The look of hyperinflation

Life in Zimbabwe: Wait for Useless Money

Excerpt:

Zimbabwe is in the grip of one of the great hyperinflations in world history. The people of this once proud capital have been plunged into a Darwinian struggle to get by. Many have been reduced to peddlers and paupers, hawkers and black-market hustlers, eating just a meal or two a day, their hollowed cheeks a testament to their hunger.

Like countless Zimbabweans, Mrs. Moyo has calculated the price of goods by the number of days she had to spend in line at the bank to withdraw cash to buy them: a day for a bar of soap; another for a bag of salt; and four for a sack of cornmeal.

The withdrawal limit rose on Monday, but with inflation surpassing what independent economists say is an almost unimaginable 40 million percent, she said the value of the new amount would quickly be a pittance, too.

“It’s survival of the fittest,” said Mrs. Moyo, 29, a hair braider who sells the greens she grows in her yard for a dime a bunch. “If you’re not fit, you will starve.”

Economists here and abroad say Zimbabwe’s economic collapse is gaining velocity, radiating instability into the heart of southern Africa. As the bankrupt government prints ever more money, inflation has gone wild, rising from 1,000 percent in 2006 to 12,000 percent in 2007 to a figure so high the government had to lop 10 zeros off the currency in August to keep the nation’s calculators from being overwhelmed. (Had it left the currency alone, $1 would now be worth about 10 trillion Zimbabwean dollars.)

In fact, Zimbabwe’s hyperinflation is probably among the five worst of all time, said Jeffrey D. Sachs, a Columbia University economics professor, along with Germany in the 1920s, Greece and Hungary in the 1940s and Yugoslavia in 1993.

Making matters worse, cash itself has become scarce. Business executives and diplomats say Zimbabwe’s central bank governor, Gideon Gono, desperate for foreign currency to stoke the governing party’s patronage machine, sends runners into the streets with suitcases of the nation’s currency to buy up American dollars and South African rand on the black market — drying up Zimbabwean dollars that would otherwise go to the banks.

Because of the cash shortage, the government strictly limits the amount people can withdraw. Even so, Zimbabweans say they often wait in vain for hours at banks that send their customers away empty-handed.

Comment: I pray I never see this in my beloved homeland! The promises being made without fiscal conservatism scare me!