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PaperTiger
27th Nov 2007, 22:02
(IMF prediction for Zim: http://news.bbc.co.uk/2/hi/africa/7115651.stm )

I just can't get my head round that kind of number, what would it actually mean in everyday life ? Stuff doubles every day, every hour, every few minutes ? Boggle :confused:

Mad (Flt) Scientist
27th Nov 2007, 22:32
100,000% inflation means prices go up by 1000 times per year.
Assuming compound growth, that's 77% per month (a bit short of doubling) or about 2% per day.
Or, if you prefer doubling, it's just under 10 doublings per year - basically one doubling every five weeks.

Incidentally, during the Weimar Republic's hyperinflation in late 1922, the cost of living increase was roughly equivalent to an annualised inflation rate of 25,000%, about a quarter of the rate in the OP.

pigboat
27th Nov 2007, 22:36
In the good old colony days,
When we lived under the King...:E

Aaaaaaaaaaaaaaaargh!
27th Nov 2007, 22:39
if 100000% inflation means prices go up by 1000 times per year.
doesn't that mean 4% inflation is actually DEFLATION? :confused:

goudie
27th Nov 2007, 22:45
It means using a wheelbarrow to go buy a loaf of bread, assuming there's any bread around.

Aaaaaaaaaaaaaaaargh!
27th Nov 2007, 22:51
Where can you get bread big enough that you'd need a wheelbarrow to carry it? :confused:

JackHowe
27th Nov 2007, 22:58
I think it's worse than that, Mad Flt.
100% inflation would mean doubling every year (or whenever the qualifying period is defined - it could be 100% per week), so adding the extra zeros means 2000 times . . .

I don't know what the figures for Germany were under the PapierMark between the Wars, but there were stories about needing wheelbarrows to carry the currency to buy a loaf of bread (and you were paid every day and spent it immediately as it was worth much less the following day).

http://www.ingrimayne.com/econ/EconomicCatastrophe/HyperInflation.html
MEASURES OF GERMANY HYPERINFLATION
Percentage Change in Various Measures of Inflation
Dates Internal Prices Price of Dollars Cost of Living*
Feb 1920 to May 1921 11 4.6% -37.2% 39.2%
May 1921 to July 1922 634.6% 692.2% 417.9%
July 1922 to June 1923 18094% 22201% 13573%
July 1923 to Nov 20 1923 854,000,000,000% 381,700,000,000% 560,000,000,000%
*food until June 1923, thereafter based on all items.

From the middle of 1922 until the middle of 1923, prices increased by over 100 times. Measured by the price of food, prices were 135 times higher at the end of the period than they were at the beginning. Measured by how many marks it took to buy a dollar, prices were 222 times higher. Yet even this horrid inflation was mild compared to what happened from July to November of 1923, when prices increased by somewhere between a million and a billion times their previous level.
The rapid increase in German inflation can be seen in the postage stamps that were issued during this period. (See the picture below.) In 1920 the highest valued stamp issued was for four marks. In 1923 the denominations were changing so rapidly that the post office could not design new stamps fast enough and resorted to using old dies and then overprinting them with new values. The highest value reached in 1923 was for 50 billion (50,000,000,000) marks. A great many of these stamps must have been issued and bought, though not necessarily used, because very few of the almost 200 varieties of stamps issued from 1921 to 1923 have more than minimal collector's value. Also, stamps that were postally used during the period have a higher collector's value than stamps that were never used, a pattern that is quite unusual.

tony draper
27th Nov 2007, 23:02
In these circumstances people go back to the barter system,but like every other economic system tiz the poor that come off worse,they don't have as much to barter.
All this could have been avoided at the cost of one 9mm round,
:cool:

Parapunter
27th Nov 2007, 23:07
Yes, but then you become the same man as Mugabe, so the cost is in fact far in excess of ome 9mm round. It is that sophistication of thought which makes the difference between you & he.

tony draper
27th Nov 2007, 23:17
So, we would have retained the moral high ground had we sent in the army at great cost, which many here have advocated,probably got many of our young men and Zim civilains killed in the process to be rid of the man and his cohorts that would be fine,? but simply getting someone to shoot the fecker ten years ago would have been wrong??
Never understood that.
:cool:

con-pilot
27th Nov 2007, 23:24
Never understood that.

Neither have I Mr. D, never have.

BlooMoo
27th Nov 2007, 23:39
Zimbabwe's chief statistician has said it is impossible to work out the country's latest inflation rate because of the lack of goods in shops.

"There are too many data gaps," the Central Statistical Office's Moffat Nyoni told state media.

The underlined terms are the key. The datum by which one can approximate the domestic inflation rate of a country is a function of the in/outflow of capital to a foreign entity vs the fair market value of that country's promise to pay for inflow or receive for outflow i.e their currency. The concept of domestic inflation is meaningless unless there is at least one other non-domestic trading partner with which they compete. Zimbabwe is effectively a closed shop it's internal inflation rate is a meaningless statistic but to us shocking because we try and estimate and judge it on our own terms.

Most Governments that peg their currencies (to USD invariably because that is where the global capital market buck stops - ignore EUR please:}) is very popular in various countries as it buys time for those Governments to try and dig their state out of significant economic holes while the few that stay in power live the high life (Argentina 91-02 anyone?) Venezuela now?

To cut a long story short, a significant proportion of the population are both starving and in effect disconnected from the economy of Zimbabwe, debate on Zimbabwean 'inflation' is giving succour to Mugabe as it gives him an excuse to go to the UN (I ask you, if you were starving is the UN really the best bet?) and say he's getting 'inflation' under control - it's a red herring that dictators like him (Chavez in a year or two anyone?) bite on with both hands and feet.
BM:sad:

Dark Knight
27th Nov 2007, 23:44
How many, essentially Black nations, where we have ended colonialisation and given them Independence' have prospered giving their citizens an increased standard of living free of rampant corruption and crime?

I am unable to name One?

DK

Parapunter
27th Nov 2007, 23:54
You could never be certain of that & Iraq is the great example. If you don't understand that then Kissinger & Allende would make good reading for you. And Botswana Mr. Knight.

arcniz
28th Nov 2007, 00:18
Came across this news article recently. It finally explains one thing I could not fathom about the Zim mess -- how the insiders and fat cats manage to surf along on top of the economic situation they have created:

http://www.timesonline.co.uk/tol/news/world/africa/article2010041.ece


.

BlooMoo
28th Nov 2007, 00:56
How many, essentially Black nations, where we have ended colonialisation and given them Independence' have prospered giving their citizens an increased standard of living free of rampant corruption and crime?
Ghana was one of the first.

Of course, despite being an independent nation for half a century their current problems (http://www.worldwrite.org.uk/ghana/ghanaindependence.htm) are of course our fault.

Err, No. Independence = on your own.

i.e NOP - 'Not Our Problem'

Same goes elsewhere. When we hear legitimate complaints - eg still waiting to hear from Hong Kong, USA, Canada, Australia, New Zealand, India, Kenya, etc, etc then we'll maybe listen, hmmm... but there will be a strictly 1st come 1st serve queueing system approach and Her Maj is a bit busy just now.

Therefore, sorry. Please get in line.:}

PS Any dictators from South America concerned about default risk on their 'sovereign' bonds then please see here (http://www.mae.es/es/home) or here (http://www.portugal.gov.pt/Portal/PT/)- same goes for Philippines or gamblers on day trips to Macau.

i.e. NOPE - 'Not Our Problem Either'

Getting the picture?:}:}

Mad (Flt) Scientist
28th Nov 2007, 01:18
@JackHowe
I think it's worse than that, Mad Flt.
100% inflation would mean doubling every year (or whenever the qualifying period is defined - it could be 100% per week), so adding the extra zeros means 2000 times . . .

Nope. I was being careless in my wording, 100,000% inflation means the increase is 1000 times the base, so the end price is 1001 (1000+1) times the start. Just as 100% means the increase is 100% of the base i.e. 1 times the base, so the end price is 1+1=2 times the base.

I confess I couldn't find any 1923 inflation numbers for the Weimar Republic, which is why I used the 1922 ones. Those 1923 numbers certainly make more sense in the context of the standard image of German hyperinflation.

Though even taking the largest value:
July 1923 to Nov 20 1923 854,000,000,000%
an increase in prices of 8,540,000,000 times the base (oh, ok, 8,539,999,999 times the base) is only doubling 33 times, in a period of some 160 days or so - once every 5 days. STILL not as bad as the OP speculated.

Sunray Minor
28th Nov 2007, 10:42
Dark Knight,

Perhaps it would be worth doing a bit of research in to the topic rather than resorting to such sweeping generalisations. It may also be worth considering just who prospered under colonialism in much of Africa and who was excluded, before assuming that Africans were better off under colonial rule. No less that when power that was withheld from the majority is suddenly made available, it is unsurprising that there will be a fight for control - hence much of Africa's situation today.

ZH875
28th Nov 2007, 10:54
doesn't that mean 4% inflation is actually DEFLATION? :confused:


Only if Gordon Brown is the Chancellor. :p

brain fade
28th Nov 2007, 12:26
Ian Smith saw it coming........

'You'll have one man one vote.......once'

'You'll have democracy.........once'

The guy was right.

btw, to answer someone elses q. You don't need the wheelbarrow for the bread, you need it for the money.

Argonautical
28th Nov 2007, 13:24
Dark knight :-

I reckon Botswana has prospered since it gained independence.

tony draper
28th Nov 2007, 14:41
You just watch,the same thing will happen to Scotland.:E

Track Coastal
28th Nov 2007, 15:12
A German woman feeding currency into a stove (circa 1922-1924) because the wads of paper burn longer than the firewood it buys....

http://upload.wikimedia.org/wikipedia/commons/thumb/c/ca/Inflation-1923.jpg/250px-Inflation-1923.jpg

disconnected
27th May 2008, 01:13
Now South Africa goes the same way.

In 5 years they'll be saying "Things were better under apartheid" but still blaming their problems on everyone but themselves.

selfloadingcargo
27th May 2008, 09:49
dunno if it's apocryphal, but heard that players at a Zim golf club ordered their drinks before they set out on the round as the price would have gone up by the time they finished.....