Monday, July 09, 2007

5,000% Inflation + Price Controls = Total Chaos

Stampedes and panic buying in Zimbabwe lead to near-riot conditions, empty shelves and chronic shortages:

A member of the riot police keeps a close eye on people waiting in a long queue to buy sugar in Harare:
Zimbabwe's government announced a new law Saturday making it an offense to defy steep price cuts ordered in an effort to control runaway inflation and a growing economic crisis. A rush to buy cheaper goods have depleted stores of corn meal, bread, meat and other staples since the government ordered a 50 percent cut in the price of basic goods last week. The falling prices have caused stampedes and near-riots in shops. Some businesses have shut down.

More than 1,300 shop owners and business managers have been arrested in Zimbabwe as part of a crackdown on firms accused of flouting government-imposed price controls, police said Monday.

MP: The main difference between market prices and artificial, government-imposed prices? Market prices actually work. In terms of clearing the market, and preventing shortages or surpluses.

The latest plan to salvage Zimbabwe's economy is to tie its currency to the South African rand, which is what Namibia, Lesotho and Swaziland have already done.

3 Comments:

At 7/09/2007 10:11 AM, Blogger Bruce G Charlton said...

"MP: The main difference between market prices and artificial, government-imposed prices? Market prices actually work. In terms of clearing the market, and preventing shortages or surpluses."

Brilliant nugget!

 
At 7/09/2007 5:43 PM, Blogger Mitch Haase said...

Zimbabwe is "barely" living proof that Mugabe is completely and totally inept. He makes Marion Barry and Kwame Johnson look like Rhodes Scholars.

 
At 7/10/2007 1:09 PM, Blogger juandos said...

Hmmm, murderous soicalist at work...

Venezuelan President Hugo Chavez praised Zimbabwe's embattled President Robert Mugabe as a "freedom fighter," bestowing the visiting African leader with a replica of South American independence hero Simon Bolivar's sword

Then again Chavez has his own Mugabe moments ...

Then again like Zimbabwe its apparent that the Venezuelan economy is starting to tank ...

 

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