January 17, 2008

The Fifteen Million Dollar Burger

***Welcome to doubleplusundead, feel free to look around or comment...or not, whatever.

Zimbabwe's long had a hyperinflating currency, but this is something else.  Zimbabwe's central bank has just issued a ten million dollar note.  The sad part, it won't even buy you a burger in Harare, Zimbabwe's capital city, you need about $15 million Zimbabwe for that, which is about £3, or just under $6 US, if this handy little widget is right.  Of course, as bad as the inflation is over there, it could be $30 million by the time this gets posted...

You sure can, they're only $15,000,000 Zimbabwe

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.

I may have to see if I can dig up any info on the farmers interviewed at some point as suggested in comments.

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