World

Hyper-inflation, a 1000 dollar note buys a loaf of bread

by SOLARLIFE | September 21, 2008 at 02:57 pm

693 views | 1 Recommendation | 4 comments

What happens, when a country just prints money, not covered by productivity.
Happend in Germany 1945, money worthless, new money the Deutsch mark, every
person got 40 DM to start. The Reserve Bank of Zimbabwe has introduced a $1,000 note, $10 trillion in the old value, to end cash shortages in the hyper-inflationary environment.

However, analysts said the new note -- which can only buy a loaf of bread -- will not ease pressure on cash shortages because of the ever-increasing prices.

"It will not make even a small impact. What we need in Zimbabwe is a clear change of policies, start production and then inflation will start easing up," said John Robertson, an economic consultant. "The zeros seem to be coming back no matter how often they slash them."

In August, Zimbabwe slashed ten zeroes on the currency; two years earlier the country slashed three zeros. The zeroes keep bouncing back in the country that has an inflation rate of 11.2 million -- the highest in the world.

Zimbabwe's agro-based economy has been on a free-fall for more than a decade now.

Since 2000, Zimbabwe's currency has been depreciating against major currency. It is trading around $350 Zimbabwean dollars -- $35 trillion in the old value -- against the U.S. dollar.

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bill hicks

at 15:33 on September 21st, 2008

The post office now has an inflation stamp. they did that because they knew what was going to happen.

SOLARLIFE

at 15:42 on September 21st, 2008

thanks for comment bill hicks, you saying "The post office now has an inflation stamp. they did that because they knew what was going to happen.", is this a joke ? Who has made that stamp?

nahummer (not verified)

at 17:38 on September 21st, 2008

Zimbabwe's story for the past 8 years is one of the saddest on the planet. Whether inflation is running at 11 or 40 million percent, the printing presses can't keep up. The power sharing deal signed last week looks to be just more smoke and mirrors performed by Mugabe to stay in power so his wife can take expensive shopping trips while his population starves.

SOLARLIFE

at 02:38 on September 22nd, 2008

nahummer says: "Mugabe to stay in power so his wife can take expensive shopping trips while his population starves"; thanks for Flag "Hyper-inflation, a 1000 dollar note buys a loaf of bread"