Hyperinflation can be defined as when the rate of price inflation exceeds 50% per month. If this rate is compounded over a year, prices multiply by a factor about 130 in a year. Here's the monthly inflation rate taking off in in Zimbabwe.
In mid-November 2008, Zimbabwe recorded the world’s second-highest hyperinflation. It got so bad people started using their Zimbabwe dollar as toilet paper . The massive hyperinflation lead to abandoning the currency and using foreign currencies .Thats when Zimbabwean people started using the black market for exchanging their money .
The main cause of hyperinflation is a massive and rapid increase in the amount of money. another cause of Zimbabwe's hyperinflation was the central government's borrowing excessive amounts of money and using inflation to offset the true cost of repaying its debt. So Zimbabwe’s hyperInflation is a result of the monetary authority irresponsibly borrowing money.But the crisis started to get serious in 2000 when the Zimbabwean government effectively destroyed their agricultural industry by displacing farmers from their lands. Zimbabwe’s economy immediately went into recession and inflation began to rise.After we knew all that about the Zimbabwe government we safely can say that Zimbabwe’s government is a dysfunctional government.
True analysis indeed. Mugabe's idiotic policies had a direct impact on productivity in Zimbabwe. He simultaneously displaced farmers and cranked up the printing press to pay for his institutionalized corruption and reckless spending. The result was hyperinflation that screwed an entire nation out of their livelihood. Dude should be in prison for that crap.
ReplyDeleteI've done quite a bit of studying on this because I operate a website where people can buy defunct zimbabwean dollars as collectors items. Thanks.