Saturday - July 19, 2008

How close to nothing can you get?

Zimbabwe is to introduce a bank-note worth Z$100bn in response to rampant inflation - but the note will barely cover the cost of two loaves of bread. Some Zimbabweans are already calling for higher denominations in a country where the official annual inflation rate has exceeded 2,200,000%. Independent economists believe the real rate is many times higher, between 10 million and 15 million per cent.

Zimbabwe’s meltdown has left at least 80% of the population in poverty, facing mass shortages of basic goods. The country’s central bank has introduced several new notes already this year in response to the hyperinflation.  In January, a Z$10 million note was issued, followed by a Z$50 million. By June the denominations had reached tens of billions.

The Zimbabwe dollar, which had been officially pegged at 30,000 to the U.S. dollar before exchange rules were relaxed recently, now trades at about 800 million to the greenback.

Yeah, but unofficially it’s at least 1 billion to the dollar. Wait, what time is it again? Ok, 2 billion to the shit, I can’t type fast enough!! 3 billion to the dollar.

Zimbabwe’s new denomination is worth 20 times as much as this one. Z$5 billion might buy you one small bite out of an apple these days. Last month it was worth $2.50.

Zimbabwe was once one of the richest countries in Africa.

QUESTION: At what point will the people simply give up on the concept of money? Zimbabwe is already long past the point where it’s even worth counterfeiting their currency. How much longer until it isn’t even worth carrying? 

Run the numbers. 15 million percent per year, 365 days, 24 hours, 60 minutes ... their purchase power declines at 28.5% PER MINUTE.  Is that possible??  A few months back I figured that a single sheet of one ply toilet tissue was worth more than X million Z bucks. Even the ink on the paper money was more than money’s face value. Now? If most people there live under that $2 a day poverty cap the UN was going on about, and it takes half a trillion Z bucks a day to get by ... then 1 US dollar ought to have the buying power of 250 GZ$ (250 giga-Z-bucks. “Geezeebux")

Zimbabwe started issuing large bank notes in December, starting with denominations of $250,000.

In January, the government issued bills in denominations of $1 million, $5 million, and $10 million—and in May, it issued bills from $25 million and $50 million up to $25 billion and $50 billion.

The new bills are actually bearer checks and have an expiration date of December 31. Zimbabwe has not had formal currency since the introduction of bearer checks as a temporary measure in 2003.

“The RBZ is fighting a losing battle,” economist John Robertson said in Harare. “As long as the inflation remains high, cash shortages will persist. There is need to address the inflation by increasing production so that too goods do not [cost] a lot of money.”

Yeah, true. But the problem with that is that the only thing you folks have is farming, and you killed all the white folks who knew how to farm. 

Posted by Drew458     on 07/19/2008 at 05:14 PM   
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