This Day in History: Zimbabwe officially abandoned the Zimbabwean dollar as its official currency. The reason for this is hyperinflation. As the currency loses value the authorities respond by issuing more of it, thereby ensuring that it will lose even more value which then leads to the printing of even more money and so on. A year before this, a newspaper in Zimbabwe went from $200,000 to $25 billion in the space of one month. A beer was $150 billion. "The chaos spreads through everything. ATMs and computers cannot handle all the additional zeros. Suitcases full of paper are needed to buy things – what few things are available. The inflation is so rapid that wages cannot keep pace. A worker might find that his bus fare today is more than his weekly wage. Life becomes intolerable for almost everyone."~Bill Trench
In place of their own dollar Zimbabwe uses other currencies, such as the American dollar. However, the US is also doing what Zimbabwe did. Endless stimulus programs means more money printing. This then leads to inflation,
Current inflation levels:
Average Food Index 25%
Wheat 28%
Steel 145%
Lumber 188%
Oil 76%
Soybeans 71%
Corn 67%
Copper 48%
Silver 40%
Cotton 35%
40% of all dollars in circulation were "printed" in the last 12 months.
All paper money is doomed to fail. However, we live in a strange time right now when all dominant economies are engaged in inflating their money supply (Quantitative Easing).
See also The History & Mystery of Money & Economics-250 Books on DVDrom
For a list of all of my disks and ebooks (PDF and Amazon) click here
For a list of all of my disks and ebooks (PDF and Amazon) click here
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