Hyperinflation in Zimbabwe 531 Billion Percent

Zimbabwe is the first country in the 21st century to hyperinflate. In February 2007, Zimbabwe’s inflation rate topped 50% per month, the minimum rate required to qualify as a hyperinflation (50% per month is equal to a 12,875% per year). Since then, inflation has soared.
The last official inflation data were released for June and are hopelessly outdated. The Reserve Bank of Zimbabwe has been even less forthcoming with money supply data: the most recent money supply figures are ancient history—January 2008.

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 26 September 2008, Zimbabwe’s annual inflation rate was 531 billion percent.

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Zimbabwe Attempts to Fight Inflation

Zimbabwe's central bank governor says he is knocking 10 zeros off the country's hyper-inflated currency to make 10 billion dollars become one dollar...

Just last week Gono introduced a new 100 billion-dollar note that is not enough to buy a loaf of bread.

Gono said on Aug. 1 the bank will issue a 500-dollar bill equivalent to 5 trillion dollars at the current rate.

read the CNN story

Zimbabwe $100 Billion Banknote

Zimbabwe's troubled central bank introduced $100 billion banknotes Saturday in a desperate bid to ease the recurrent cash shortages plaguing the inflation-ravaged economy.

The bills officially come into circulation Monday, although they were on the foreign currency dealers market Saturday.

As high as they are, though, the bills still aren't enough to buy a loaf of bread. They can buy only four oranges.

The new note is equal to just one U.S. dollar.

Once-prosperous Zimbabwe has seen an unprecedented economic meltdown since it gained independence in 1980, with the official inflation rate now at 2.2 million percent.

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My thoughts: Remember inflation is an increase in the money supply.

Zimbabwe Hyperinflation

It has come to this: Zimbabwe is about to run out of the paper to print money on.

Fidelity Printers & Refiners, the state-owned company that tirelessly churns out bank notes for the Robert Mugabe regime, was thrown into a crisis early this month after a German company stopped supplying bank note paper because of concerns over Zimbabwe's recent violent presidential election, widely seen as fraudulent by international observers.

The printing operation drastically slowed. Two-thirds of the 1,000-strong workforce was ordered to go on leave, and two of the three money-printing shifts were canceled.

The result on the streets was an immediate cash crunch.

"If you think this currency shortage is bad, wait two weeks. By then it will be a disaster," said a senior Fidelity staffer, who spoke to The Times on condition of anonymity because he would face dismissal and possible violence for talking to a Western journalist. The paper will run out in two weeks, he said...

As hyperinflation spiraled last year, Fidelity printed million-dollar notes, then 5-million, 10-million, 25-million, 50-million. This year, it has been forced to print 100-million, 250-million and 500-million notes in rapid succession, all now practically worthless. The highest denomination is now 50 billion Zimbabwean dollars (worth a U.S. dollar on the street).

Despite the recent currency shortage, the Zimbabwean dollar has continued to slide against the U.S. dollar and shopkeepers are still increasing their prices steeply. The price of the state-owned Herald newspaper has leaped from 200,000 Zimbabwean dollars early this month to 25 billion now. Before the crunch, a beer at a bar in Harare, the capital, cost 15 billion Zimbabwean dollars. At 5 p.m. July 4, it cost 100 billion ($4 at the time) in the same bar.

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Hyperinflation and Expiration Dates

Notice the expiration date for the bill.

Hat tip to Carpe Diem

Socialism Still Does Not Work

from the Economist

Zimbabwe Can't Calculate Inflation Rate

Zimbabwe's chief statistician has said it is impossible to work out the country's latest inflation rate because of the lack of goods in shops...

Maize meal, bread, meat, cooking oil, sugar and other basic goods used to measure inflation largely disappeared from shops after Robert Mugabe's government ordered prices to be slashed.

Manufacturers have said they cannot afford to sell goods at below the cost of producing them.

Most basics are intermittently available on the black market at well over the official prices.

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