Hyperinflation - $250,000,000 for Three Loaves of Bread - DFWstangs Forums
 
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post #1 of 4 (permalink) Old 05-08-2008, 07:46 PM Thread Starter
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Hyperinflation - $250,000,000 for Three Loaves of Bread

$1 (USD) = $30,000.9 (ZWD)

I'm not an economics minded guy. Someone explain the downfall that leads to this.


Quote:
Zimbabwe to introduce new banknotes to fight prices

Harare, Zimbabwe
06 May 2008 09:13

Zimbabwe's central bank said on Monday it will introduce new higher-value banknotes in its latest attempt to ease the effects of hyperinflation.

The Z$100-million and Z$250-million bills will go into effect from Tuesday.

"The move is meant to minimise inconveniences to the banking public and the corporate sector," central bank Governor Gideon Gono said in a statement.

Previously, the country's highest value note was a Z$50-million bill, introduced in March. The new highest denomination note is worth about three loaves of bread.

Zimbabwe, which has the highest inflation rate in the world above 165 000%, has been beset by long queues at banks as consumers seek banknotes to stock up basic goods, whose prices frequently skyrocket.

Zimbabwe's central bank last week relaxed tough rules restricting foreign-currency trade, introducing a "willing buyer-willing seller" policy that took effect on Monday.

The Zimbabwe dollar, which had been officially pegged at 30 000 to the United States dollar before the rules were changed, traded at an average Z$165-million to the greenback. -- Reuters
http://www.mg.co.za/articlepage.aspx...ticleid=338498


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post #2 of 4 (permalink) Old 05-08-2008, 08:01 PM
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Quote:
Originally Posted by Strychnine
$1 (USD) = $30,000.9 (ZWD)

I'm not an economics minded guy. Someone explain the downfall that leads to this.



http://www.mg.co.za/articlepage.aspx...ticleid=338498
Printing too much money will do that with a quickness. And that is probably what they did. Italy found out the hard way about this as did mexico (the "new peso"). We were in italy back in the late 80s and you'd look at something in a store and it would be like 300,000 lira. Then you'd do the conversion and it was like US $9
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post #3 of 4 (permalink) Old 05-08-2008, 08:22 PM
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Quote:
Originally Posted by mikeb
Printing too much money will do that with a quickness. And that is probably what they did. Italy found out the hard way about this as did mexico (the "new peso"). We were in italy back in the late 80s and you'd look at something in a store and it would be like 300,000 lira. Then you'd do the conversion and it was like US $9
The root of the problem is not monetary.

Zimbabwe is a perfect example of what happens when you punish the productive members of society and incorporate income redistribution. With no incentive for entrepreneurs to gain from their hard work, nothing gets done, the economy imploded.

Last edited by TexasDevilDog; 05-10-2008 at 08:29 PM.
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post #4 of 4 (permalink) Old 05-10-2008, 12:54 AM
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