[deMolay]

For an eye opener on the consequences of printing money. http://www.iht.com/articles/2008/10/02/ ... mbabwe.php

[RedStateGreen]

This is where we're headed. Drill, drill, drill and print, print, print.

[Stratovarius]

Link

Absent current official money supply and inflation data, it is difficult to quantify the depth and breadth of the still-growing crisis in Zimbabwe. To overcome this problem, Cato Senior Fellow Steve Hanke has developed the Hanke Hyperinflation Index for Zimbabwe (HHIZ). This new metric is derived from market-based price data and is presented in the accompanying table for the January 2007 to present period. As of 3 October 2008, Zimbabwe’s annual inflation rate was 2 trillion percent.

So how much does a loaf of bread cost? Like 500 billion zimbabwean dollars?

My head exploded trying to grasp 2 trillion % annual inflation.

[3aidlillahi]

If a loaf of bread is 500 billion dollars and inflation's at 2 trillion%/annum, then a year ago, that bread was a mere 25 cents. That is absolutely crazy. Even factoring in increasing inflation, that bread would still be a couple of dollars.

I think we're in this energy crisis because Zimbabwe is burning millions of barrels per day of oil to keep their printing presses running.

At what point do you use the scientific notation for your grocery bills?

A way to wrap your head around this is just doing the math. A 2 trln inflation rate breaks down to 7.75% per DAY. So if something costs you $100 (billion) dollars one day, the next day will end up costing you another $7.75 (billion) dollars. When people know this, they will NEVER hold onto money as they know they will lose massively each day that they wait. This will increase demand, thus pushing prices up even further (although at this point it may be moot). It's also impossible to save for anything, thus further hurting the economy since savings are required for investment.

[Stratovarius]

At what point do you use the scientific notation for your grocery bills?

Hey everyone I just got over 100 billion bucks!...Oh wait, I can only afford 3 eggs.

[Ayoob]

In the Guardian, on 18 July 2008, a report on Zimbabwe's inflation, said that an egg costs ZW$50 billion (GBP 0.17, USD 0.32), and it showed adverts for prizes of Z$100 trillion in a Zimbabwean derby and ZW$1.2 quadrillion ($1,200,000,000,000,000.00: ~GBP 2,100; USD 4,200) in a lottery. It also showed a monthly war pension currently is ZW$109 billion (GBP 0.37, USD 0.74), shops can only cash cheques if the customer writes double the amount, because the cost will go up by the time the cheque has cleared, and people can only withdraw a maximum of ZW$100 billion from cashpoints.[46]

[3aidlillahi]

Oh! The glory days.

If in May '07 there inflation rate was 3700% and it's now 2*10^12%, that's an inflation rate of the inflation rate of 118% per month. That means that in a month, they'll be up to 4.36 trillion percent/year. After a year, they'll be up to 23 quadrillion percent per annum for their inflation rate. That's a 10% inflation rate per day or 0.4% per HOUR. In an hour, those eggs will increase by several trillion dollars a PIECE.

[Loki]

In the Guardian, on 18 July 2008, a report on Zimbabwe's inflation, said that an egg costs ZW$50 billion (GBP 0.17, USD 0.32), and it showed adverts for prizes of Z$100 trillion in a Zimbabwean derby and ZW$1.2 quadrillion ($1,200,000,000,000,000.00: ~GBP 2,100; USD 4,200) in a lottery. It also showed a monthly war pension currently is ZW$109 billion (GBP 0.37, USD 0.74), shops can only cash cheques if the customer writes double the amount, because the cost will go up by the time the cheque has cleared, and people can only withdraw a maximum of ZW$100 billion from cashpoints.[46]

When it gets this bad, why bother using currency at all? I'd have to carry around a computer to do the math. I imagine that the economy for the average Zimbabwean has to include a lot of bartering. How many eggs does a gallon of gas cost?

[Ayoob]

I remember reading something about the abandonment of the Zimdollar. IIRC, there are a couple of shops set up to do business in other currencies.

[Stratovarius]

I remember reading something about the abandonment of the Zimdollar. IIRC, there are a couple of shops set up to do business in other currencies.

Apparently if the shops' prices aren't low enough, the police (if you can call it that) comes to force you to lower it.

[RedStateGreen]

I heard they had to take a bunch of zeros (something like ten) off the dollar's value, the calculators at the stores and offices couldn't handle the load.

[eastbay]

I heard they had to take a bunch of zeros (something like ten) off the dollar's value, the calculators at the stores and offices couldn't handle the load.

They did. It was only a few months ago. And it went straight back down in value... because the government was printing money to pay bills.

Kinda like The West is doing right now.

[PenultimateManStanding]

How sad for the people of that country. Not happy days. Reminds me of that line in the movie Blood Diamond where the black guy says they were better off when the White Man was in charge. Of course you have to go back further in history to know they were better off before the White Man ever arrived. They lived sparsely populated on the highlands. It was an adaptive stance to deal with malaria and disease. Some day in the future, they'll figure it out again and go back to the old ways. Good for them and godspeed. I wish them well.

[IslandCrow]

Need I say anything? The pictures speak for themselves (From BBC)

[perdition79]

I can just picture a typical cellphone call in Zimbabwe:

"I tried to buy a bag of Dorito's from a vending machine here in Harare, and the vending machine guy keeps raising the price on me! I've been pumping in hundreds of thousands of quarters and I'm no closer to having that bag of chips than when I started last November!"

I'm thinking that if that kind of hyperinflation happened here, quarters would become tokens. Soda machines with dollar bill gimmicks could be re-programmed, but strictly coin-op machines would be obsolete. Laundromats would have to charge a cover like a nightclub, then hand you a sack of worthless quarters.

[kam3Oen]

Of course you have to go back further in history to know they were better off before the White Man ever arrived. They lived sparsely populated on the highlands. It was an adaptive stance to deal with malaria and disease. Some day in the future, they'll figure it out again and go back to the old ways. Good for them and godspeed. I wish them well.

Yah, and I'm sure the struggling white man (or asian man) won't come along and recolonize them in the near future. You certainly are an optimist.

[PenultimateManStanding]

Of course you have to go back further in history to know they were better off before the White Man ever arrived. They lived sparsely populated on the highlands. It was an adaptive stance to deal with malaria and disease. Some day in the future, they'll figure it out again and go back to the old ways. Good for them and godspeed. I wish them well.

Yah, and I'm sure the struggling white man (or asian man) won't come along and recolonize them in the near future. You certainly are an optimist.

Well, things are falling apart. They are telling the world right now to not stop sending them aid. The aid is going to stop. We know that. Things are all messed up. folks down there in Africa are going to go back to the old ways. A lot of Africans will die, but they will do OK in the long run.

[3aidlillahi]

In the past 24 since my last post on this subject, an egg has gone from $50 billion dollars to $54 billion dollars. An extra $4 billion dollars in just 24 hours for a single egg.

It's absolutely hysterical from the outside POV. But I'm afraid from the inside of Zimbabwe, we may be seeing the world's first cannibalistic society developing.

heard they had to take a bunch of zeros (something like ten) off the dollar's value, the calculators at the stores and offices couldn't handle the load.

With a 2 trillion percent inflation (and rising!), they'll have to keep doing this every several months. Then every few months. Then every month. Then every week. But by this time, they won't be able to afford the paper to print the notes.

[Stratovarius]

It seems like citizens would just resort to barter? 2 trillion % inflation is absolutely mind-boggling. Ya, let's just introduce a new benchmark every hour, then every minute. The unit of account will be a 1 googol Zimbabwean dollar if they never lopped of zeros.

I want to see paper currency with scientific notation on it.

[Dreamtwister]

In the past 24 since my last post on this subject, an egg has gone from $50 billion dollars to $54 billion dollars. An extra $4 billion dollars in just 24 hours for a single egg.

You know, I went to look up the exchange rate and (big surprise) none of the online places could even attempt to guess.

As near as I can figure, it's about 1:216,000,000,000. But of course, that will be completely meaningless by the time I hit "Submit".

And you know what? It's funny, because people think it can't happen here.