As a follow-up to my previous post
, I'll note that the worst possible currency investment -- by a score of orders of magnitude -- is the Zimbabwean dollar
. In July, one U.S. dollar was worth 758,530,000,000 (758 billion) Zimbabwean dollars. On August first, the central bank revalued the currency, making Z$10 billion worth Z$1. In August, 1,780 Zimbabwean dollars were worth one U.S. dollar. Over four weeks in October, the exchange rate went from 2,300,000 to 10,700,000 to 1,220,000,000 to 251,000,000,000. In the middle of November, one U.S. dollar was worth thirteen quadrillion Zimbabwean dollars.
So if you go shopping in Zimbabwe, make sure you do it in the morning because your money will be worth less in the afternoon.
Insofar as Zimbabweans are surviving, they're doing it with the help of friends and relatives outside the country. Zimbabwean expatriots have been sending money to family members for years. On the BBC's Business Daily program a few days ago I heard that Zimbabwean immigrants in South Africa are paying taxi drivers to drive food to their friends in Zimbabwe.
This hyperinflation is due in part to the government's practice of printing money to pay increased salaries to the army and civil servants. It's unlikely that this situation will materially improve until Robert Mugabe
is no longer in charge. And even though there's near-worldwide consensus that it's time for Mugabe to go, that doesn't seem likely until he dies.