To give you an idea of how badly this is spinning out of control, just last month, the highest banknote produced was $750,000. 

Unsurprisingly, Zimbabwe's economy is a horrible mess as a result of a combination of hyperinflation and collapse of their economy, caused largely by dictator Robert Mugabe's disastrous land redistributions (basic background on Mugabe's land redistribution here for the uninitiated).

They're now facing shortages of basic food and living needs.  The article has a pic of a guy holding a loaf of bread and the equivalent of what's needed to buy it, and its quite a handful of cash.  I knew Zimbabwe's inflation problem was bad, but I had no idea it was this bad,

Zimbabwe faces the world's highest official inflation of an estimated 25,000 per cent. Independent financial institutions say real inflation is closer to 150,000 per cent.

And it doesn't appear the cycle is going to stop.  Zimbabwe is trying to impose price controls, which they tried to do unsuccessfully in early 2007.  Price controls haven't worked during past efforts to stop hyperinflation, but it appears they're going to keep trying to make it work.  Gideon Gono, Zimbabwe's reserve governor,

Gono said with higher denomination bills businesses might be tempted to again raise prices of scarce goods.

"If this happens the whole objective of solving the cash shortages and to bring convenience to the people will be defeated," he said.

What a disaster.

And just so you can get a feel of how badly things have fallen apart, here's a comment from a Hotair reader who has been to Zimbabwe many times over the years and has experienced what has happened there firsthand.

Another commenter suggests I add a report Dan Rather did where he paints a somewhat rosy picture of Zimbabwe's future under Mugabe, so here you go, as is typical with Dan Rather, he got it way wrong.

1 Damn! I knew I should have never saved those Zibabwe quarters.

2 Heh, the metal used to make them is probably worth more than the currency.

3

Hey Doubleplusundead,

See ya quite a bit at HotAir, but first time to your site. 

I have been travelling to Zim for over 20 years and it is the damndest thing I have ever seen.  I was there 2 years ago when Mugabe was bulldozing the "illegal" housing outside of Harare.  It was terrible seeing family after family holding their meager possessions by the road while the riot police protected the dozer drivers.

Harare used to be a magnificent city.  It was mostly clean and there were alot of great restaurants and pubs.  Now, it's dirty, the roads are in disrepair, there's no power, no food, no water, and worst of all....no beer.

I have several friends that still live there.  It's a terrible struggle for them just to get the day to day items one needs to survive.  Meat is especially a luxury as are fresh vegetables.

It's a real shame.  Bob Mugabe has taken the breadbasket of Africa and completely and utterly destroyed it via his land redistribution scheme.  Once he did that, tobacco production fell nearly 80% and maize production nearly the same amount.  Both crops were the backbone of the economy and accounted for the bulk of hard currency coming in to the country.

You're right about the inflation and currency devaluation.  However, the exchange rate you quote is the black market rate.  Mugabe's forced "official" rate is set at US$1.00 to only Z$250.00 or so.  The exchange only works one-way however as you can only buy Zim dollars, not take Z$250 and trade it for a US dollar.  What this also means is if a company receives US dollars, German Marks, Pounds or any other foreign currency for payment, the funds by law convert to Zim dollars at the "official" rate after 30 days.

I could go on and on, but you get the point.

The saddest thing is other than articles in the Herald Tribune or the Gaurdian in the UK, you don't see much about Zim.  Here in the US, it's rarely mentioned in the news.

Thanks for spreading the word.  Every little bit helps.

Regards,

Bacadog

4 Yeah, I heard a story on Zimbabwe's economic collapse a bit ago, so when this story came up, I jumped on it right away because I found it interesting.

I think I'll link your comment in the post too, because unlike you, I don't have any real connection to Zimbabwe, you've obviously got experience.  BTW, I used to comment under a different handle at HA, I changed it to doubleplusundead to simplify things and reduce confusion.

5 you really should link the dan rather CBS story about how wonderful Zimbabwe was going to be after this was done. Then google a few of the names Dan Rather mentions - some of the farmers who "weren't" going to lose their land. And find out where they are now. I think one is on trial or has been thrown out of the country. Another was killed, I believe.

6 For what it is worth Zimbabwe also has the highest literacy rate in africa, as well as the lowest life expectancy in the world. I am not sure what this has to do with anything but i thought it was an interesting factoid.

7 I was in Botswana last summer for the second time in two years.  They are being inundated with Zims fleeing the country.  "Uncle Bob" is reportedly thinking of taking his retirement in Namibia or another neighboring country.  Wherever he ends up, you can trust that he will have an extensive security detail, as he is one of the most hated men on the continent.

8 I noticed you had retired Bad Candy.  Haven't seen you comment at Ace's lately - are you retiring Sinistar, too?  Probably a good choice name brand-wise, but now what am I going to call you?  :'-(

9 Oh, I comment at Ace's, just not as frequently, and you can call me whatever you like best.  I've been using both names at Ace's.  I did the name change at HA for brand recognition.

10 By the way, you can add wordpress URLs to your comments again, I think.  I think Pixy finally fixed it for good this time around.  

11 Testing...

12 Excellent, it seems to be fixed.  You never know, I think people had started to get tired of fighting the stupid thing, and quit putting in their URLs.

13 you can call me whatever you like best

How about if I call you my bitch?

14 Heh, guess I walked into that one, you can just stick with sinistar or any of the common variations of doubleplusundead.

15 will do.  (It was a joke, btw.  Not sure if that came through without the tone of voice.)

16 Obviously it was a joke!

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