaster by Stevie Wonder):

http://www.mp3lyrics.org/s/stevie-wo...aster-blaster/

They want us to join their fighting
But our answer today
Is to let all our worries
Like the breeze through our fingers slip away.
Peace has come to Zimbabwe
Third world's right on the one
Now's the time for celebration
'cause we've only just begun.

Didn't know you would be jammin'
Until the break of dawn.

[worth]

That's what happens when you print money. The fiat system of currency is seriously flawed. This could very well happen in the US and Canada one day.

[Canada 02]

I was in Zimbabwe a few years ago. I kept a ZWD$100000 Zimbabwean banknote as a keepsake. It was virtually worthless back then; perhaps enough money to buy a postcard. It is literally worthless today, as their banknotes have an expiration date

[icarus]

Yep, not only do they have an expiration date but they are reprinted over old bills. I had (maybe I still have it?) a $100,000 bill that was printed on top of an old $50 bill.

My friends from Zim say that if you go out clubbing for a night you need a backpack full of cash. Buying a car or something, and you need a dumptruck (I'm not sure they really do electronic transfer of funds very well there).

[JimmytheT]

Originally Posted by worth

That's what happens when you print money. The fiat system of currency is seriously flawed. This could very well happen in the US and Canada one day.

THis happens if you print extra money to pay down your debts. In order for the fiat system to fail like this it requires complete mismanagement of a nation's currency.

Unless one of our ruling parties or Bank of Canada decides to go on a money printing extravaganza, we should be safe from this kind of inflation.

[worth]

Well look at what is happening in the US right now. The amount of debt there is huge.

Also look at the way currency has declined in value over the past half decade. A $30,000 house 50 years ago costs $500,000 now.

It would take a big event for something like this to happen here, but it's entirley possible. There is way too much money floating out there as it is now.

[blankall]

Originally Posted by worth

Well look at what is happening in the US right now. The amount of debt there is huge.

Also look at the way currency has declined in value over the past half decade. A $30,000 house 50 years ago costs $500,000 now.

It would take a big event for something like this to happen here, but it's entirley possible. There is way too much money floating out there as it is now.

there was massive inflation in the 70s, but we've learned to deal with it a lot better now.

Also housing price increases is a bad example. there are a lot more people living in certain areas so demand is higher and the house actually is worth more.