Thursday, January 17, 2008

Zimbabwe Introduces New 10 Million Dollar Note

What happens when you have 50,000% inflation? The 200,000 note in Zimbabwe, pictured below, is worth only 3 cents, and you need new 10,000,000 notes.
Johannesburg/Harare - President Robert Mugabe's government, stricken by chronic hyperinflation, announced today it will introduce a 10 million Zimbabwe dollar note (along with 1 million and 5 million notes). Economists said it was the highest denomination of any currency in the world.

The issue of new notes follows nearly three months of banking chaos as cash dried up and queues, sometimes hundreds of meters long, became a permanent feature outside commercial banks.

Zimbabwe is in its 10th year of economic crisis, marked by the world's highest rate of inflation, the fastest shrinking gross domestic product in a country not in a state of war, the most rapidly collapsing currency and unemployment of over 80%.

Economists said the disappearance of cash was a result of inflation estimated at 50,000% - the government has banned publication of official figures - that forces shoppers to pay with brick-sized bundles of near-worthless notes for a few simple groceries.


A year ago, the highest denomination was 10,000 Zimbabwe dollars, then worth about $7, now worth about 1/3 of 1 cent (US). The new 10 million Zimbabwe dollar note is worth $3 (US). During the year there were three separate new issues of notes as inflation continued to soar, including the 200,000 note pictured above, which is worth worth only 6 cents (US).

The Zimbabwe Central Bank remained optimistic about the situation, and a spokesman said "As monetary authorities we once again assure the nation that we are in full control of the currency situation."

4 Comments:

At 1/17/2008 10:26 AM, Anonymous Machiavelli999 said...

Zimbabwe inflation: 50,000%

They are in control of the situation.

US inflation: 4%

OUT OF CONTROL INFLATION!

 
At 1/17/2008 12:14 PM, Anonymous Anonymous said...

And people complain about Bernanke & Greenspan!

We cannot even begin to imagine the extent of human misery that is created by the total economic mismanagement, and systematic political repression of this totalitarian regime.

Thank you for featuring an update on this very tragic situation. Like the recent posting on child prostitution in developing nations, it helps to be aware of these problems to ensure that international aide efforts receive funds to help to ameliorate such depravations and our international organizations such as the UN and World Bank stand up to such regimes rather than appointing such countries to the International Human Rights Commission.

 
At 1/17/2008 7:39 PM, OpenID sethstorm said...

machiavelli999:
Different nations, largely different issues(before you get to the number).

 
At 1/18/2008 1:38 PM, Anonymous fredamerican said...

Oh I think we can begin to imagine it. If only inflation continues throughout the U.S., so the wealth of corporations evaporates.

Remember, the real owners have probably already fled the U. S. dollar and are now enjoying the fruits of other people’s labor in another currency. Swiss Franc/Euro comes to mind.

Maybe a commodity like gold is where they’ve stashed a couple of million. The rich have a lot of choices. Not so much for the assembly line worker who is now unemployed. Oh wait...job retraining. Yeah that's the ticket.

 

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