Inflation Case
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In 2000 after the collapse of the agriculture sector in Zimbabwe, the inflation skyrocketed to 7500 percent, then after a year escalated to 100000 and is now at 11.2 million percent, which currently is the highest in the world. I feel the collapse is to be blamed on the president Robert Mugabe for his land distribution policies which focused on taking land from white farmers and reallocating it to the black population who of the majority lacked the knowledge or means to farm productively.
Modern economies are very complex in nowadays .the actual economy of Zimbabwe is collapsing under this weight of economic negligence. This has resulted in a poverty and unemployment epidemic driven by the shrinking economy and escalating hyperinflation. Zimbabwe once known as the” bread basket “of Africa has now spiraled down from being one of Africas strongest economies to the worlds worst.
The money is literally not worth the paper its printed on, in fact its worth much less.Giesecke and Devrient, the German company that tendered to supply paper for Zimbabwes currency has ceased to delivery to the government after the political situation in the country worsened. Now, Zimbabwes state owned Fidelity Printers and Refiners is facing a severe shortage of paper. In response to the shortage and inflation Zimbabwe turned to printing fewer, but ever higher notes. Last year, 2008, the country had to start printing $50 billion notes that barely covers the cost of a loaf of bread. The note carries equivalence worth of about US$2.At independence in 1980, one Zimbabwe dollar was worth more than US$1. Money should be something of value but in Zimbabwe it is completely useless. Zimbabwe is suffering from shortages of food, fuel and a lot of other important commodities. Prices are doubling on average every 1.3 days even though most of the shops are empty. More and more people are resorting either to crude barter such as a cabbage for an egg, or a few tomatoes for a loaf of bread or to under-the-counter deals in foreign currency. Due to all this, an underground economy has emerged which uses other forms of money such as other currencies, or commodities, or combinations of either
A series of measures aimed at easing the countrys economic crisis were implied by Zimbabwes central bank, such as the introducing of a new currency by striking off three zeros off every banknote to help consumers deal with inflation as well as curb the black market in currency. The removal of zero