When I came down in 1984 the Zim $1 was worth R1.17!

Alan

June 2008

Well - you know one! Yes - it's me! We are all multi-billionaires in Zimbabwe - even the poorest paid. It is with much fascination that I came into possession of my first $5 billion note today - so I thought I'd scan it and send it to show you before I spend it tomorrow on a couple of cappuccinos and muffins with a friend I'm meeting! It's called an Agro cheque but is able to be used by anyone. They have been issued to pay farmers for cash crops as the other notes are too small - there are also a few more apparently - a $50 billion and a $500 billion. I imagine I'll get those in the next few weeks! They are rapidly becoming necessary for normal wallets too!

This inflation is incredible - fascinating if you take yourself out of the reality of it and look at it as a case-study! I feel like we are part of a history book in the making. We are in the steep part of the exponential curve graph (for the mathematicians out there…) and we are currently at about 2million percent inflation. That means that prices double roughly every 2,5 days - and they do. Devaluation of the Z$ happens at an alarming rate - feeding the inflation and being fed by it. This $5 b note is worth about UDS 5 today (Wednesday) but at the beginning of this week (yes, Monday) it was worth double that. Next Monday it will be worth half.

In the middle of April this year our biggest note was $10million and that bought a loaf of bread. We went away for a month and on our return found that most items had increased 10-fold (bread $100 mil). If you can even find bread now, it's close to $1 billion - or $350mil for a longish bun thing. They try to have some control over the bread price. Most things have gone way past that. Very few items are below $1 billion now.

I think we now have the largest number of notes a country has ever had. We are trying to collect a specimen of each but I think we've missed a few. Anything under $10 mil gets trampled on if dropped on the street - not worth bending down to pick it up! ATMs and swipe machines cannot contain all the zeros - so paying for anything is a real nightmare at times and getting worse. Some places will take cheques but otherwise it has to be bank transfers. The max cash withdrawal has just today been increased from $5 billion to $10 billion. Whoopee - can now get 10 things at a time in the supermarket, instead of 5.

Oh well - just for your interest!

JULY 2008

…a mere month later and the information above seems like child's play. Anything in the shops for under $100 billion is now "cheap". The "longish-bun thing" (bread I mentioned above), is now $5 billion - if you can get it (and you usually can't). Inflation is now over 10 000 000% ("10 million per cent" for those who are not familiar with big numbers!). Many things more than double daily - often 10x at a jump. 1lt fizzy drinks went from $5 billion on Thursday (controlled price, I think) to $51 billion on Friday!

500ml packet of fresh milk did this:
Last Friday 28th June: $2.4 billion
Monday 30th June: $4 billion
Wednesday 2nd July: $ 10 billion
Friday 4th July: $21 billion (and was the same on Saturday…)

We can now draw $100 billion a day - but everywhere is wanting cash, so that is not enough for anything. Some places still take cheques but if they are smart, they charge anything from 20%-100% extra to compensate for the loss they'll carry over the 4 days the cheque takes to clear. Electronic payment is available again (not everywhere), now that the banks have finally managed to sort the machines out to handle the too-many zeros… some banks still haven't figured it out and so one has to swipe the card through many many times, 9 billion at a time, in order to pay. (Most small shopping trips cost 500 billion - a trillion dollars…so work that out, paying 9 billion at a time.). Standard Chartered has removed six zeros for their purposes - what you pay in "thousands" actually means "billions". They have done that to all their systems - so bank account balances have an invisible 000 000 after the figures shown! i.e. $14 000 means $14 billion not 14 thousand!

A "Trillion dollars" is very common terminology now. 2 or 3 weeks ago I paid $1.4 trillion (plus some USD) for my car to be serviced… Yesterday I saw a MOP (floor mop on a handle) for $1.4 trillion and a yard broom for $1,2 trillion. It shows you how fast things are moving. And those are not fancy 1st-world type mops/brooms - just the good old Africa wooden handle things! I must take my camera and take pictures of some of these things - but it doesn't look quite as amazing as it sounds, as the shops all state their prices is millions or billions i.e. Take off 6 or 9 zeros, respectively.

It's hard to even keep up what this money is really worth, as it changes daily. Tomorrow is a whole new week, but at the end of last week the USD was worth about Z$45billion. So the daily withdrawal of $100 billion is just over USD 2. There is talk of nine zeros being removed by the Reserve bank in August - but we'll wait and see. The German company that has been supplying us paper for printing notes, is no longer going to do so. Hopefully the lack of ability to print money will happen soon and that will curb inflation.

Anyway, these are just numbers!!!!

Attached are the scanned $25 billion and the $50 billion notes for your interest.

 



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