Thursday, January 17, 2008

$15M Hamburgers

It's been a while since we checked in on the economic blueprint for the United States, Zimbabwe. Today, the AP reports a situation that will turn Helicopter Ben green with envy:
Zimbabweans will be soon lining their pockets with 10-million-dollar bills.
At the current black market exchange rate of $2.5 million (ZD) to $1(USD) the new notes will be worth a whopping $4 (USD), about two-thirds of the price of a hamburger. The new notes will supplement last month's new notes where $750,000 was the highest denomination issued.

As always, soldiers, police, and other uniformed services will have special pay-lines, "because it is not desirable to see them queuing for cash."

Echoing his American colleague Ben Bernanke's remarks on the current "liquidity crunch" faced by US and European banks, Reserve Bank Governor Gideon Gono said, "businesses might be tempted to again raise prices of scarce goods. 'If this happens, the whole objective of solving the cash shortages ... will be defeated,' he said."

Two Fed Chiefs with the same prescription for the same perceived problem. The good news for both of them is that former Senator/bad actor/sleepy candidate Fred Thompson trusts 'em!

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