In Zimbabwe, inflation is measured by the hour, not month-over-month as in America and the rest of the developed world.
A single cigarette now costs z$500,000 – but who knows what it will sell for a couple of hours from now. And many bill denominations are literally not worth the paper they are printed on. Single-ply squares of toilet paper are often worth more. Old bills blow through the street like trash, not worth the time or effort to pick them up.
The basic reason the inflation rate has zoomed out of control is quite simple.
You Can’t Print Your Way To Prosperity.
Zimbabwean President Robert Mugabe is, in his own words, a “Hitler of the time.” Mugabe said in a 2003 speech at the state funeral of one of his cabinet ministers:
“This Hitler has only one objective: justice for his own people, sovereignty for his people, recognition of the independence of his people and their right to their resources. If that is Hitler, then let me be a Hitler tenfold.”
When Robert Mugabe took over as president from former Prime Minister Ian Smith, the country was one of the most prosperous in all Africa. The Rhodesian dollar, for example, had a value even exceeding the U.S. dollar.
Then Mugabe embarked on his program of confiscating white-owned farms, in the name of land redistribution.
Zimbabwe, which was once the breadbasket of Africa, saw farm production dry up and wither away as the new untrained black land owners failed to produce crops.
Next, Mugabe began to confiscate white-owned businesses, with similarly disastrous results.
The result was massive unemployment and skyrocketing national debt levels.
To deal with his economic problems, Mugabe decided to crank up the printing presses and create the money needed to pay the bills. As his economy collapsed, the massive money-printing scheme only helped to speed the descent.
When you print money by the boat load, then drop it by helicopters into the economy, there can only be one probable result-hyperinflation. All existing money in circulation rapidly became worthless.
People’s life savings were destroyed, the cost of bananas and toothpaste soared into the thousands, and businesses could no longer function.
Zimbabwe, once the crown jewel of Africa, became a basket case.
If you would like to read more about Mugabe, check out http://www.africancrisis.org or http://www.statenews.com