Zimbabwean Crisis: Z$100 Billion Note Won’t Even Buy You Lunch

Posted by Alex in Money & Finance on July 23, 2008 at 2:37 pm


If you think the American economy is bad, take heart that it’s nowhere near the ultra-super-hyperinflation in Zimbabwe, once one of the richest countries in Africa. The country’s central bank has recently issued a Z$100 billion note (yes, Z$100,000,000,000).

So, what would a Z$100 billion note buy you? About two loaves of bread (it won’t even get you lunch - you’d need at least Z$250 billion for lunch).

So far this year, the country ravaged by hyperinflation has been forced to print 100-million, 250-million and 500-million notes in rapid succession. All of them are now almost worthless.

It has become common now for Zimbabweans to talk of their daily expenses in trillions (one trillion is 12 zeros).

When John Robertson pinned a chart to the wall of office naming numbers up to twice as long, he says he "raised a bit of a laugh" from his colleagues.

But for many officials and accountants, a quadrillion - a million billion - is the number of the day.

Link

Previously on Neatorama: The Zimbabwean Crisis

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COMMENT

17 comments to "Zimbabwean Crisis: Z$100 Billion Note Won’t Even Buy You Lunch"

  1. Sid Morrison
    July 23rd, 2008 at 3:01 pm

    Robert Mugabe Bright Idea #1:
    Confiscate the landholdings of experienced (and productive) white farmers and redistribute it to a larger number of inexperienced black farmers.

    Farm productivity plummets, food becomes scarce, hyper-inflation ensues. People starve.

    Robert Mugabe Bright Idea #2:
    Run for re-election. When your opponent forces a runoff, have thugs beat the hell out of anyone who voted for said opponent in the first election so they don’t make the same “mistake” again.

    Yeah, people of Zimbabwe were really being oppressed by British colonial rule. geez.

  2. DOJ
    July 23rd, 2008 at 3:20 pm

    Would’ve been nice if the article went into the causes and solutions of their inflation

  3. Tom
    July 23rd, 2008 at 3:22 pm

    The hyperinflation and the food shortages aren’t really related, at least no directly. The hyperinflation is a result of runaway spending by the government, along with declining tax revenues. much like here in the US, they continued to spend more than they took in, and they made up the difference by printing more money. Lots of it. The government can buy anything it wants, simply by devaluing their dollar (amounting to a phantom tax). The people caught on to the increased number of dollars in circulation, and prices started going up up up, and everyone lost their purchasing power, except the government.

    Eventually, no-one will even take zimbabwe dollars, and the regime will crumble.

  4. Bob Mugs
    July 23rd, 2008 at 4:15 pm

    DOJ - see Bright Idea #1 in SId’s post

  5. mu
    July 23rd, 2008 at 4:20 pm

    AFAIK, Mugabe handed the confiscated farms over to his cronies rather than just any old “inexperienced black farmers”. This is just run of the mill petty corruption, nothing to do with race or colonial rule really.

  6. RM
    July 23rd, 2008 at 4:23 pm

    Agree with DOJ. I will search more info.

  7. SweetBabyZombie
    July 23rd, 2008 at 5:32 pm

    Can somebody explain why the government can’t easily knock off all the zeros and thus resetting the currency?

  8. JoshuaPettigrew
    July 23rd, 2008 at 5:51 pm

    @SweetBabyZombie

    Some gov’ts have done this in a “revaluation”. They print new bills and say a million of the old currency equals some number of the new.

    However, if you don’t confront the root causes of the inflation (see Sid and Tom’s posts), then all this does is to keep people from having to mess with taking a cart full of cash to the grocery store.

  9. Angstrom
    July 23rd, 2008 at 7:34 pm

    on the subject of “resetting”

    Zimbabweans are only allowed to withdraw $100bn a day from the bank, that’s less than half the cost of a loaf of bread. So regardless of zeros being removed, people cannot buy bread.

    it doesn’t really matter what the number is, whether your pay cheque says $1,000,000,000,000 or $100, but if a loaf of bread costs a weeks wages then the trouble remains.

  10. DOJ
    July 23rd, 2008 at 9:13 pm

    Bob Mugs - Sid’s bright idea #1 may be the cause, but it wasn’t mentioned in the BBC article (which is my point)

  11. Lisa
    July 23rd, 2008 at 9:59 pm

    What would a zillion buy you in Zimbabwe? How much do hookers charge by the hour? It’s sad, really, that inflation continues to make short work of poor countries’ already ailing economies. There should be some form of regulatory body when it comes to inflation. This problem of Zimbabwe is bound to affect the west ultimately; all economies are bound together.

  12. Bunk Strutts
    July 23rd, 2008 at 11:23 pm

    This news is positive. It means that there are more quadrillionaires in Zimbabwe than any other country in the world. Despotic Dictatorship works!

  13. Larfin Jackarse
    July 24th, 2008 at 3:19 am

    Well as the saying goes, there mustn’t be any oil there.

  14. MoonCake
    July 24th, 2008 at 6:47 am

    i’m just wondering how they’ve managed to survive at all.. i mean, if they can’t buy a loaf of bread after working a full day, how are these people still alive? how is zimbabwe not the land of rotting carcasses and disease? or is that the untold story? are we to assume that these people are just sitting around completely overwhelmed by their unpayable bills just waiting for the economy to sweep them off the land and start a-new? what is happening and what is being done?

  15. gl3nk
    July 24th, 2008 at 7:31 am

    @Sid Morrison

    Your 100% correct. Great comment!

  16. konshuss
    July 24th, 2008 at 11:45 am

    excuse me, can i get that in ones?

  17. Evil Pundit
    July 24th, 2008 at 8:17 pm

    Zimbabwe gets some food aid from the west (though Mugabe’s thugs try to stop it reaching people who didn’t vote for him). I suspect those who don’t get aid rely on barter and other means to get food.

    And some starve.


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