[Teclo]

Good news from Zimbabwe. They can't afford to buy diesel or get their trains repaired.. so they have brought back the coal fired steam trains replaced about ten years ago. Apart from tourism/industrial shunting they are the only country in the world actually using them on freight/passanger main lines (China/India have nearly finished with steam as well, but China still has factories making spares)

Zimbabwe is certainly the only country expanding its use of steam, 10 engines to be working by next year, maybe 50 more in storage. They have the world's last steam shed for repairs and maintenance. Unlikely as it seems maybe this could help solve Africa's transport problem, coal is plentiful and new steam trains could be made cheaply in China. Apparently other African nations are interested in this
I gleaned this off the net, kind of romantic I thought

[MrBill]

I think I read that the only ones who know how to run the steam engines and keep them repaired have since left Zimbabwe due let's say their affirmative action hiring practices? Also China, who no longer see a need to support Mugabe's antics anymore have stopped giving aid to Zimbabwe. Without aid they cannot afford to import either fuel or steam engines. Why would China pay Zimbabwe to buy trains from them? The details are never as romantic. Sorry.

[Teclo]

I think I read that the only ones who know how to run the steam engines and keep them repaired have since left Zimbabwe due let's say their affirmative action hiring practices? Also China, who no longer see a need to support Mugabe's antics anymore have stopped giving aid to Zimbabwe. Without aid they cannot afford to import either fuel or steam engines. Why would China pay Zimbabwe to buy trains from them? The details are never as romantic. Sorry.

I doubt it, the locals know how to keep them running, they are skilled bodgers in Africa, fix anything. Maybe the China thing is factual but they still have 10 steam engines they can fix themselves and lots of coal resources. I found a trip report from the end of September saying 3 steam trains were seen operational, and that the bank of zimbabwe had just transferred $60 billion, probably about the cost of an SUV to fix up 10 more. Maybe there's too much Zimbabwe propaganda.

[Teclo]

Here's the link, you need to scroll right to the end link
"The Reserve Bank of Zimbabwe has so far disbursed $ 58,9billion to the NRZ to finance its turnaround programme meant to revamp the state-owned rail tranporter...The NRZ wanted to overhaul 7 locomotives for the mainline and 5 for shunting by the end of the year, refurbish 10 steam locos for shunting, upgrade and repair tracks and refurbish wagons to improve efficiency"

This is Zimbabwe dollars, how much in US dollars How this plays out politically not sure.. maybe they make money of the railways and want to keep revenue stream going???
Maybe this is critical in someway, more than the road network but thats beyond what I know about Zimbabwe

[eastbay]

The kabuki theater continues...

Zimbabwe devalues currency, dropping 10 zeros
The Associated Press
Published: July 30, 2008

HARARE, Zimbabwe: Zimbabwe will drop 10 zeros from its hyper-inflated currency — turning 10 billion dollars into one — the country's reserve bank said Wednesday. President Robert Mugabe threatened a state of emergency if businesses profiteer from the country's economic and political unraveling.

Shop shelves are empty and there are chronic shortages of everything including medication, food, fuel, power and water. Eighty percent of the work force is unemployed and many who do have jobs don't earn enough to pay for bus fare.

One third of Zimbabweans have become economic and political refugees. Another third is dependent on foreign food aid. But Mugabe barred non-governmental organizations from handing out food last month, claiming they were supporting the opposition.

On Wednesday, central bank governor Gideon Gono announced he was dropping 10 zeros from the currency, effective Friday. That comes a week after he introduced a 100 billion-dollar note which was not enough to buy a loaf of bread.
...

IHT

Smart move. Inevitable. Much easier to do the math. Now they can run it up again. Drop 10 more zero's in a few months. If I ran that dump I'd do the same.

[Starvid]

Oh no, all those poor Zimbabweans who used to be billionaires!

[Twilight]

It would not be a bad idea if it came with fundamental change, as in Turkey.

[FoxV]

I think they should just stop printing money all together and save the paper, ink and energy.

after all if you have a handful of Zimbabwean dollars or a handful of pocket lint, its pretty much the same thing.

Actually the pocket lint is better. At least it'll be worth the same tomorrow. The Zimbabwean dollar on the other hand will be worth about 1% what the pocket lint is worth

[emersonbiggins]

The announcement to begin minting coins, though, is surprising, considering the costs of metal alloys surely exceeds (or, rather, WILL exceed) the face value of the coins in no time.

[vaseline2008]

Then if a Zimbabwean had $1Trillion in their account, would it drop down to $1,000?

[eastbay]

The announcement to begin minting coins, though, is surprising, considering the costs of metal alloys surely exceeds (or, rather, WILL exceed) the face value of the coins in no time.

That won't last. It can't. Impossible.

[FoxV]

certainly impossible under the current policies (which is to produce huge amounts of currency with 0 GDP) but if they're foolish enough to try it, it would mark a great leap forward for the average Zimbabwean.

Once any coin depreciates down to its melt value (which should only take an hour or two at their inflation rate) then the person will still have the metal as something to exchange with (certainly better than paper bills or pocket lint).

It would be a disaster for the government as the underground economy would then become better functioning than the real economy. But then that would be a good thing as the government is a disaster anyways.

[chrispi]

Coming soon to Yankoslavia...

[EnergyUnlimited]

Zimbabwe drops 10 zeros from its currency

Bad news.

Until now Zimbabweans had an opportunity to learn some maths at least.

You know, all these trillions, quadrillions, quintillions... and later decillions... heptadecillions... centillions of Zimbabwean dollars.

And what about 5 X 10 E90 dollars in your pocket?

And how much money do you have in total if you are holding 3 notes,
2 X 10 E122 dollars each and 1 note 5 X 10 E123 dollars?

How much money would you owe after 1 year, if you taken a loan of 5 X 10 E90 dollars with interest rate 2 X 10 E26 % per day?
And how much would you owe if that interest rate was per hour?

Poor Zimbabweans, they are going to be left in dark and not learn all this math.

[idiom]

They could go straight to a commodity currency. Maybe leaves. Then everyone would be rich. Then they could burn down all the forests to stop inflation dead.

But if they just go to a commodity currency for a while it would help. Its easier than barter which is what they must be in now. Plus everyone with a tin roof gets rich.

[steam_cannon]

The announcement to begin minting coins, though, is surprising,
considering the costs of metal alloys surely exceeds (or, rather,
WILL exceed) the face value of the coins in no time.

A couple possibilities come to mind:

* This might stabilize the currency in no time if they combined this with a
responsible system of taxation. LOL

* Or maybe only the government leaders and other corrupt interest holders
will have access to the new coins. So mostly just those people will get
that store of wealth but the average Joe will only get an insignificant
or negative benefit.

Inflation, the highest in the world, is officially running at 2.2 million
percent in Zimbabwe but independent economists say it is closer to
12.5 million percent.

Economist John Robertson said the new bills would 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.

That's so screwed up it's hard to imagine!

[FoxV]

Economist John Robertson said the new bills would 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.

That's so screwed up it's hard to imagine!

its also pathetic math. 2.2Million percent inflation is impossible to imagine and simply means the currency is useless

2.2M% inflation means that something costs Z$1 at the beginning of the year is worth Z$22 000 at the end of the year or:
$Z1833 in a month
$Z60 in a day
$Z2.50 in an hour

now at 12.5M% thats Z$14 in an hour

Again they should just give up as I'm sure nobody actually uses the currency other that for taking funny photos for western media


(courtesy of itulip)

[FoxV]

oops, sorry, my bad. I assumed linear growth and not exponential growth.
so at 2.2M% inflation in a year works out to around 0.114%/hour
or
Z$1 = Z$1.028 in one day
Z$1 = Z$2.33 in one month

For 12.5M% inflation that works out to 0.134%/hour
or
Z$1 = Z$1.033 in one day
Z$1 = Z$2.71 in one month

To be honest I'm very surprised that it works out to be as slow growing as it is. And that they are actually a long ways away from the whole "Getting paid three times a day with the wifes running to the store each time to buy things" like they did at the height of the Wiemar years

[Daphne64]

oops, sorry, my bad. I assumed linear growth and not exponential growth.
so at 2.2M% inflation in a year works out to around 0.114%/hour
or
Z$1 = Z$1.028 in one day
Z$1 = Z$2.33 in one month

For 12.5M% inflation that works out to 0.134%/hour
or
Z$1 = Z$1.033 in one day
Z$1 = Z$2.71 in one month

I think it's been over a year since the inflation was just 133% for a month. As you showed, that doesn't look horrendous on a day-to-day basis.

If we take the quote that something that cost 1 unit at the beginning of a month, costs 20 units one month later, that's 1900% monthly effective interest, which is often just multiplied by 12 to get a nominal rate 23,900% (1 dollar goes to 240 dollars, subtract one and multiply by 100, I think??).

Compounding it gives an effective rate of 4 x 10^17 %

[heroineworshipper]

Maybe we'll need to drop 10 zeros from housing prices in a few more bailout cycles.