$10 Billion to $1 in Zimbabwe
To follow up on my recent posting regarding the funding of oppression in Zimbabwe through hyperinflation, Zimbabwean Central Bank Governor Gideon Gono has announced that after issuing $100 billion notes (not yet enough to buy even a loaf of bread), the government is devaluing its currency by dropping 10 zeroes, converting 10 billion dollars into one. AP reports (see here and here) that:
President Robert Mugabe threatened a state of emergency if businesses profiteer from the country’s economic crisis . . . . “Entrepreneurs across the board, don’t drive us further,” Mugagbe warned in a nationally televised address after the currency announcement. “If you drive us even more, we will impose emergency measures. . . . They can be tough rules.”
Of course, this massive currency devaluation will have no effect whatever on the escalating hyperinflation. As AP notes:
Inflation, the highest in the world, is officially running at 2.2 million percent in Zimbabwe, but independent economists say it is closer to 12.5 million percent.
Economist John Robertson said the new bills will soon be worthless, because the inflation rate continues to skyrocket.
Our newest book, Good Money by George Selgin, explains that legalizing private currency is the solution for people to protect themselves from being victimized by central banking monopolies.