Wednesday, July 23, 2008
Zimbabwe: Monopoly money is worth more
The Beeb has an article today on the game Zimbabwe and its people are playing with cash in the midst of long-term ultra-hyper inflation. The examples in the story are truly beyond belief.
An example: If you win the Harare Herald Lotto Bonanza, you get 1.2 quadrillion Zimbabwe dollars. That's quadrillion, with 15 zeros. The prize's worth in US dollars? About $4,000. And that was last week. Who knows what it's worth now?
Another example: At a private school in Harare, parents are being asked to pay supplemental fees of Z$2.1 trillion. Yes, trillion. And if you wait until next week, you have to pay Z$3 trillion. Nine hundred billion dollars more to extend for a few days.
How would you feel if you had a few crisp, new Z$500,000,000.00 bills in your wallet, and knew you might be able to buy a newspaper and a sandwich with them? Five hundred million dollars, in a single bill, now practically worthless.
The numbers being tossed around in Zimbabwe's economy these days are truly mind-boggling. Banking and other financial systems are completely unable to process the sums being exchanged for trivial things. Think about it - could 7-11's systems could handle it if your Super Big Gulp cost four billion dollars?
I am way too dumb when it comes to economics to even begin to know what the solution is for this problem. The solution in Weimar Germany was to elect a fascist to the Chancellorship. Zimbabwe already has it's fascist, and that hasn't worked. What's next?