When 2.2 mill inflation is 'short'!!!

[Texas Proud]

WOW.... saw this and was amazed... the 'official' inflation is 2.2 million percent.... and they are not telling the truth like some other governments we might know....

I wonder what the people are doing with the old 'singles'


HARARE (AFP) - Zimbabwe, grappling with a record 2.2 million percent inflation, has introduced a new 100-billion-dollar bank note in a bid to tackle rampant cash shortages, the central bank said Saturday.

The new note will go into circulation on Monday, the bank said in a statement cited by state media, joining about half a dozen new high denomination notes already issued this year.

In January, a 10-million-dollar note was issued, then a 50-million-dollar note in April. In May, notes for 100 million and 250 million dollars were issued, swiftly followed by those for five billion, 25 billion and 50 billion.

The southern African nation, currently gripped by a post-election crisis, has been ravaged by hyperinflation which shot up from 165,000 percent in February to 2.2 million in June.

Independent economists however believe the official inflation figure is grossly understated, estimating it could be running between 10 million and 15 million percent.

Zimbabwe's chronic economic crisis has left at least 80 percent of the population living below the poverty threshold and mass shortages of basic goods in shops.

 

[DragoMuseveni]

I've always wondered how people cope in situations like this? I mean, the price of a loaf of bread probably doubles between the time they take it off the shelf and walk to the cashiers... They must get by on barter and growing their own food.

 

[Ed_The_Gypsy]

They turn to crime or leave the country. What else can they do?

 

[cute fuzzy bunny]

No idea what year this was produced but I think its recent. Interesting. Note that the major oil producing countries are all near the top of the list.

 

[CitricAcid]

Q: What happens when you violate hundreds of years of property and contract law?
A: The entire financial backing to a country completely goes to shambles.

In Zimbabwe, Mugabe started something similar to eminent domain and took back much of the farmlands of white land-owners. The motivation was not entirely misguided as these plantations were traditionally owned by white slave-owners and it was part of restitution to the slaves. When the owners left and the land was split up, much of the backing of their international trade (food) and the backing to their weak financial system left the country, or were just inefficient. Then the inflation starts kicking in. They could not raise enough taxes in the country to pay their government employees, so they (here's my favorite part) just printed money to pay their employees. Crazy monetary stories are always fun to read about.

 

[samclem]

It's a sad observation that black Zimbabweans/Rhodesians had more opportunities, longer life expectancy, a higher standard of living, and more individual liberty under appartheid than they do today. Things have gone terribly wrong.

 

[FUEGO]

In one article I read about this, they said the new $100 billion notes were not quite enough to buy a loaf of bread, but you could get 4 oranges with it.

 

[Independent]

You get weird stuff in hyper inflation. It turns out that printing money is a major effort. Western nations, in an attempt to make life difficult for Mugabe, figure they can make progress by simply turning off his supply of paper.

The printing operation drastically slowed. Two-thirds of the 1,000-strong workforce was ordered to go on leave, and two of the three money-printing shifts were canceled.

The result on the streets was an immediate cash crunch.

"If you think this currency shortage is bad, wait two weeks. By then it will be a disaster," said a senior Fidelity staffer, who spoke to The Times on condition of anonymity because he would face dismissal and possible violence for talking to a Western journalist. The paper will run out in two weeks, he said.

Lack of bank note paper threatens Zimbabwe economy - Los Angeles Times