Saturday, June 30, 2007

Life With Hyperinflation

I popped out for a Z$25,000 loaf of bread last Friday. It had gone up to Z$30,000 dollars. I ran home for the extra, ran back to the shop - and the price of my loaf had risen to Z$44,000.

Those are the words of Moses Moyo, a pseudonym for a journalist in Zimbabwe who details life with Mugabe. He details a horrific economy where the government is forcing businesses to liquidate their stocks at less than half their value.

An order went out to all manufacturers, wholesalers and retailers to slash their prices by half. Any who showed the slightest reluctance to do so were visited by the Green Bombers - young graduates from the Zanu-PF terror camps whose economic arguments are enforced with a smack on the head with a stout stick.

Those shops that obeyed the edict and reduced their prices were invaded by fervent shoppers, and the result was chaos, with many businesses threatening to close their doors for the rest of the week at least, if not for good.

And the end result? Where it worked best, where prices were cut by a genuine 50 per cent, the government succeeded in reducing the cost of living to almost exactly what it was 10 days ago.

If you think that can't happen where you live, you are sorely mistaken. As part of my new Squidoo habit, I'm working through the causes and problems of inflation under fiat currency schemes. There's more to come on a simple, effortless, and, best of all, non-government solution to this government-made problem.


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