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Zimbabwe drops 10 zeros from inflated currency
Because I'm finding this interesting:
Zimbabwe announced on Wednesday that it is knocking 10 zeros off its hyper-inflated currency - a move that turns 10 billion dollars into one. The move comes a week after the issue of a 100 billion-dollar note - still not enough to buy a loaf of bread.
Central Bank Governor Gideon Gono said the new money would be launched with 500-dollar bills. He also said he was reintroducing coins, which have been obsolete for years, and told people to dig out their old ones. Gono made the move because the high rate of inflation was hampering the country's computer systems. Computers, electronic calculators, and automated teller machines at Zimbabwe's banks cannot handle basic transactions in billions and trillions of dollars.
Economist John Robertson said the new bills would also soon be worthless since the rate of inflation continues to skyrocket. What costs $1 at the beginning of the month can cost $20 by month's end, he said.
[Boston Globe]
Zimbabwe announced on Wednesday that it is knocking 10 zeros off its hyper-inflated currency - a move that turns 10 billion dollars into one. The move comes a week after the issue of a 100 billion-dollar note - still not enough to buy a loaf of bread.
Central Bank Governor Gideon Gono said the new money would be launched with 500-dollar bills. He also said he was reintroducing coins, which have been obsolete for years, and told people to dig out their old ones. Gono made the move because the high rate of inflation was hampering the country's computer systems. Computers, electronic calculators, and automated teller machines at Zimbabwe's banks cannot handle basic transactions in billions and trillions of dollars.
Economist John Robertson said the new bills would also soon be worthless since the rate of inflation continues to skyrocket. What costs $1 at the beginning of the month can cost $20 by month's end, he said.
[Boston Globe]
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"That'll be 1e27 dollars." "Here's ten 26's..."
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166,666% a month.
38,461% a week.
5,479% a day.
228% an hour.
Almost 4% a minute.
If it takes you 10 minutes to drink a cup of coffee, and the price was 1 Zimbabwe dollar when you bought it, a second cup costs $1.42 or so. That's at breakfast at 8. By noon it costs $2,700 dollars.
(The real reason that they devalued the currency is because the company that provides their paper for printing has stopped shipments.)
No one there is using cash. It is worthless. I'd venture to say that if inflation passes 1,000%, cash becomes an almost useless trading medium.
(Imagine purchasing a defective product, and trying to return it....)
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I wonder what kind of catastrophe is going to reset everything to a simple situation? Because surely that is what it will take.
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It's interesting to see how people coped when money became useless.