Monday, July 31, 2006

They'll Be Back

Zimbabwe, who has arguably the worst economy in the world with 1,200% inflation, 75% unemployment and sharply falling GDP, have come up with a idea how to solve the problem of too many zeroes on the bills of the Zimbabwean currency: erase 3 zeroes from it.

But with 1,200% inflation, it will only take two to three years before these zeroes will be back. For such a reform to be meaningful, you're gonna have too rein in money supply growth too. Meanwhile, hyperinflation combined with Robert Mugabe's many other insane policies (such as his theft a few years ago of the lands of competent white farmers and the redistribution of that land to his in agriculture incompetent cronies) will continue to destroy what was once one of Africa's strongest economies but who is now one of the biggest failures (and that saying a lot).


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