Zimbabwe Provides Real Experiment In Worthless Paper Currencies

Zimbabwe Inflation

Do a Google search on "Zimbabwe inflation" and the first page of 10 results has answers which range from 24,000 percent to 1 million percent. I'm not sure anybody really knows what the correct answer is. I'm not sure it even matters at this point. By the time you figure it out, it will have changed.

This Week's Monopoly Money

With hyperinflation, an ongoing challenge is printing paper money to keep up with the changing "value" of the money.

The most recent 500,000,000 bearer cheque was introduced this week. How much is this worth? Today, it can be converted into about $2 US.

Photographs courtesy of Ebay seller Youre-in-good-hands

Africafiles.org is reporting this week that "The Reserve Bank of Zimbabwe, grappling with record-breaking inflation, has introduced a new Z$500 million bank note barely two weeks after issuing Z$250 million and Z$100 million denominations. The beleagured central bank has also introduced agro cheques, which come into circulation on Tuesday and expire in December. The agro cheques are in Z$5 billion, Z$25 billion and Z$50 billion denominations.....

This is the third set of high denomination notes to be issued this year, the last on May 6 when the Z$250 million and Z$100 were put in circulation. On April 2, the RBZ launched a Z$50 million note, itself following on the introduction of a Z$10 million note in January. The southern African nation, currently gripped by a post-election crisis, has been ravaged by hyperinflation which reached 165,000 percent in February. It decided recently to float its currency to eliminate speculation on the black market. The country's chronic economic crisis has condemned millions to grinding poverty with at least 80 percent of the population living below the poverty threshold amid mass shortages of basic goods in shops."

Last Year's Monopoly Money

I first addressed the Zimbabwe inflation problem in the 07/06/07 posting. At that time, I showed the following bearer cheque:













How much was this 100,000 bearer cheque worth last July? Coincidently, it could be converted into $2 US.

Yes, that's right. Ten months ago, it took a 100,000 bearer cheque to purchase a cup of coffee. Today, it would take a 500,000,000 bearer cheque to purchase that same cup of coffee.